Adolf Tscheppe-Weidenbach, the son of Baron von Tscheppe-Weidenbach from Baden, Germany, and Emma Willoughby, was born in 1892. After attending the University of Heidelberg, Willoughby moved to the United States in 1910 and became known as Charles Willoughby.
Willoughby joined the United States Army and served with Company K, 5th U.S. Infantry, and eventually reached the rank of sergeant. He was commissioned a major in May 1914 in the Officers Volunteer Corps. During the First World War Willoughby served on the Western Front.
In October 1919 Captain Willoughby was reassigned to the 24th Infantry serving at Columbus, New Mexico.
His next assignment took him overseas to San Juan, Puerto Rico, where again he served as both company and battalion commander in the 65th Infantry from February 1921 to May 1923. He now joined the Military Intelligence Division, as served as Military Attaché duties in Venezuela, Colombia and Ecuador.
In August, 1929, Willoughby started a course at the Command and General Staff School at Fort Leavenworth, Kansas. After graduating two years later, he stayed on at the school as an instructor, teaching the subjects of Intelligence and Military History. He also edited the Command and General Staff School Quarterly.
In 1936 he was appointed as an instructor in the Infantry School at Fort Benning. Later he was promoted to the rank of lieutenant colonel. He developed extreme right-wing views and once delivered a speech to Spanish dictator Generalissimo Francisco Franco at a lunch in Madrid. He also praised Benito Mussolini: "Historical judgment, freed from the emotional haze of the moment, will credit Mussolini with wiping out a memory of defeat by re-establishing the traditional military supremacy of the white race."
Willoughby became logistics officer in the Headquarters of the Philippine Department in Manila where he served under General Douglas MacArthur. Promoted to the rank of major general, Willoughby served as General MacArthur's Chief of Intelligence in the General Headquarters, Southwest Pacific Area (1941-1951).
The Japanese Air Force attacked the US Pacific Fleet at Pearl Harbor on the 7th December 1941. The following day they carried out air strikes on the Philippines and destroyed half of MacArthur's air force. MacArthur was much criticized for this as he had been told to move his airforce after the raid on Hawaii the previous day.
The Japanese Army also invaded the Philippines and they soon held the three air bases in northern Luzon. On 22nd December the 14th Army landed at Lingayen Gulf and quickly gained control of Manila from the inexperienced Filipino troops. Although only 57,000 Japanese soldiers were landed on Luzon it had little difficulty capturing the island.
General Douglas MacArthur now ordered a general retreat to the Bataan peninsula. A series of Japanese assaults forced the US defensive lines back and on 22nd February, 1942, MacArthur was ordered to leave Bataan and go to Australia. General Jonathan Wainright remained behind with 11,000 soldiers and managed to hold out until the beginning of May.
In December 1942 Willoughby was with General Robert Eichelberger in the capture of Buna Village in the Buna-Gona campaign. He was awarded the Army's second highest decoration for gallantry, the Distinguished Service Cross, for "extraordinary heroism in action".
Willoughby accompanied Douglas MacArthur to Tokyo for the occupation of Japan. When attempts to suppress news to the United States ended in failure, he labeled reporters who defied him, as "Communists". A Cold War warrior he was a strong supporter of the activities of Joseph McCarthy. He also lobbied the US Congress to authorize $100 million for General Franco's government in Spain. MacArthur once described the six-foot, three-inch, Willoughby as "my little Fascist".
In 1951 Willoughby went before the House of Un-American Activities and provided information about the Richard Sorge spy network. This included information that claimed that Agnes Smedley was a "communist subversive". In retirement Willoughby was a member of the International Committee for the Defense of Christian Culture. During the 1050s he worked closely with Billy James Hargis, Haroldson L. Hunt, John Rousselot and other right-wing figures. Willoughby was also a board member of Young Americans for Freedom, an organization created by Larrie Schmidt.
Two days after the assassination of John F. Kennedy a long-distance telephone operator in Mexico City monitored an international phone call. She heard one of the voices saying: "The Castro plan is being carried out. Bobby is next." The telephone numbers were traced. One number belonged to Emilio Nunez Portuondo, the Latin American Affairs editor of Willoughby's Foreign Intelligence Digest.
In 1968 Willoughby moved with his wife to Naples, Florida. Charles Willoughby died on 25th October, 1972.
A White House memorandum prepared for JFK in mid-August 1963 estimated that the radical right spent as much as $25 million annually, supported by about 70 foundations, 113 corporations, 25 utility companies, and 250 identifiable individuals.
In the thick of it all, and much more, was Charles Willoughby. While his mentor, General MacArthur, passed into quiet retirement and was occasionally sought by Kennedy for advice, Willoughby approached his seventieth birthday with samurai swords placed strategically next to his desk. Willoughby's holy war against the "Red Menace" found him sitting on the boards of most of the major conservative groups, and reaching into Europe and Latin America to start his own International Committee for the Defense of Christian Culture...
Willoughby's publisher and friend Billy James Hargis was a short, portly, double-chinned fellow in his midthirties who gained much of his financial support from H. L. Hunt and other wealthy oilmen. Along with Willoughby, who was his Washington eyes and ears, another of Hargis's advisory committee members was retired lieutenant general Pedro del Valle, US Marine commander in the Pacific Theater during World War II. After the Korean War, del Valle had become vice president of ITT's Latin American operations.
In September 1961 Hargis announced that a secret fraternity to coordinate right-wing activities would soon be formed. Then, on March 21,1962, a carefully selected group was called together in Washington. No press representatives were allowed at the founding session of the Anti-Communist Liaison, which brought together about one hundred delegates representing some seventy-five right-wing groups at the Washington Hotel. Named as its chairman and operating head was Edward Hunter, a National Advisory Board member of Young Americans for Freedom.
The new group's insider was US representative John Rousselot, a John Birch Society spokesman and Christian Crusade board member from Los Angeles. It also had a Southern California "outsider," Colonel William P. Gale, yet another ex-MacArthur man. In 1962, as California state chairman of the Constitution Party, Colonel Gale announced his candidacy for the governorship on a platform calling for the abolition of all income taxes. He also organized, soon after the pivotal springtime meeting in Washington, a paramilitary outfit.
Willoughby believed implicitly in the solidarity of the military caste. Before the war many American professional soldiers had had links with their Japanese counterparts within the ruling oligarchy. During the war, despite being enemies, in a curious way they were bound even closer, as Willoughby put it, by "years of intimate combat association." Now in the aftermath of war Willoughby and many like him were finding that in important respects they had more in common with the remains of the Japanese military hierarchy than with the American civilians in Tokyo... The militarist spirit was kept alight in small cells spread throughout the body of the nation. As for the one man with the power to control Willoughby and his Japanese henchmen, it is not clear whether MacArthur ever knew what was happening.
In Europe, the OSS at times worked closely with other intelligence services, but competition and rivalry were intense. One of the fiercest turf battles over the tracking of Nazi loot went on inside the U.S. Government, waged between Secretary of the Treasury Henry Morgenthau and Allen Dulles, the OSS chief in Switzerland, a romantic who had a much more cavalier attitude about such things. Axis loot was being moved under the noses of the Allies into neutral safe havens. In one instance, American agents in Switzerland watched 280 trucks of Nazi gold move from Germany across France and Spain to the safe haven of neutral Portugal. Owned by private Swiss firms, the trucks were painted with the Swiss cross, allowing the gold to be moved under `neutral' cover.
However, while the gathering of intelligence on war loot may have been disjointed, ultimately all such reports were passed up to the office of the Secretary of War, Henry L. Stimson. He had a special interest in the subject of looted bullion, and kept a group of financial experts thinking hard about it. Three of these men were Stimson's special assistants John J. McCloy, Robert Lovett, and consultant Robert B. Anderson.
The problem of how to deal with plundered treasure, and what to do with Axis gold after the war, was discussed in July 1944 when forty-four nations met at the resort of Bretton Woods, New Hampshire, to plan the post-war economy. These discussions, some of them extremely secret, revealed the flaws and loopholes that existed in the international financial system, making any clear-cut resolution unlikely. Among the delegates, trust was far from universal. Many of them believed that the Bank of International Settlements was secretly laundering Nazi loot. That distrust set the tone. Among other things, the Bretton Woods agreement (as it was made public) set a fixed price for gold of $35 an ounce, and banned the importation of gold to America for personal use. Neutral countries that signed the pact promised not to knowingly accept stolen gold and other looted assets, but Portugal forgot to include Macao in the list of its dependent territories. This was a convenient oversight, for during the rest of the war, as we saw in Chapter Four, Macao became a world center for trade in illicit gold and was heavily exploited by Japan.
Unlike Europe where the OSS was tolerated by General Dwight Eisenhower, in the Southwest Pacific General MacArthur resisted all attempts by the OSS to get a foothold in his territory. MacArthur and his staff intended to conduct their own brand of special operations from their headquarters in Australia, without any interference.
Intelligence-gathering in MacArthur's domain was under the command of Charles Willoughby. Born in Heidelberg, Germany, in 1892, he was the love child of Baron T Scheppe-Weidenbach and Emma Willoughby of Baltimore, Maryland. By 1910 her romance with the baron had soured and Emma returned to the United States with her 18-year-old son, who immediately enlisted as a private in the U.S. Army, rising gradually to sergeant. When he returned to civilian life in 1913, Willoughby enrolled at Gettysburg College where he was able to get a degree quickly. Re-joining the army as an officer, he served in France in 1917-1918, then taught machine gun tactics at Ft. Benning. The next few years he served as an army attaché at U.S. embassies in Venezuela, Colombia and Ecuador, speaking Spanish with a heavy German accent. In 1940, after staff school at Ft. Leavenworth, he was sent to Manila to be MacArthur's assistant chief of staff for logistics. At the time, Douglas MacArthur was America's field marshal of the Philippine Army. Willoughby, who craved grandeur and authority, was awed by the patrician MacArthur. In mid-1941, when MacArthur became commander of the new U.S. Far Eastern Command, Willoughby stuck with his idol. This impressed MacArthur, who valued personal loyalty above all other qualities, and he made Willoughby his assistant chief of staff for intelligence, promoting him to colonel. When Japan attacked, Willoughby moved to Corregidor with MacArthur, and then accompanied him to Australia.
MacArthur wanted absolute control of intelligence-gathering and special operations in his zone of command. Willoughby's qualifications for such work have been seriously questioned. Repeatedly, he blundered in battlefield estimates, but was kept on because MacArthur liked to surround himself with admirers. According to military historian Kenneth Campbell, Willoughby was often given assignments "for which he was not remotely prepared", and his "attempts to conceal his mistakes are a violation of honor...". For Willoughby, truth was flexible.
In Australia, Willoughby set up the Allied Intelligence Bureau to run guerrilla operations in the Philippines. He also started the Allied Translator and Interpreter Section (ATIS), to monitor Japanese radio broadcasts, interrogate prisoners, and translate captured Japanese documents. Most men in ATIS were Nisei, second generation Japanese born in foreign countries, in this case born in America of Japanese parents. However, Willoughby's approach to guerrilla warfare proved to be too cautious for MacArthur, who craved audacity. Leaving Willoughby in charge of intelligence gathering, MacArthur gave special operations to his intimate friend and personal attorney Courtney A. Whitney. Willoughby was furious, but MacArthur soothed him by promoting him to general.
In this way, MacArthur's intimate crony Courtney Whitney became the key man running secret agents in the islands and reading reports of war loot, including those from John Ballinger. The OSS had no part whatever in this. Whitney was effective in special operations because he was well connected in Manila, a clever rich man on first name basis with all the politically powerful families in the Philippines. In the late 1920s when he had been fresh out of law school in Washington, D.C., MacArthur had got Whitney a job with the top Manila law firm of Dewitt, Perkins & Enrile, who handled MacArthur's financial affairs in the islands, and also handled Benguet, the biggest gold mining operation in the islands, in which MacArthur had investments. By Pearl Harbor, Whitney was intimately involved in all manner of political, legal, and financial intrigues, as played in the islands. He could call in favors from men like Santa Romana.