The Dark Side of Rev. Sun Myung Moon
Part 9, Uruguayan Money-Laundry
By Samuel Blixen
August 19, 1998
Rev. Sun Myung Moon, who has invested heavily in media and
politics in both North and South America, has built what appears to be a
major money-laundering center in the secretive banking haven of Uruguay.
Moon, the founder of The Washington Times and a major conservative
funder in the United States, allegedly has used religious followers to transport
money clandestinely to Uruguay and deposit amounts adding up to the tens
of millions of dollars, and possibly much more.
Uruguay's bank secrecy laws and Moon's political clout have
spared his operations from significant legal action. But the money laundry
has drawn periodic attention from government and other investigators in
In 1996, for instance, the Uruguayan bank employees union
blew the whistle on one scheme in which some 4,200 female Japanese followers
of Moon allegedly walk into the Moon-controlled Banco de Credito in Montevideo
and deposited as much as $25,000 each.
The money from the women went into the account of an anonymous
association called Cami II, which was controlled by Moon's Unification Church.
In one day, Cami II received $19 million and, by the time the parade of
women ended, the total had swelled to about $80 million.
It was not clear, however, where the money originated and
whether it came from illicit sources. Nor was it known how many other times
Moon's organization has used this tactic -- sometimes known as "smurfing"
-- to transfer untraceable cash into Uruguay. Authorities did not push the
money-laundering investigation, apparently out of deference to Moon's political
influence and fear of disrupting Uruguay's banking industry.
Still, a powerful Roman Catholic group and some investigative
journalists have kept up pressure on the financial irregularities at Moon's
bank. Sometimes, the scrutiny has led Moon's organization to complain about
religious persecution. Other times, the critics have found their work a
In January 1997, only two months after the money-laundering
flap, Pablo Alfano, a reporter for El Observador who had been investigating
Moon's operations, was kidnapped by two unidentified men. The men claimed
not to belong to Moon's Unification Church, but threatened Alfano at gunpoint
unless he revealed his sources on Moon's operations.
One gunman shoved a revolver into Alfano's mouth and warned
"this is no joke." After holding Alfano for 30 minutes, the gunmen
returned the reporter to his house, with a warning that they knew his movements
and those of his family. Despite the threats, the reporter said he refused
to disclose his sources. But the message was clear: he should drop his investigation.
[See FBIS, Jan. 30, 1997.]
Other critics have cited Moon's heavy-handed tactics elsewhere
in Uruguay. "The first thing we ought to do is clarify to the people
[of Uruguay] that Moon's sect is a type of modern pirate that came to the
country to perform obscure money operations, such as money-laundering,"
said Jorge Zabalza, a leader of the Movimiento de Participacion Popular,
part of Montevideo's ruling left-of-center political coalition. "This
sect is a kind of religious mob that is trying to get public support to
pursue its business."
But Moon has his defenders in Uruguay, as he does in the
United States. Many Uruguayans welcome his investments, the jobs they produce,
and his charitable social programs. Moon has called Uruguay his South American
"oasis" and has invested an estimated $200 million in the country,
with more promised in the future.
The Cocaine Coup
Tucked between Brazil and Argentina, tiny Uruguay has modeled itself
as a South American Switzerland, granting tight secrecy to its banking institutions.
With its banks and free trade zones, Uruguay hopes to become the financial
capital of Mercosur, South America's free trade agreement. Even critics,
such as Zabalza, note that Moon's investments have produced needed employment.
Moon first put down roots in Uruguay during the 12-year reign
of right-wing military dictators who seized power in 1973. During the 1970s,
the anti-communist South Korean religious figure also cultivated close relations
with military dictators in Argentina, Paraguay and Chile. Moon reportedly
ingratiated himself to the juntas by assisting the military regimes arrange
arms purchases and by funnelling money to allied right-wing organizations.
Even in those early years, government investigators recognized
that one key to Moon's success was the surreptitious use of his followers
to smuggle money across borders. A 1978 U.S. congressional investigative
report found that Moon's followers had transported large sums of cash into
the United States in violation of U.S. currency statutes.
Then, in 1980, Moon expanded his South American influence
into the landlocked nation of Bolivia. There, ultra-conservative army officers
-- backed by drug lords, Argentine intelligence agents and former Nazi commander
Klaus Barbie -- staged a bloody putsch which turned Bolivia into the continent's
first modern narco-state. The putsch became known as the Cocaine Coup.
Soon after the Bolivian generals took power, Moon dispatched
some of his top lieutenants, including his right-hand man Bo Hi Pak, to
coordinate with the new rulers in La Paz. Moon's church was so proud of
its new contacts that it published a photo of Pak meeting with Gen. Garcia
Meza, a coup leader.
After the visit to the mountainous capital, Pak declared,
"I have erected a throne for Father Moon in the world's highest city."
Moon's political arm, CAUSA, began joint political-military operations with
the Bolivian junta.
A month after the coup, Garcia Meza participated in the Fourth
Congress of the Confederacion Anticomunista Latinoamericano [CAL], an arm
of the World Anti-Communist League, which Moon and other Asian anti-communists
founded in the 1960s. Attending that Fourth Congress was WACL president
Woo Jae Sung, a leading Moon disciple. [See Martin Andersen's Secret Dossier,
a book about the Argentine dirty war.]
During its violent two-year run, Bolivia's Cocaine Coup government
protected cocaine production inside Bolivia and allowed cocaine shipments
to processing centers in Colombia. The emerging Medellin cartel thus gained
a secure source of cocaine while introducing modern corporate organization
to the industry and transporting vast quantities of cocaine to the United
But the Bolivian junta suffered from widespread corruption
and incompetence -- as well as international condemnation -- leading to
its collapse in 1982. After their ouster, some coup leaders were charged
with narcotics trafficking in the United States, while Klaus Barbie was
extradited to France to stand trial on war-crime charges for his work in
Adolf Hitler's Gestapo.
Later Bolivian investigations would assert that a Moon representative
had invested $4 million in preparations for the Cocaine Coup. [For details
on Moon and Bolivia, see The Consortium, Oct. 13, 1997; Cocaine Politics
by Peter Dale Scott and Jonathan Marshall; and The Big White Lie by former
Drug Enforcement Agency official Michael Levine.]
A Big Investment
In the early 1980s, Moon's organization was flush with cash elsewhere,
too. In 1982, Moon launched The Washington Times, a right-wing daily which
has cost Moon an estimated $100 million a year in losses. But the newspaper
gave Moon's backers access to the highest levels of the Reagan-Bush administrations
and the ability to influence public debate. President Reagan hailed the
new publication -- one of only two Washington-based dailies -- as his "favorite"
In 1983, back in Uruguay, Moon expanded his South American
holdings by purchasing Banco de Credito, one of Montevideo's leading banks.
The price tag was $52 million. Uruguay's military authorities awarded Moon
a quick $8 million profit by buying back $60 million in uncollectible loans
from the bank.
When democracy was restored in Uruguay in 1985, Moon's operations
survived by keeping close ties to still-influential military officers and
to conservative civilian politicians. They helped Moon fend off opposition
from civilian president Julio Maria Sanguinetti and other critics.
Later, Opus Dei, a right-wing international Catholic organization,
joined in criticizing Moon's cult-like church. The Unification Church considers
Jesus a failed messiah and Moon the new Chosen One who is destined to rule
a one-world theocracy that will eliminate all individuality.
But Moon's deep roots in Uruguayan politics and business
proved strong enough to withstand his critics. His bank brushed aside nettlesome
questions about money-laundering and other financial irregularities. Moon's
allies -- and Uruguay's secrecy laws -- prevented even the powerful Opus
Dei from forcing the bank's financial records into public view.
Through the 1980s, Moon continued to expand his Uruguayan
holdings. He bought the elegant-but-faded Hotel Victoria, the Ultimas Noticias
newspaper, a travel agency and vast tracts of real estate. His big investments
in the hotel and newspaper, however, never generated significant profits.
The newspaper never achieved strong circulation or advertising revenues.
Despite an upgrading to five-star status, the Hotel Victoria never flourished
Finally, in 1993, Uruguayan Central Bank president Ramon Diaz pushed
the long-whispered allegations against Moon's bank into the parliamentary
record. Diaz accused Banco de Credito of violating financial rules, operating
at a constant loss, practicing dubious credit policies with insolvent customers
and holding inadequate cash reserves.
Diaz demanded that the bank add $30 million in capital within
48 hours or face government intervention. Within hours, panicked customers
pulled $10 million in deposits out of the bank. Diaz's goal of forcing Moon
to sell the bank seemed within reach. One senator claimed that Diaz hoped
an Argentine investment group would step in and take over the bank.
Moon proved, however, that his seemingly bottomless well
of cash could fill the bank's vaults in a crisis. Before the 48-hour deadline,
Moon transferred $30 million into the ailing bank and retained control.
Since then, Moon's influence has continued to grow in Uruguay, although
Banco de Credito continues to suffer chronic financial troubles.
Despite delivery of mysterious cash from Moon's followers
-- such as the alleged $80 million deposits in November 1996 -- the bank
again has slipped into a deficit estimated at $120 million. The deficit
-- or "red numbers" in the Spanish jargon -- has been blamed largely
on credits given to the Rio de la Plata hotel company ($65 million) and
to Creditos S.A., a financial institution that was the bank's first client.
Moon's investment arm, Rondilcor S.A., also has invested
money in privatization projects that have been slow to turn a profit. According
to a U.S. State Department cable obtained under the Freedom of Information
Act, "the Unification Church has few adherents in Uruguay [but] the
church's hotel ventures are just part of a significant business presence
that the church hopes will prove profitable over the long term."
The cable, dated Sept. 17, 1994, added that "Rondilcor
officials admit ... that the church is at least several years away from
earning back its investments even under the most favorable circumstances."
But Moon's money continued to flow into new projects anyway.
Embittered by his church's decline in the United States -- where membership
reportedly has sunk to 3,000 members -- Moon shifted his personal base of
operations to a luxurious estate in Uruguay. In the last three years, Moon
also bought the ex-Frigorifico Nacional, a cool-storage house; the Astilleros
Tsakos dockyard; and other privatized port services. Moon has promised to
build containers as well as fishing and chemical ships -- and to construct
a paper plant.
Nelson Cesin, a reporter for the newsweekly Brecha, has noted
that the new acquisitions would allow Moon to move money freely around the
Planes & Subs
Moon himself has announced an ambitious plan for a worldwide transportation
and propaganda system. To his followers, he has boasted about plans for
building a network of small airstrips throughout South America and other
parts of the world, supposedly for tourism. In one speech on Jan. 2, 1996,
he even announced a scheme for deploying submarines to evade coastal patrols.
"There are so many restrictions due to national boundaries
worldwide," Moon lamented during the speech, which the Unification
Church posted on its Internet site. "If you have a submarine, you don't
have to be bound in that way."
(As bizarre as Moon's submarine project might sound, a cable
from the U.S. Embassy in Japan, dated Feb. 18, 1994, cited press reports
that a Moon-connected Japanese company, Toen Shoji, had bought 40 Russian
submarines. The subs were supposedly bound for North Korea where they were
to be dismantled and melted down as scrap.)
Moon, however, understands that his primary protection comes
from the political alliances that his money has bought. In the 1996 speech,
Moon added that he "has been practicing the philosophy of fishing here
[in Uruguay]. He [Moon] gave the bait to Uruguay and then the bigger fish
of Argentina, Brazil and Paraguay kept their mouths open, waiting for a
bigger bait silently. The bigger the fish, the bigger the mouth. Therefore,
Father [Moon] is able to hook them more easily."
In recent years, Moon also has continued his clandestine
cash transfers into the United States. According to court records from a
divorce case involving one of Moon's sons, Hyo Jin, $1 million in cash was
carried into the United States in early 1994 by Moon's followers and delivered
to Hyo Jin who ran a Moon-controlled recording studio in New York City.
In an interview, one of Hyo Jin Moon's top aides, Maria Madelene
Pretorious, stated that the cash was circulated through Moon's business
empire in the United States as a way to launder it, before it was dispatched
to church projects.
In a separate interview, another senior figure in Moon's
U.S. operations claimed that after Asia slid into an economic downturn in
the 1990s, the bulk of Moon's money began to arrive from South America.
[For more details on Moon's recent activities and history, see iF Magazine,
Clearly, Moon's big-dollar spending on conservative politicians
in the United States and South America has helped shield the South Korean
theocrat from serious scrutiny. In recent years, Moon's American beneficiaries
have included former President George Bush and Religious Right leader, Jerry
But paradoxically, Moon's banking deficits in Uruguay have
given him additional leverage. Uruguayan authorities fear that a major financial
bankruptcy could damage the country's reputation. So, in exchange for "laissez-faire"
treatment for his bank, Moon pumps in the necessary cash to keep Banco de
Still, the ultimate source of Moon's influence remains his
subterranean flow of money, a virtual underground river of cash spewing
from a hidden spring whose origin remains the biggest mystery of Moon's
organization. It is that spring which keeps Moon's Uruguayan "oasis"
green and his critics in both North and South America at bay.
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