Mystery Money

MacArthur got half a million

Corregidor. 1941. General Douglas MacArthur, having evacuated Manila before the onrushing Japanese invaders, fled to the island fortress that guards Manila Bay. Under bombardment there, he radioed appeals to Washington for help. No help could come. It was one of the darkest points of World War II in the Pacific. MacArthur talked of dying at his post.

With MacArthur and the doomed garrison on Corregidor was MacArthur's old friend Manuel Quezon, 63, the first President of the Philippines. Quezon, suffering from tuberculosis, wanted a ship to evacuate him, but MacArthur said it was too risky. The U.S. War Department also wanted Quezon evacuated, but MacArthur said it could not be done.

On Jan. 3, 1942, Quezon issued an executive order that $500,000 be transferred from the Philippine treasury in New York City to MacArthur's personal account; $140,000 was transferred to the accounts of three of MacArthur's chief aides. Quezon said this money was paid "in recognition of outstanding service" from 1935 to 1941, when MacArthur served as Field Marshal of the Philippine armed forces. On Feb. 19, MacArthur was notified that the funds had been transferred. The very next day Quezon was put aboard a U.S. submarine and taken to safety. (He died in the U.S. in 1944.) MacArthur himself was ordered to leave Corregidor soon afterward. The garrison,, he left behind fought on until it was overrun in May.

Carol M. Petillo, a Boston College assistant professor of history who discovered the long secret financial transaction while doing research for her doctorate, suggested last week that there were "many layers" to the story. "To call the money a bribe would be simplistic," she said. "President Quezon could have believed that he was acting in the best interests of his countrymen, as perhaps he was."

As for MacArthur, it was against regulations for U.S. officers to receive payment from foreign governments, but the rule could be waived for special advisers like MacArthur if the War Department approved. Petillo found evidence that both President Roosevelt and Secretary of War Henry Stimson knew of Quezon's large payment to MacArthur and did nothing about it. MacArthur's eloquent communiques from embattled Corregidor had made him a national hero. Said Petillo: "We needed a hero."

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