New Internationalist

Ashes To Ashes

Issue 101

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PACIFIC ISLANDS [image, unknown] High finance pirates

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Phoenix: ashes to ashes
Big money, backed by some of the toughest soldiers of economic fortune last year tried to take control of a Pacific Island. Soldiers from Papua New Guinea joined the government of Vanuatu in the first-ever show of military support between Islands nations. The shadowy Phoenix Foundation, champion of extreme monetarism, is still licking its wounds, Mike Parsons in Vila investigates the Foundation's sinister ambitions.

It was an odd assortment of people who met at a small guesthouse in Woodend, just outside Melbourne, Australia in March 1979. Led by one of Melbourne's multi-millionaires, it included - Americans and Australians as well as French and German speakers. They talked of being 'officers of a group called Phoenix' and mentioned the name 'Oliver.'

The guesthouse staff found the group strange but amusing. They split their sides with laughter after hearing dinner table talk of arms supplies and organising for a revolutionary insurrection. They thought it was 'some sort of fantasy.' Strangest of all was the man they called 'The King.' He was from the New Hebrides and his name was Jimmy Stevens.

A year later this 'fantasy' became reality in the secessionist rebellion on the island of Espiritu Santo in the New Hebrides, now the independent Republic of Vanuatu. Phoenix had been five years fomenting the rebellion and had spent, by its own reckoning, more than $250,000 supplying weapons, transport and radio equipment to the movement.

Organisers of the Phoenix Foundation first adopted the name in June 1975. At that time there were three trustees, all of whom equated human freedom with laissez faire capitalism. They were obsessed with transforming this ideal into a real life sovereign state. They were Michael Oliver, a Nevada real estate millionaire and author of New Constitution for a New Country written in 1968; his friend James Murt KcKeever, and Harry D. Schultz, at $2000 an hour the world's highest paid investment adviser.

Both McKeever and Schultz publish newsletters advising subscribers on the best ways to avoid taxes, dodge laws and make big profits. All three believe fanatically in gold-based monetarist economics.

Of the three, the most respectable and powerful is Schultz. Readers of his International Harry Schultz Letter include Margaret Thatcher, her adviser Sir Keith Joseph, South African Finance Minister Owen Horwood and Saudi Arabian oil minister Sheik Yamani.

In 1980 Phoenix declared that much of its efforts were now being directed toward helping small countries striving for. independence. It talked of those countries whose leaders are 'farsighted enough to recognise the threat of socialism/communism, and who sincerely want to build their country around the individual instead of creating a monolithic government. Surprisingly, there are several such embryonic potential nations around the world. And for all their spunk, they are having a tough struggle to repel the advances of marauders, for example, neocolonialists like Russia who care not a fiddle for basic human rights. We in Phoenix are actively giving these countries the encouragement, support, physical and technical advice they require.'

In 1972 Oliver and his band made the first attempt to create their 'new country.' This was the 'Republic of Minerva,' a tiny reef southwest of Tonga more than a metre under water at high tide. Two thousand Americans were lured into supporting the planned seizure of the reef and the creation of a taxless utopian state where free enterprise and 'rugged individualism' would mostly substitute for government.

The venture was organised by Michael Oliver's Ocean Life Research Foundation. In a characteristic statement of principle, the 'President of Minerva,' Morris Davis, declared at the time: 'People will be free to do as they damn well please. Nothing will be illegal so long it does not infringe on the rights of others. If a citizen wishes to open a tavern, set up gambling or make pornographic films, the government will not interfere.'

The personal invervention of the King of Tonga made the republic shortlived, but Davis's statement attracted the twilight zone of capitalism to Oliver's cause. They included ex-CIA, OSS, SAS and FBI agents, soldiers of fortune, tax-dodge lawyers and tax-haven specialists, arms dealers, drug traffickers, mafiosi and straight-out hustlers.

It was this shadowy world which now enveloped Oliver. In 1973 he formed a plan to foster a revolution on the island of Abaco in the Bahamas as a means of creating his libertarian nirvana.

His chief aide was Mitchell Livingston Webell, OSS veteran of Indochina, millionaire firearms tycoon, head of Military Armaments Corporation (MAC), trainer of mercenary armies and inventor of the best muzzle silencer for the world's deadliest hand-gun - the Ingram ME machine gun pistol capable of firing 14 shots a second, weighting about 1.5 kilograms and costing less than $100. From MAC, naturally.

After a year's propaganda amongst discontented Abaconians, involving the issuing of land share certificates and the smuggling in of radios and arms by plane, the plot was foiled by the independent Bahamas government. Webell himself was on the run, having been indicted on a drugs charge in the US.

Like the Caribbean, the Pacific is full of small island states burdened by colonialism, illiteracy and a near absence of natural resources. In the past, the two regions were havens for slave traders, smugglers, swindlers and scoundrels. Today they are tax-havens.

Vanuatu (then the New Hebrides) became a tax haven in 1971. The same year Michael Oliver bought 4000 hectares of land there and met Jimmy Stevens. His Abaco plans having failed, he decided to renew his association with this cult leader.

A Euro-Melanesian and self-styled traditional leader on Espiritu Santo, Stevens had founded the Nagriamel movement in the early sixties to resist European encroachment on Melanesian land.

Jimmy Stevens had asked for independence for the New Hebrides in 1968. In 1969 Michael Oliver persuaded him to settle for Santo only and go it alone. Vanuatu's first national election was in 1975. It found Oliver, McKeever, Dr David Williams, the Republic of Minerva's minister of the interior, and his son, a seaplane pilot, all flying around campaigning for Nagriamel and for Santo's independence.

On December 27, 1975, Nagriamel was transformed into the 'Nagriamel Federation' at a rally and march through Santo town. This was visibly orchestrated by Phoenix Foundation personnel. At the rally, Stevens declared all members of the Nagriamel Federation would be issued with 'land share certificates.'

For their part, Oliver and McKeever were declared prohibited immigrants by the British. Subsequently Jimmy Stevens was flown by Phoenix to the United Nations, passing through Oliver's home town and returning to Santo with specially minted gold coins and Nagriamel Federation passports and flags. The 'new nation' was hailed by Harry Schultz in the New Zealand Herald as the 'Switzerland of the Pacific.'

Liaison with the Nagriamel Federation was achieved through an Australian educated Fijian chief, Ratu Osea Gavidi, who flew a Phoenix plane from Fiji to Santo which allegedly smuggled arms and radio equipment. The plane was later grounded by Fiji authorities.

In 1979 the British and French promised the New Hebrides new elections and independence. In Australia Phoenix began to move. Richard King, vice president of the Republic of Minerva - involved in an incident in which a rescue ship for Indochinese boat people was revealed to be fitted with sophisticated electronic surveillance equipment and staffed by soldiers of fortune - brought Jimmy Stevens to Australia.

Stevens' object was to promote Australian investment in the future independent Santo state. He also announced a bizarre plan to resettle 1000 Indochinese refugees on the island of Maevo, east of Santo. Maevo, also called Aurora, was then the object of a plan by the Hawaii based Aurora Corporation of L.N. Nevels Jr to create a liberatarian state identical to that envisaged by Phoenix.

The elections of November 1979 saw a total defeat for Nagriamel and disparate opposition elements ironically calling themselves the 'moderates.'

As independence approached in 1980 these now regrouped in Santo and called for secession. Jimmy Stevens once again flew to America and came back with Thomas Eck a Phoenix lawyer, from Carson City. The moderates declared the new state of Vemerana on Santo, kidnapping the district commissioner and forcing 2000 government supporters to leave the island.

With French and British troops standing by the rebels were free to plunder and pillage Santo businesses and warehouses and dynamite houses, bridges and the country's sole copra mill.

The government of Anglican Father Walter Lini was powerless to intervene until independence was granted on July 30. He then kicked out the colonial troops and brought in Papua New Guinea troops to quell the rebellion and restore order.

The Vemerana Development Corporation Trust Fund, set up by Phoenix in Panama, however, continued to solicit funds for the movement.

Previously headquartered in Amsterdam to escape US prosecution, Phoenix's new front man was Dutch gold dealer Robert J. Doorn, author of the 1980 book Blueprint for a New Nation: The Structure of the Nagriamel Federation. Based on Oliver's earlier work, this was basically a 'free enterprise constitution' in which even the right to vote had to be purchased. The foreword to the book was written by Harry Schultz. In October last year the Australian press reported that 'gold guru' Harry Schultz was to set up a permanent base in Sydney.

Schultz - now Sir Harry Schultz, the title having been bestowed upon him by the tiny taxless state of Leichtenstein - has recently broadened his role as a 'tipster on currencies, broking precious metals, commodities and tax havens' by turning strategist and warning the West of the dire consequence unless it get tough with the Soviet Union and immediately embark on a massive arms spending spree.' Such a spree would obviously not be bad for business for the MAC.

In December last year rumours abounded in Fiji that Phoenix was behind on American pine forest exploitation deal that by-passed government channels and negotiated directly with landowners through middleman Ratu Osea Gavidi. Fiji's South Pacific Islands Business News commented: 'The situation that exists with Fiji's pine is made to order for the untrammelled free enterprise and the elimination of all government interference in business realised through the persuasion of breakaway local groups such as that on Santo.' The fact that the deal involved a shadowy concern called United Marketing Corporation based in Phoenix, Arizona only added to the speculation.

Meanwhile Phoenix Foundation newsletters continue to come out of Amsterdam talking of the Isle of Man and the Azores as well as Santo and Aurora as continuing Phoenix targets. Obviously, as long as Phoenix exists, with backers of the calibre of Harry Schultz, no small nation is safe.

Mike Parsons is a researcher for the Chief Minister's office, Vanuatu.


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