George Bush's grandfather, the late US senator
Prescott Bush, was a director and shareholder of companies that
profited from their involvement with the financial backers of
Nazi Germany.
The Guardian has obtained confirmation from
newly discovered files in the US National Archives that a firm
of which Prescott Bush was a director was involved with the financial
architects of Nazism.
His business dealings, which continued until his company's assets
were seized in 1942 under the Trading with the Enemy Act, has
led more than 60 years later to a civil action for damages being
brought in Germany against the Bush family by two former slave
labourers at Auschwitz and to a hum of pre-election controversy.
The evidence has also prompted one former US Nazi war crimes
prosecutor to argue that the late senator's action should have
been grounds for prosecution for giving aid and comfort to the
enemy.
The debate over Prescott Bush's behaviour has been bubbling under
the surface for some time. There has been a steady internet chatter
about the "Bush/Nazi" connection, much of it inaccurate
and unfair. But the new documents, many of which were only declassified
last year, show that even after America
had entered the war and when there was already significant information
about the Nazis' plans and policies, he worked for and profited
from companies closely involved with the very German businesses
that financed Hitler's rise to power. It has also been
suggested that the money he made from these dealings helped to
establish the Bush family fortune and set up its political dynasty.
Remarkably, little of Bush's dealings with
Germany has received public scrutiny, partly because of
the secret status of the documentation involving him. But now
the multibillion dollar legal action for damages by two Holocaust
survivors against the Bush family, and the imminent publication
of three books on the subject are threatening to make Prescott
Bush's business history an uncomfortable issue for his grandson,
George W, as he seeks re-election.
While there is no suggestion that Prescott
Bush was sympathetic to the Nazi cause, the documents reveal
that the firm he worked for, Brown Brothers Harriman (BBH), acted
as a US base for the German industrialist, Fritz Thyssen, who
helped finance Hitler in the 1930s before falling out with him
at the end of the decade. The Guardian has seen evidence that
shows Bush was the director of the New York-based Union Banking
Corporation (UBC) that represented Thyssen's US interests and
he continued to work for the bank after America entered the war.
Tantalising
Bush was also on the board of at least one of the companies that
formed part of a multinational network of front companies to allow
Thyssen to move assets around the world.
Thyssen owned the largest steel and coal company in Germany and
grew rich from Hitler's efforts to re-arm between the two world
wars. One of the pillars in Thyssen's international corporate
web, UBC, worked exclusively for, and was owned by, a Thyssen-controlled
bank in the Netherlands. More tantalising are
Bush's links to the Consolidated Silesian Steel Company (CSSC),
based in mineral rich Silesia on the German-Polish border. During
the war, the company made use of Nazi slave labour from the concentration
camps, including Auschwitz. The ownership of CSSC changed
hands several times in the 1930s, but documents from the US National
Archive declassified last year link Bush to CSSC, although it
is not clear if he and UBC were still involved in the company
when Thyssen's American assets were seized in 1942.
Three sets of archives spell out Prescott Bush's involvement.
All three are readily available, thanks to the efficient US archive
system and a helpful and dedicated staff at both the Library of
Congress in Washington and the National Archives at the University
of Maryland.
The first set of files, the Harriman papers in the Library of
Congress, show that Prescott Bush was a director and shareholder
of a number of companies involved with Thyssen.
The second set of papers, which are in the National Archives,
are contained in vesting order number 248 which records the seizure
of the company assets. What these files show is that on October
20 1942 the alien property custodian seized the assets of the
UBC, of which Prescott Bush was a director. Having gone through
the books of the bank, further seizures were made against two
affiliates, the Holland-American Trading Corporation and the Seamless
Steel Equipment Corporation. By November, the Silesian-American
Company, another of Prescott Bush's ventures, had also been seized.
The third set of documents, also at the National Archives, are
contained in the files on IG Farben, who was prosecuted for war
crimes.
A report issued by the Office of Alien Property Custodian in
1942 stated of the companies that "since 1939, these (steel
and mining) properties have been in possession of and have been
operated by the German government and have undoubtedly been of
considerable assistance to that country's war effort".
In 1924, his [Prescott's] father-in-law, a well-known St Louis
investment banker, helped set him up in business in New York with
Averill Harriman, the wealthy son of railroad magnate E H Harriman
in New York, who had gone into banking.
One of the first jobs Walker gave Bush was to manage UBC. Bush
was a founding member of the bank and the incorporation documents,
which list him as one of seven directors, show he owned one share
in UBC worth $125.
The bank was set up by Harriman and Bush's father-in-law
to provide a US bank for the Thyssens, Germany's most powerful
industrial family.
August Thyssen, the founder of the dynasty had been a major contributor
to Germany's first world war effort and in the 1920s, he and his
sons Fritz and Heinrich established a network of overseas banks
and companies so their assets and money could be whisked offshore
if threatened again.
By the time Fritz Thyssen inherited the business empire in 1926,
Germany's economic recovery was faltering. After hearing Adolf
Hitler speak, Thyssen became mesmerised by the young firebrand.
He joined the Nazi party in December 1931 and admits backing Hitler
in his autobiography, I Paid Hitler, when the National Socialists
were still a radical fringe party. He stepped in several times
to bail out the struggling party: in 1928 Thyssen had bought the
Barlow Palace on Briennerstrasse, in Munich, which Hitler converted
into the Brown House, the headquarters of the Nazi party. The
money came from another Thyssen overseas institution, the Bank
voor Handel en Scheepvarrt in Rotterdam.
By the late 1930s, Brown Brothers Harriman,
which claimed to be the world's largest private investment bank,
and UBC had bought and shipped millions of dollars of gold, fuel,
steel, coal and US treasury bonds to Germany, both feeding and
financing Hitler's build-up to war.
Between 1931 and 1933 UBC bought more than $8m worth of gold,
of which $3m was shipped abroad. According to documents seen by
the Guardian, after UBC was set up it transferred $2m to BBH accounts
and between 1924 and 1940 the assets of UBC hovered around $3m,
dropping to $1m only on a few occasions.
In 1941, Thyssen fled Germany after falling out with Hitler but
he was captured in France and detained for the remainder of the
war.
There was nothing illegal in doing business with the Thyssens
throughout the 1930s and many of America's best-known business
names invested heavily in the German economic recovery. However,
everything changed after Germany invaded Poland in 1939. Even
then it could be argued that BBH was within its rights continuing
business relations with the Thyssens until the end of 1941 as
the US was still technically neutral until the attack on Pearl
Harbor. The trouble started on July 30 1942 when the New York
Herald-Tribune ran an article entitled "Hitler's Angel Has
$3m in US Bank". UBC's huge gold purchases had raised suspicions
that the bank was in fact a "secret nest egg" hidden
in New York for Thyssen and other Nazi bigwigs. The Alien Property
Commission (APC) launched an investigation.
There is no dispute over the fact that the US government seized
a string of assets controlled by BBH - including UBC and SAC -
in the autumn of 1942 under the Trading with the Enemy act. What
is in dispute is if Harriman, Walker and Bush did more than own
these companies on paper.
Erwin May, a treasury attache and officer for the department
of investigation in the APC, was assigned to look into UBC's business.
The first fact to emerge was that Roland Harriman, Prescott Bush
and the other directors didn't actually own their shares in UBC
but merely held them on behalf of Bank voor Handel. Strangely,
no one seemed to know who owned the Rotterdam-based bank, including
UBC's president.
May wrote in his report of August 16 1941: "Union Banking
Corporation, incorporated August 4 1924, is wholly owned by the
Bank voor Handel en Scheepvaart N.V of Rotterdam, the Netherlands.
My investigation has produced no evidence as to the ownership
of the Dutch bank. Mr Cornelis [sic] Lievense, president of UBC,
claims no knowledge as to the ownership of the Bank voor Handel
but believes it possible that Baron Heinrich Thyssen, brother
of Fritz Thyssen, may own a substantial interest."
May cleared the bank of holding a golden nest
egg for the Nazi leaders but went on to describe a network of
companies spreading out from UBC across Europe, America and Canada,
and how money from voor Handel travelled to these companies through
UBC.
By September May had traced the origins of the non-American board
members and found that Dutchman HJ Kouwenhoven - who met with
Harriman in 1924 to set up UBC - had several other jobs: in addition
to being the managing director of voor Handel he was also the
director of the August Thyssen bank in Berlin and a director of
Fritz Thyssen's Union Steel Works, the holding company that controlled
Thyssen's steel and coal mine empire in Germany.
Within a few weeks, Homer Jones, the chief of the APC investigation
and research division sent a memo to the executive committee of
APC recommending the US government vest UBC and its assets. Jones
named the directors of the bank in the memo, including Prescott
Bush's name, and wrote: "Said stock is held by the above
named individuals, however, solely as nominees for the Bank voor
Handel, Rotterdam, Holland, which is owned by one or more of the
Thyssen family, nationals of Germany and Hungary. The 4,000 shares
hereinbefore set out are therefore beneficially owned and help
for the interests of enemy nationals, and are vestible by the
APC," according to the memo from the National Archives seen
by the Guardian.
Red-handed
Jones recommended that the assets be liquidated
for the benefit of the government, but instead UBC was maintained
intact and eventually returned to the American shareholders after
the war. Some claim that Bush sold his share in UBC after the
war for $1.5m - a huge amount of money at the time - but there
is no documentary evidence to support this claim. No further action
was ever taken nor was the investigation continued, despite the
fact UBC was caught red-handed operating a American shell company
for the Thyssen family eight months after America had entered
the war and that this was the bank that had partly financed Hitler's
rise to power.
The most tantalising part of the story
remains shrouded in mystery: the connection, if any, between Prescott
Bush, Thyssen, Consolidated Silesian Steel Company (CSSC) and
Auschwitz.
Thyssen's partner in United Steel Works, which had coal mines
and steel plants across the region, was Friedrich Flick, another
steel magnate who also owned part of IG Farben, the powerful German
chemical company.
Flick's plants in Poland made heavy use of slave
labour from the concentration camps in Poland. According to a
New York Times article published in March 18 1934 Flick owned
two-thirds of CSSC while "American interests" held the
rest.
The US National Archive documents show that BBH's involvement
with CSSC was more than simply holding the shares in the mid-1930s.
Bush's friend and fellow "bonesman" Knight Woolley,
another partner at BBH, wrote to Averill Harriman in January 1933
warning of problems with CSSC after the Poles started their drive
to nationalise the plant. "The Consolidated
Silesian Steel Company situation has become increasingly complicated,
and I have accordingly brought in Sullivan and Cromwell, in order
to be sure that our interests are protected," wrote
Knight. "After studying the situation Foster Dulles is insisting
that their man in Berlin get into the picture and obtain the information
which the directors here should have. You will recall that Foster
is a director and he is particularly anxious to be certain that
there is no liability attaching to the American directors."
But the ownership of the CSSC between 1939 when the Germans invaded
Poland and 1942 when the US government vested UBC and SAC is not
clear.
"SAC held coal mines and definitely
owned CSSC between 1934 and 1935, but when SAC was vested there
was no trace of CSSC. All concrete evidence of its ownership disappears
after 1935 and there are only a few traces in 1938 and 1939,"
says Eva Schweitzer, the journalist and author whose book,
America and the Holocaust, is published next month.
Silesia was quickly made part of the German Reich after the invasion,
but while Polish factories were seized by the Nazis, those belonging
to the still neutral Americans (and some other nationals) were
treated more carefully as Hitler was still hoping to persuade
the US to at least sit out the war as a neutral country. Schweitzer
says American interests were dealt with on a case-by-case basis.
The Nazis bought some out, but not others.
The two Holocaust survivors suing the US government
and the Bush family for a total of $40bn in compensation claim
both materially benefited from Auschwitz slave labour during the
second world war.
Kurt Julius Goldstein, 87, and Peter Gingold,
85, began a class action in America in 2001, but the case was
thrown out by Judge Rosemary Collier on the grounds that the government
cannot be held liable under the principle of "state sovereignty".
Jan Lissmann, one of the lawyers for the survivors,
said: "President Bush withdrew President Bill Clinton's signature
from the treaty [that founded the court] not only to protect Americans,
but also to protect himself and his family."
Lissmann argues that genocide-related cases are covered by international
law, which does hold governments accountable for their actions.
He claims the ruling was invalid as no hearing took place.
In their claims, Mr Goldstein and Mr Gingold, honorary chairman
of the League of Anti-fascists, suggest the Americans
were aware of what was happening at Auschwitz and should have
bombed the camp.
The lawyers also filed a motion in The Hague asking for an opinion
on whether state sovereignty is a valid reason for refusing to
hear their case. A ruling is expected within a month.
The petition to The Hague states: "From April 1944 on, the
American Air Force could have destroyed the camp with air raids,
as well as the railway bridges and railway lines from Hungary
to Auschwitz. The murder of about 400,000 Hungarian Holocaust
victims could have been prevented."
The case is built around a January 22 1944 executive
order signed by President Franklin Roosevelt calling on the government
to take all measures to rescue the European Jews. The lawyers
claim the order was ignored because of pressure brought by a group
of big American companies, including BBH, where Prescott Bush
was a director.
Lissmann said: "If we have a positive ruling from the court
it will cause [president] Bush huge problems and make him personally
liable to pay compensation."
The US government and the Bush family deny all
the claims against them.
In addition to Eva Schweitzer's book, two other books are about
to be published that raise the subject of Prescott Bush's business
history. The author of the second book, to be published next year,
John Loftus, is a former US attorney who prosecuted Nazi war criminals
in the 70s. Now living in St Petersburg, Florida and earning his
living as a security commentator for Fox News and ABC radio, Loftus
is working on a novel which uses some of the material he has uncovered
on Bush. Loftus stressed that what Prescott Bush was involved
in was just what many other American and British businessmen were
doing at the time.
"You can't blame Bush for what his grandfather did any more
than you can blame Jack Kennedy for what his father did - bought
Nazi stocks - but what is important is the cover-up, how it could
have gone on so successfully for half a century, and does that
have implications for us today?" he said.
"This was the mechanism by which Hitler
was funded to come to power, this was the mechanism by which the
Third Reich's defence industry was re-armed, this was the mechanism
by which Nazi profits were repatriated back to the American owners,
this was the mechanism by which investigations into the financial
laundering of the Third Reich were blunted," said Loftus,
who is vice-chairman of the Holocaust Museum in St Petersburg.
"The Union Banking Corporation was a holding company for
the Nazis, for Fritz Thyssen," said Loftus. "At
various times, the Bush family has tried to spin it, saying they
were owned by a Dutch bank and it wasn't until the Nazis took
over Holland that they realised that now the Nazis controlled
the apparent company and that is why the Bush supporters claim
when the war was over they got their money back. Both
the American treasury investigations and the intelligence investigations
in Europe completely bely that, it's
absolute horseshit. They always knew
who the ultimate beneficiaries were." [...]
The Anti-Defamation League in the US is
supportive of Prescott Bush and the Bush family. In a statement
last year they said that "rumours about the alleged Nazi
'ties' of the late Prescott Bush ... have circulated widely through
the internet in recent years. These charges are untenable and
politically motivated ... Prescott Bush was neither a Nazi nor
a Nazi sympathiser."
However, one of the country's oldest Jewish publications, the
Jewish Advocate, has aired the controversy in detail.
More than 60 years after Prescott Bush came briefly
under scrutiny at the time of a faraway war, his grandson is facing
a different kind of scrutiny but one underpinned by the same perception
that, for some people, war can be a profitable business.
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