- 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.
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- 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.
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- 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".
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- Prescott Bush, a 6ft 4in charmer with a rich singing
voice, was the founder of the Bush political dynasty and was once considered
a potential presidential candidate himself. Like his son, George, and grandson,
George W, he went to Yale where he was, again like his descendants, a member
of the secretive and influential Skull and Bones student society. He was
an artillery captain in the first world war and married Dorothy Walker,
the daughter of George Herbert Walker, in 1921.
-
- In 1924, his 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.
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- 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.
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- 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.
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- RED-HANDED
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- 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.
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- 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."
-
- "There is no one left alive who could be prosecuted
but they did get away with it," said Loftus. "As a former federal
prosecutor, I would make a case for Prescott Bush, his father-in-law (George
Walker) and Averill Harriman [to be prosecuted] for giving aid and comfort
to the enemy. They remained on the boards of these companies knowing that
they were of financial benefit to the nation of Germany."
-
- Loftus said Prescott Bush must have been aware of what
was happening in Germany at the time. "My take on him was that he
was a not terribly successful in-law who did what Herbert Walker told him
to. Walker and Harriman were the two evil geniuses, they didn't care about
the Nazis any more than they cared about their investments with the Bolsheviks."
-
- What is also at issue is how much money Bush made from
his involvement. His supporters suggest that he had one token share. Loftus
disputes this, citing sources in "the banking and intelligence communities"
and suggesting that the Bush family, through George Herbert Walker and
Prescott, got $1.5m out of the involvement. There is, however, no paper
trail to this sum.
-
- The third person going into print on the subject is John
Buchanan, 54, a Miami-based magazine journalist who started examining the
files while working on a screenplay.
- Last year, Buchanan published his findings in the venerable
but small-circulation New Hampshire Gazette under the headline "Documents
in National Archives Prove George Bush's Grandfather Traded With the Nazis
- Even After Pearl Harbor".
- He expands on this in his book to be published next month
- Fixing America: Breaking the Stranglehold of Corporate Rule, Big Media
and the Religious Right.
-
- In the article, Buchanan, who has worked mainly in the
trade and music press with a spell as a muckraking reporter in Miami, claimed
that "the essential facts have appeared on the internet and in relatively
obscure books but were dismissed by the media and Bush family as undocumented
diatribes".
-
- Buchanan suffers from hypermania, a form of manic depression,
and when he found himself rebuffed in his initial efforts to interest the
media, he responded with a series of threats against the journalists and
media outlets that had spurned him. The threats, contained in e-mails,
suggested that he would expose the journalists as "traitors to the
truth".
-
- Unsurprisingly, he soon had difficulty getting his calls
returned. Most seriously, he faced aggravated stalking charges in Miami,
in connection with a man with whom he had fallen out over the best way
to publicise his findings. The charges were dropped last month.
-
- BIOGRAPHY
-
- Buchanan said he regretted his behaviour had damaged
his credibility but his main aim was to secure publicity for the story.
Both Loftus and Schweitzer say Buchanan has come up with previously undisclosed
documentation.
-
- The Bush family have largely responded with no comment
to any reference to Prescott Bush. Brown Brothers Harriman also declined
to comment.
-
- The Bush family recently approved a flattering biography
of Prescott Bush entitled Duty, Honour, Country by Mickey Herskowitz. The
publishers, Rutledge Hill Press, promised the book would "deal honestly
with Prescott Bush's alleged business relationships with Nazi industrialists
and other accusations".
-
- In fact, the allegations are dealt with in less than
two pages. The book refers to the Herald-Tribune story by saying that "a
person of less established ethics would have panicked ... Bush and his
partners at Brown Brothers Harriman informed the government regulators
that the account, opened in the late 1930s, was 'an unpaid courtesy for
a client' ... Prescott Bush acted quickly and openly on behalf of the firm,
served well by a reputation that had never been compromised. He made available
all records and all documents. Viewed six decades later in the era of serial
corporate scandals and shattered careers, he received what can be viewed
as the ultimate clean bill."
-
- The Prescott Bush story has been condemned by both conservatives
and some liberals as having nothing to do with the current president. It
has also been suggested that Prescott Bush had little to do with Averill
Harriman and that the two men opposed each other politically.
-
- However, documents from the Harriman papers include a
flattering wartime profile of Harriman in the New York Journal American
and next to it in the files is a letter to the financial editor of that
paper from Prescott Bush congratulating the paper for running the profile.
He added that Harriman's "performance and his whole attitude has been
a source of inspiration and pride to his partners and his friends".
-
- 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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- Guardian Unlimited © Guardian Newspapers Limited
2004
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- http://WWW.GUARDIAN.CO.UK/usa/story/0,12271,1312540,00.html
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