[A-List] FW: How Bush's grandfather helped Hitler's rise to power

Mon Sep 27 15:08:52 MDT 2004

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	How Bush's grandfather helped Hitler's rise to power 

Rumours of a link between the US first family and the Nazi war machine
have circulated for decades. Now the Guardian can reveal how
repercussions of events that culminated in action under the Trading with
the Enemy Act are still being felt by today's president 

Ben Aris in Berlin and Duncan Campbell in Washington
Saturday September 25, 2004
The Guardian <http://www.guardian.co.uk>  

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". 

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. 

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." 

"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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Government
US government portal <http://www.firstgov.gov/> 
White House <http://www.whitehouse.gov/> 
Senate <http://www.senate.gov/> 
House of Representatives <http://www.house.gov> 

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