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On Holocaust Remembrance Day, it's worth remembering how Bush's grandfather help

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On Holocaust Remembrance Day, it's worth remembering how Bush's

grandfather helped Hitler's rise to power. 1/28

 

http://www.guardian.co.uk/usa/story/0,12271,1312540,00.html

 

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

 

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.

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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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