Let’s Talk Treason

How Corporate America Cashed in on Nazi Connections


Let John Walker Lindh be a lesson to you: Never betray your country, or even look like you may be trying to betray your country, unless you first become a very powerful corporation, like the International Business Machines Corporation. Oh, you remember John. He’s the young American who, with the sappy enthusiasm of his years (20), went abroad to study Islam and wound up carrying a rifle in the ranks of the Taliban. Was he thereby a traitor? The U.S. Constitution says that treason “shall consist only in levying war” against your country or helping your country’s enemies by “giving them aid and comfort.”

Aside from marching to the point of fevered exhaustion across the harshest terrain, getting little water and less food, his soldiering consisted mainly of being captured and thrown into an Afghan prison. There is absolutely no evidence he ever fired his rifle at anyone. So much for “levying war” against the United States. And if the Taliban got any “aid and comfort” from him, they must have been extremely hard up.

The elder George Bush, perhaps remembering some pretty sappy youngsters in his own family, couldn’t see much evil in John and dismissed him as merely another “misguided Marin County hot-tubber.”

But President George W. and his pious henchmen weren’t going to pass up this opportunity. They couldn’t catch Osama bin Laden. They couldn’t catch Osama’s chief lieutenant, Omar. But by God they’d caught John Walker Lindh and they were going to make the most of him. Attorney General John Ashcroft, nicely ignoring major portions of our history, said, “The United States is a country that cherishes religious tolerance, political democracy, and equality between men and women. By his own account, John Walker Lindh allied himself with terrorists who reject these values.”

But that weak stab at creating guilt by association obviously wasn’t going to be enough to put Lindh behind bars, so the Justice Department cooked up ten other charges, most of them mentioning “conspiracy.” If Lindh is convicted of all charges, he faces a maximum sentence of three life terms, plus additional 10-year and 30-year terms in prison. He would not be eligible for early release on any of these counts. In other words, he could be punished with a kind of protracted death penalty.

Which brings us back to the point we opened with: Why is it that honest-to-God treasonous corporations–corporations that give horrendous aid and comfort to our enemies and significantly help their wars against humanity–don’t face that kind of punishment? Or any punishment at all? Why, in fact, are they allowed to profit from their treason?

A few weeks before the government executed Timothy McVeigh, Fortune Magazine released its annual rankings of the 500 most profitable corporations. ExxonMobil was No. 1, posting its highest-ever revenue of $210 billion for the year. General Motors was No. 3, with revenues of only $180.5 billion. And the International Business Machines Corporation (IBM) was eighth among the 500, with revenues of $88.3 billion.

If McVeigh saw that issue of Fortune, and if he had known the history of those companies dating back to World War II, he surely would have been stung by the irony of the situation. Even a person of limited intelligence would have concluded that slaughter is forgivable if it is done on a truly grand scale–a far greater scale than McVeigh achieved with his makeshift fertilizer bomb–and if done for enormous profit.

From ideological madness, he had killed 168 people. From greed, ExxonMobil, GM, Ford, and IBM helped the Nazis kill tens of thousands of U.S. and allied troops in World War II–not to mention the slave laborers who died in wartime German factories operated by subsidiaries of those four companies.

This isn’t exactly news. The profoundly evil alliance of some major corporations with Nazi Germany has been known, fragmentally, for years. Despite our government’s success in covering up the details, a few writers and reporters have managed to dig out some of them. But the impact on the public’s mind has apparently been slight.

“The problem,” as Knight-Rider writer Douglas Perry has observed, “is that it’s difficult to be surprised or shocked anymore at revelations of corporate viciousness. The mendacity and soullessness of big companies is so much a part of conventional wisdom these days that the corporation-as-bad-guy has become a staple of popular film and literature.”

But there are bad guys, and then there are hideously bad guys.

The latest revelations of the collusion between U.S. industries and Hitler’s Germany appear in Edwin Black’s IBM and the Holocaust. From it we learn of the nasty teamwork between IBM and Hitler before and during World War II.

Black asks rhetorically, “What seemingly magical scheduling process could have allowed millions of Nazi victims to step onto train platforms in Germany or nineteen other Nazi-occupied countries, travel for two and three days by rail, and then step onto a ramp at Auschwitz or Treblinka–with timing so precise the victims were able to walk right out of the boxcar and into a waiting gas chamber?”

The magic came from IBM’s punch cards and card sorting systems–a precursor to the computer. These were what Hitler’s Third Reich needed “to accomplish what had never been done before–the automation of human destruction.”

Many thousands of these multi-machine sets, custom-designed by IBM’s German affiliate, were used throughout German-dominated Europe, not only for freighting Jews to the gas chambers on schedule but also to efficiently tie together the Third Reich’s government and industries.

And back at IBM headquarters in New York, executives “always understood–from the very outset of the Nazi regime in 1933–that their German subsidiary was courting and doing business with the upper echelon of the Nazi party.”

Black writes, “As for the moral dilemma, it simply did not exist for IBM. Supplying the Nazis with the technology they needed was not even debated…. Because of the almost limitless need for tabulators in Hitler’s race and geopolitical wars, IBM NY reacted enthusiastically to the prospect of Nazism. While other fearful or reviled American businessmen were curtailing or canceling their dealings with Germany,” IBM expanded its dealings there.

The absolute czar of IBM was Thomas J. Watson. He was a genius at camouflage. Surely nobody who dominated the Carnegie Endowment for Peace and the International Chamber of Commerce, as he did, could be seriously considered pro-Hitler. Even as IBM was giving Hitler crucial assistance, Watson was constantly proclaiming everywhere his mantra: “World Peace through World Trade.” And who could have suspected such a good citizen? One of the richest men in America, he gave generously to charities and the arts. He was a trustee of some of our greatest universities. He was a close adviser to the highest officials of our government, even President Roosevelt, who offered to appoint Watson Secretary of Commerce or ambassador to England.

And what a swell boss he was. His employees got good pay, liberal benefits, generous vacation time. All Watson asked in return was that his workers wear IBM uniforms (blue suits), sing IBM songs (“The name of T.J. Watson means courage none can stem/And we feel honored to be here to toast the IBM”), and show total loyalty to IBM. Perhaps that was a bit dictatorial, and in fact Watson did admire Fascism. But, says Black, “Watson was no Fascist. He was pure capitalist” and appreciated Fascism mainly because it “was good for business.”

To hide what he was up to, Watson kept the name of IBM out of his German subsidiary. It was instead named Deutsche Hollerith Maschinen Gessellschaft (better known by its abbreviation, Dehomag), and IBM successfully presented it to the world as a wholly independent corporation. In fact, writes Black, throughout the years in which the Third Reich was taking shape, from 1933 until the summer of 1940, “Watson personally micro-managed virtually every Dehomag decision.”

If the U.S. government was blind to what was going on, which is hard to believe, Hitler was certainly not. In 1937 he conferred on Watson the Merit Cross of the German Eagle with Star, a medal ranking second in prestige only to Hitler’s German Grand Cross. Watson accepted it “with pride and deep gratitude.”

But in 1940, with Hitler’s troops sweeping across Europe, Watson apparently feared our government might wonder why Hitler was so fond of him, so he returned the medal, and did it with expertly contrived publicity. It was a smart public relations move. About that time, writes Black, “IBM itself was coming under scrutiny for its Nazi connections.” FBI Director J. Edgar Hoover sent agents to investigate. But Watson had enough powerful connections in the State Department and in the White House to cut short any serious probe into IBM’s ties with Hitler’s Germany.

Watson perfected his subterfuge by telling our State Department that IBM was severing all ties with its subsidiaries in Nazi Europe. Significantly, Watson did not tell those subsidiaries to stop making punch cards for the Nazis and to stop any other support for Hitler. “The cable merely directed managers not ‘to call on us for any advice or assistance until further notice.'”

Although Dehomag had been integral to the Nazi war machine, it was somehow immune from the many post-war investigations aimed at exposing collaborators. So Watson boldly discarded its German title and re-named it IBM Germany. Indeed, IBM was permitted to reclaim all its subsidiaries in Nazi Europe–and their wartime profits.

Chief among other collaborators who have been exposed for supporting Hitler’s war machine are ExxonMobil (then known as Standard Oil), General Motors, and Ford.

When Germany prepared to invade Poland, thereby launching World War II, it was not yet producing tetraethyl lead and it desperately needed that gasoline additive to run tanks and planes. Ethyl Gasoline Corporation (owned fifty percent each by Standard Oil and General Motors) supplied Hitler’s needs.

The deal was brought about through Standard’s close ties to I.G. Farben, the giant chemical company that, among other things, is remembered as landlord of the infamously efficient extermination camp at Auschwitz, which was said to be able to kill daily 12,000 Jews, Gypsies, homosexuals, and dissidents.

I.G. Farben executive August von Knieriem acknowledged that Hitler’s war would have been “impossible” had not “the Americans presented us with the production plans, complete with their know-how” for the crucial gasoline additive.

In another damaging collaboration with I.G. Farben (this collaboration continued even after the United States declared war on Germany), the oil company turned over synthetic rubber processes to the German Navy while withholding the same technical information from the United States. (For more on Standard Oil’s treacherous alliance, see The Crime and Punishment of I.G. Farben, by Joseph Borkin, Free Press, 1978.)

The German affiliates of Ford and General Motors controlled 70 percent of the German auto market at the outbreak of the war in 1939, and they quickly retooled to supply most of the military trucks used by the Nazis to invade Poland, France, and the Soviet Union. Also, some of the most effective bombers in the German air force were equipped with engines and parts built by a GM plant in Russelsheim. This, of course, was done with the full knowledge and encouragement of their headquarters in America.

After the Nazis conquered Czechoslovakia in 1939, GM’s chairman, Alfred P. Sloan, was so overjoyed by the high profits at his German factories that he vowed to keep control of them as long as possible. Ford was similarly enthusiastic about Hitler’s successes, and–with strong encouragement from company executives back in Dearborn–it continued to cooperate with the Nazis for eight months after the United States declared war on Germany. Some of the booming profits they were so enthusiastic about were the result of using slave labor.

Like IBM’s Watson, GM’s James Mooney and Henry Ford received the highest medal Nazi Germany could give to a foreigner, the Grand Cross of the German Eagle. And with it came Hitler’s personal thanks for “distinguished service to the Reich.” It seems fair to interpret the medal as “giving aid and comfort to the enemy,” which, let us remember, is part of the Constitution’s definition of treason, and is a capital crime. Federal Judge Charles Clark said that because Standard Oil continued to work with I.G. Farben even after the United States declared war on Germany, it could be considered a national enemy. And Senator Harry Truman used the word “treason” to describe Standard Oil’s activities.

But this was just talk. None of the corporations, or their executives, were punished. In fact, our government paid Ford Motor Company and GM millions of dollars for damages done by our bombers to their plants in Germany and France, and they were permitted to retain the same managers who had operated their factories under the Nazis.

(For brief, but excellent reports on the collaboration of the automakers, see “Ford and the Fuhrer,” by Ken Silverstein, in the January 24, 2000 Nation magazine, and “Whose Side Were They On,” by Michael Doggs in the Washington Post National Weekly, December 7, 1998.)

Perhaps one can justifiably conclude from these historical low points that immunity from punishment depends almost solely on whether the traitor is important to the business world. I don’t mean our government is ready to forgive only powerful U.S. businessmen and corporations. Foreign powerhouses are also eligible. Even the most savage war criminals? Yes, if they are still potentially useful to world business.

U.S. military judges presided at the postwar trial of twenty-four I.G. Farben executives. Remember, we are talking about the men who built labor camps like the Fuerstengrube mine and the Auschwitz concentration camp complex in Poland where an estimated four million prisoners died–either worked and starved to death or simply executed for such crimes (recorded in I.G. Farben files) as “eating bones from a garbage pail” and “warming hands.”

U.S. military judges presided at their trial. Apparently because these criminals still had close ties with U.S. corporations, the judges decided it would be wise to consider them not as disgusting, homicidal ideologues but simply as businessmen who were obliged to kill for the corporate bottom line. In any event, the toughest sentence handed down for carrying out “slavery and mass murder” was eight years. Some got six years for that crime. Executives convicted of “plunder and spoliation” got as little as 18 months. Most of the sentences were later commuted. Fritz der Meer, the only executive convicted of all the crimes in the book, was out of prison so fast that within a decade he was chairman of the supervisory board of Bayer, one of the largest I.G. Farben companies.

Bouncing back also was the entire I.G. Farben empire. Because it played such an important role in helping the Nazi army, General Eisenhower had recommended dynamiting some of its factories, scattering stock control of other I.G. industries to the four winds, and squeezing the last dollar of reparations from the giant. None of this was done. Joseph Borkin, an historian of German cartels, says that American businessmen pressed our government with “a new point of view”–namely, go easy. And so it did. Today, because of those forgiving capitalist hands across the sea, each of I.G. Farben’s successor companies is larger than the original I.G. Farben was in its heyday. War pays.

The most impressive gift of commercial justice for Germany’s corporate murderers was given by John J. McCloy, often identified as “The Chairman” of the American Establishment. He had been a key member of various Wall Street firms; for a while he was cha
rman of Chase Manh
ttan Bank, and also for a while boss of the Ford Foundation. In those roles he assisted railroad management in swindling thousands of small shareholders; he helped Chase into a merger that launched a flood of other mergers and damaged many smaller banks; and he turned the nation’s then-wealthiest foundation into a piggy-bank for the CIA.

So it was only natural that the Wall Street-Washington Establishment had him appointed high commissioner of post-war Germany. It knew he would not let justice interfere with business. Explaining that he wanted to help Germany “get back on its feet,” McCloy commuted two-thirds of the death sentences of mass murderers (such as the SS officer who personally executed 1,500 Jews), and radically reduced the prison sentences of doctors who had experimented on death-camp prisoners. Many high-ranking judges who had administered Gestapo justice were soon freed.

As for the industrialists who had built and maintained the Nazi war machine, McCloy freed some immediately. Among them was Alfred Krupp, Germany’s premier munitions manufacturer, whose factories had worked thousands of slave laborers to death. Krupp’s original sentence had included loss of all property.

McCloy cancelled that punishment and within a few years Krupp was again one of the richest industrialists in the world. (For more on these things, see The Chairman: John J. McCloy: The Making of the American Establishment, by Kai Bird, Simon &Schuster, 1992.)

Does that kind of justice bother you? Well, hold on. We have saved till last a couple of the most outrageous examples of how our government forgave some of the worst criminals of World War II in order to create military-industrial profits and hoodwink the public into paying for them without protesting too much–just like today. It was done by vastly inflating the danger of communism (which equates with today’s “nations that build weapons of mass destruction”) to create the kind of national near-hysteria that approved of enormous defense budgets and weaker civil liberties.

The United States was rescued from the decade-long Great Depression by its entry into World War II. In 1940, the last year of the Depression, the United States spent only 16 percent of its federal budget on defense. The war lifted that to 84 percent of the budget. As the war came to a close, the percentage dropped by more than half, and many industrialists feared a new depression might be coming. They agreed with Charles E. Wilson, president of General Electric, when he told the Army Ordnance Association in 1944 that the national goal must be “a permanent war economy.”

But Americans were tired of war, and Congress was sensitive to the public’s apathy. How could it be aroused to continue paying for a war economy? They needed a new enemy. The Fascists were no longer a threat. How about reviving America’s old bogey, Communists? That might be hard to do. “In no way did the Soviet Union appear, at that moment, as a military threat to this country,” George Kennan, one of the State Department’s brightest officials at that time, wrote 40 years later. “The Soviet Union was utterly exhausted by the exertions and sacrifices of the recent war,” in which it had been our ally. (See, Dangerous Doctrine, by Saul Landau,Westview Press, 1988).

But if our leaders used the right propaganda, the Soviets could be made to seem terribly threatening. A series of false alarms was sounded. Senator Arthur Vandenburg, chairman of the Senate Foreign Relations Committee, privately urged President Truman to “make a personal appearance before Congress and scare hell out of the country.” This he did in March 1947, going to Congress to outline what came to be known as the “Truman Doctrine,” which, as one analyst put it, was a “commitment to confront the Soviet Union anywhere and everywhere, to risk war by shaping alliances with chaotic, disorganized, and repressive governments, to stretch American influence to those parts of the world in which the United States would have trouble projecting power and maintaining control.” Just like today. (See, The Party of Fear: From Nativist Movements to the New Right in American History, by David Harry Bennett, University of North Carolina Press, 2001).

To make the public think the threat was closer to home, President Truman launched a humongous witch hunt. It was called the Federal Employee Loyalty Program, and forced four million people to undergo loyalty and security checks. Charges were brought against 9,000 individuals. Not a single spy or saboteur was found, but the program was successful in spreading fear and suspicion.

If Bush has a good hysteria-huckster in Attorney General Ashcroft, Truman had an even better one in Attorney General J. Howard McGrath, who warned that “there are today many Communists in America–they are everywhere…in factories, offices, butcher shops, street corners, in private business.” (The Party of Fear).

Meanwhile, our government was importing thousands of proved Communist-haters to help in this crusade. Some of the brightest killers in the Nazi military apparatus–men who should have spent the rest of their lives in prison–were recruited by our government and given important jobs. To sneak them into service, our officials often falsified their records. Nazi scientists who had built the missiles that demolished much of London now became the nucleus of NASA’s team to conquer space before Soviet scientists did. Nazis who had experience as political organizers, propagandists, and spies, were eagerly employed by the Central Intelligence Agency, the State Department, the U.S. Army’s intelligence unit, and by some Congressional committees. (For the best, and first, full account of America’s recruitment of Nazis, and all its disastrous effects on our domestic and foreign policies, see Christopher Simpson’s Blowback, Collier Books, 1989.)

More than 700 scientists, engineers, and technicians were brought into the United States under special immigration programs. It’s estimated that as many as 80 percent of these specialists were former Nazi party member or SS men.

One was Arthur Louis Hugo Randolph. At NASA, he was important in the construction of the Saturn V rockets that launched America’s astronauts to the moon. His work in Germany had been somewhat bloodier.

He had helped develop jet-propelled buzzbombs. After British bombers demolished the factory where they were being built, Rudolph and his colleagues were forced to move underground–to old mining tunnels. To make room for the rocket factory, the tunnels had to be expanded, and that’s where Rudolph’s talents as a manager came into play.

The expansion was done by hand. A slave camp was set up. For two years Rudolph was its chief operations director. His workers wore clothing of the thinnest material, even in freezing weather. When they ended their long days–sometimes they worked round the clock–they slept on the damp ground. A day’s food rations were two bowls of “soup,” and sometimes the supply ran out. The assembly-line workers who actually made the missiles after the tunnel-factory was finished got similar treatment.

An estimated 20,000 prisoners were killed through starvation, disease, or execution and Rudolph is believed to have had something to do with the death of at least one-quarter of them. When American soldiers got to the factory in 1945, they found hundreds of bodies strewn around, some partly burned, some half-rotted.

But Rudolph had fled–to America–with the help of our government. Here he worked for the Army and for NASA with distinction for 40 years. Finally the press revealed his sordid past. Was he punished? No. He was deported to Germany, where he lived on a fat U.S. government pension.

The CIA recruited such men as Baron Otto von Bolschwing, a spymaster for the Nazis. In Bucharest, he had organized a pogrom in which hundreds of Jews were killed–some were butchered in a municipal meat-packing plant, hung on meathooks, and skinned. When Germany was conquered, the CIA immediately put him to work as its highest-ranking contract employee in Europe, spying on the Soviets. Finally, to reward him, the CIA brought him to this country, using false identification papers, which allowed him to become a citizen.

But the CIA’s most important recruit–and certainly the most damaging to this country–was General Reinhard Gehlen, who had been Hitler’s most senior military intelligence officer on the Eastern front. The CIA admired him because he was allegedly an expert on the Soviet military, having obtained much of his information by participating in one of the war’s greatest atrocities: the torture, interrogation, and murder by starvation of some four million Soviet prisoners.

The CIA spent $200 million helping Gehlen gather together his old espionage network of Nazis and collaborators, and for decades the CIA and U.S. Army intelligence relied on (and welcomed) his group’s gloomy analysis, which was always slanted to make communism and the USSR much more of a threat than they really were.

This paranoiac data was leaked to Congress, thence to the press, and thence to an increasingly nervous public–thereby assuring ever bigger budgets for the government’s military.

Over the past few years, only gradually and reluctantly, the CIA has begun releasing heretofore secret documents showing that from the end of World War II until the early 1990s, the CIA gave the White House and Congress wildly exaggerated estimates of the Soviets’ strength. Its economy was reported to be growing 50 percent faster than the U.S. economy; its military industry was said to be equal, if not the superior, of our own. In fact, the Soviet economy was a wreck. The fallacy of these reports frightened U.S. leaders into wasting billions of our tax dollars on a senseless arms race.

General Gehlen helped launch that five-decade deception. But others maintained it. In 1995 the CIA director stunned Washington by confessing that the agency had deliberately passed along those reports even though it knew that some of them were fatally flawed.

Now do you see why John Walker Lindh’s crime was so heinous? Because it didn’t put a dime into our business economy, that’s why. The CIA lies gave aid and comfort to the enemy, sure, but they also gave aid and comfort to our military industrialists. And that made everything OK.

Robert Sherrill watches corporate America for the Observer.