[internetworkers] How Bush's grandfather helped Hitler's rise to power

Christian Stalberg cstalberg at verizon.net
Tue Sep 28 21:49:26 EDT 2004


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.

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 

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.


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 

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 

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.


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 

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.


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 

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 

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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