Blood money

By Tim Wheeler, People's Weekly World, 5 April 1997

WASHINGTON—The story of Nazi Holocaust survivors struggling to regain family assets hidden in Swiss bank accounts has stirred such indignation that at least half a dozen investigations of the scandal are underway. Swiss bankers claim they have found only 774 dormant accounts with deposits totaling $32 million..p

Attention has shifted to the far larger question: What was the total value of the loot stolen by the Nazis during the 12-year Third Reich and what happened to it? Not all of the loot ended up in Zurich.

There is the 377 metric tons of Nazi bullion confiscated under the 1946 Washington Agreement and stored in the Federal Reserve bank vaults in Manhattan and the Bank of England in London.

The lion's share, worth $4 billion in current dollars, was long ago returned to the central banks of Europe, The New York Times reported Feb. 4. President Clinton announced the $68 million in gold bars that remains may be used to compensate Holocaust victims.

Clinton has ordered an investigation of the U.S. role in the seizure of the Nazi assets. A report by the State Department is due in April. The investigators have at their disposal more than a ton of recently declassified documents stored at the National Archives here.

In 1943, the U.S. set up Project Safehaven to track down Nazi loot. According to the cover story in the Feb. 24 issue of Time, Allen Dulles, then an agent of the U.S. Office of Strategic Services (OSS) assigned to Zurich, warned the Swiss government that much of the 100 tons of gold bullion the Reichsbank was selling for Swiss francs was stolen ... Eventually, Safehaven agents concluded that some $6 billion in Nazi assets had been transferred into Switzerland from 1938 to 1945 under cover of bank-secrecy laws.

Dulles buys Italian election with Nazi loot

But investigative journalist Christopher Simpson presents a far different picture of Dulles' role. It is contained in his book Blowback which exposes the recruitment after the war of hundreds of Nazi war criminals by the CIA of which Dulles was a founder and director.

In 1947, the Communist Party of Italy, admired for leading the fight against Mussolini, was expected to win major gains in Italy's first post-war election. The Truman administration unleashed a covert operation to block the anti-fascist victory. Simpson quotes New York's Francis Cardinal Spellman, who served as a liaison between the CIA and the Vatican:

The U.S. government, the Cardinal declared, had secretly released large sums in ‘black currency’ in Italy to the Catholic church ... a substantial part of this funding for clandestine activities in Italy came from captured Nazi assets including money and gold that the Nazis had looted from the Jews.

The trail of this tainted money, Simpson continues, dates back to 1941 when the War Powers Act authorized the U.S. Treasury's Exchange Stabilization Fund to serve as a holding pool for captured Nazi valuables--currency, gold, jewels, and even stocks and bonds.

The Exchange Stabilization Fund, Simpson adds, was authorized to safeguard the portion of the Nazi hoard that had been uncovered and confiscated by the United States in the Safehaven program ... In reality, this pool of money became a secret source of financing for U.S. clandestine operations in the early days of the CIA.

The CIA was a young organization in those days, the book continues. Therefore much of this (Italian) campaign was handled on an ad hoc basis out of the offices of Allen and John Foster Dulles at the Sullivan & Cromwell law firm in New York.

Italy's Christian Democrats, with thousands of fascists hiding in its ranks, won the election. The undertaking became the model for CIA covert operations worldwide, sometimes using velvet glove tactics but more often assassinations, paramilitary warfare and military coups - tactics that bear a striking resemblance to Hitler's Brown Shirt terrorism.

A bank's dalliance with the Nazis

Before World War II, the Dulles brothers had been appointed to the board of the J. Henry Schroder Bank with offices in Wall Street, London, Zurich, and Hamburg. The Dulles brothers were senior partners in Sullivan & Cromwell, the Wall Street law firm that represented the legal interests of the Rockefeller empire. Allen Dulles was general counsel of the Schroder Bank, which served as a link between the Rockefellers, London banks, and German high finance. His clients included the I.G. Farben chemical trust and the Fritz Thyssen steel trust.

The Soviet magazine New Times carried a two-part series on the J. Henry Schroder Bank in February 1947 by Trud correspondent A. Leonidov. Leonidov charges that this Anglo-German-U.S. bank's influence spread literally to every artery of modern capitalist society: banks and heavy industry, diplomacy and military staffs, influential political parties, military and political intelligence.

A scion of the Schroder family was Baron Kurt von Schroder, grandson of the founder of the Schroder Bank. Kurt von Schroder was head of the I.H. Stein Bank of Cologne, the personal bank of both Adolf Hitler and Heinrich Himmler. The J. Henry Schroder Bank served as the official agent of the I.H. Stein Bank in London.

Writes Leonidov, This was the Baron Schroder who ... arranged the notorious meeting of Hitler with the Ruhr kings when the latter decided to turn over power to the Nazis and to furnish Hitler with funds, thereby paving the way to World War II.

Financiers back Hitler

The German financiers decided to back Hitler after the Nazi's suffered a disastrous defeat in the Nov. 6, 1932 elections, losing two million votes and 35 seats in the Reichstag. The vote for the German Communist Party increased by 750,000 gaining 11 more deputies. The German masses, facing mass unemployment and starvation in the Great Depression, were turning toward socialism.

The German financiers counted on Hitler to save German capitalism by annihilating the Communists, socialists, the Jews, smashing Germany's Communist-led unions, preparing Germany for a war to conquer the world.

During the prewar period of the appeasement of fascism, the Schroder Bank sought to strengthen Germany's ties with Britain and the U.S., to open the road to the East and to create a great Western bloc pointed against the Soviet Union.

Leonidov reports that during World War II, Kurt von Schroder served together with the Third Reich's Finance Minister, Walther Funk, as a director of the Bank for International Settlements (BIS) in Basel Switzerland. By 1944, the BIS was dominated by Axis bankers but the president was an American, Thomas McKittrick. After the war, he was appointed vice president of the Rockefeller- controlled Chase National Bank.

Nazis launder their loot in Switzerland

Simpson corroborates Leonidov's findings in his recent book The Splendid Blond Beast: Money, Law, and Genocide in the 20th Century. Writes Simpson, BIS cooperated with the German Reichsbank's efforts to launder gold stolen from the mouths of death-camp victims. The BIS, he continued, participated in a complex Nazi scheme to use currency manipulations and bank clearing procedures to loot the economies of entire countries.

Thus, while Allied soldiers were fighting and dying to defeat fascism, these U.S. and British financiers were helping launder Nazi loot in Switzerland.

Dulles' deal with the SS

The Nuremburg War Crimes Tribunal shed some light on Allen Dulles' wartime activities as OSS chief in Zurich. Leonidov writes: His chief adjutant in intelligence work was another director of the New York Schroder bank, a certain Lada-Moscarski, who held the official post of American vice consul in Zurich....building up contacts with the ‘anti-Hitler’ opposition in Germany. He was referring to top Nazis like financier Hjalmar Schacht, who, late in the war, realized that Hitler was doomed and should be eliminated to clear the way for Germany's separate surrender to the U.S. and Britain, excluding the Soviet Union.

Allen Dulles' obituary in the Jan. 31, 1969 New York Times reports that in his communiques to Washington from Zurich, Dulles argued vehemently that the insistence on unconditional surrender ... made it impossible to promise the German dissidents less rigid terms for peace if Hitler were overthrown.

In an OSS project code-named Operation Sunrise, Dulles, Maj. Gen. Lyman L. Lemnitzer and a British officer, Maj. Gen. Terence S. Airey met with SS Gen. Karl Wolff and with SS Gen. Walter Rauff at a villa near Ascano Switzerland to arrange the surrender of all German forces in Italy, May 2, 1945, one week earlier than the Nazi surrender to the Soviets in Berlin.

Dulles' intrigues in Switzerland failed. The worldwide united front, spearheaded by the Soviet Union, smashed the Third Reich. But even in defeat, the Nazis had their CIA collaborators who schemed to rescue them. Their numbered bank accounts were swollen with SS loot.

The other loot: profits from slave labor

After the war, Gen. Wolff lived openly at his villa on Starnberg Lake south of Munich. He operated a profitable arms export business. It took 17 years to bring Wolff to trial. He was sentenced to 15 years but served 7 years and was released. There is widespread suspicion that Dulles and the CIA aided in Rauff's escape to Chile. Rauff was the inventor of the hideous gas wagon in which thousands of innocent men women and children were murdered.

The German Democratic Republic (GDR) released a Brown Book in 1965 which states that SS Gen. Karl Wolff bore the main responsibility for the murder of 300,000 Polish Jews in the Treblinka extermination camp. In Italy, he had ordered the extermination of 15,000 Jews, Communists, partisans, and other anti-fascists.

Wolff, an expert witness, not a defendant, at the Nuremburg War Crimes Tribunal, bragged that he participated in the monthly meetings of Heinrich Himmler's Circle of Friends of the Reichsfuhrer SS. He testified that he observed chieftains of German high finance making cash contributions to the SS at the sessions. Himmler frequently took them on tours of Auschwitz and Dachau to see the system of slave labor first hand, Wolff testified.

Over 20 million people from almost all countries of Europe were dragged by the fascists into Hitler Germany as slave labor, the Brown Book charges. Hundreds of thousands of them were tortured, beaten to death, shot and gassed.

The Krupp Family Enterprise alone exploited 97,952 prisoners of war and concentration camp inmates in their Ruhr steel mills. Already in the first five years of the fascist rearmament drive, Krupp could book a net profit of 500 million Reichsmark, the GDR expose charged. In the fifth year of the war, his war criminal family had an accountable profit of over 110 million Reichsmark--gathered from the exploitation of 250,000 people ... of which tens of thousands perished as prisoners in the trusts own concentration camps.

Dr. Alfried Krupp was found guilty at Nuremburg, stripped of his huge empire and sentenced to twelve years in prison. Five years later, at the request of West German Chancellor Konrad Adenauer, Krupp was released and all his property was restored to him.

The Schroder Bank client, I.G. Farben, producer of Zyklon- B, the cyanide gas used in the death camps, reported profits of 32 million Reichsmark in 1932. By 1943, with thousands of slave laborers, I.G. Farben reaped 822 million Reichsmark in profits. They kept it all.

It was a flagrant violation of the Potsdam Agreement signed by Josef Stalin, Winston Churchill and Harry Truman, a treaty that bound the wartime Allies to break up the giant trusts that bankrolled Hitler. In contrast, I.G. Farben's vast petrochemical complex at Buna, in the Soviet sector of occupied Germany, was confiscated, later made the socialist property of the citizens of the GDR.

A warning across five decades

Senate Banking Committee Chair Alfonse D'Amato (R-N.Y.) is shouting about the skullduggery of the Swiss banks. But don't expect him to investigate this other Nazi loot, a thousandfold greater than that hidden in the Swiss banks. Now these same German, British and U.S. banks are gobbling up socialist property in East Germany, Poland, the Czech Republic, and Russia that 20 million Soviet soldiers and citizens defended with their lives in World War II.

Leonidov's revelations convey a warning across five decades. The Bechtel Corporation, a Schroder subsidiary, placed two of its directors in the Reagan Administration in 1980—George Shultz as Secretary of State and Caspar Weinberger as Secretary of Defense. Allen Dulles' old OSS crony, William J. Casey, was named as director of the CIA. They and their underling, Lt. Col. Oliver North, utilized a numbered bank account at Credit Suisse in Geneva to launder stolen money for the Reagan Administration's illegal Iran- contra wars in Nicaragua, Angola, Afghanistan, in which millions of innocent people died.

In 1995, President Clinton named James D. Wolfensohn as president of the World Bank. His bio identifies him as the former president and chief executive officer of the J. Henry Schroder Bank of New York.