2004: How Bush's Grandfather Helped Hitler's Rise to Power

By Ben Aris and Duncan Campbell 
The Guardian U.K.
Saturday 25 September 2004
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Rumours of a link between the U.S. 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
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.
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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.
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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.
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The evidence has also prompted one former US Naziwar crimes prosecutor to argue that the late senator’s action should have been grounds for prosecution for giving aid and comfort to the enemy.
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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
Germanyhas received public scrutiny, partly because of
the secret status of thedocumentation involving him.
But now the multibillion dollar legal actionfor
damages by two Holocaust survivors against the Bush
family, and theimminent publication of three books on
the subject are threatening tomake Prescott Bush’s
business history an uncomfortable issue for
hisgrandson, George W, as he seeks re-election.
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While there is no suggestion that Prescott
Bushwas sympathetic to the Nazi cause, the documents
reveal that the firm heworked for, Brown Brothers
Harriman (BBH), acted as a US base for theGerman
industrialist, Fritz Thyssen, who helped finance
Hitler in the1930s before falling out with him at the
end of the decade. The Guardianhas seen evidence that
shows Bush was the director of the New York-basedUnion
Banking Corporation (UBC) that represented Thyssen’s
US interestsand he continued to work for the bank
after America entered the war.
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Tantalising
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Bush was also on the board of at least one of
thecompanies that formed part of a multinational
network of front companiesto allow Thyssen to move
assets around the world.
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Thyssen owned the largest steel and coal
companyin Germany and grew rich from Hitler’s efforts
to re-arm between the twoworld wars. One of the
pillars in Thyssen’s international corporate web,UBC,
worked exclusively for, and was owned by, a
Thyssen-controlled bankin the Netherlands. More
tantalising are Bush’s links to the
ConsolidatedSilesian Steel Company (CSSC), based in
mineral rich Silesia on theGerman-Polish border.
During the war, the company made use of Nazi
slavelabour from the concentration camps, including
Auschwitz. The ownershipof CSSC changed hands several
times in the 1930s, but documents from theUS National
Archive declassified last year link Bush to CSSC,
although itis not clear if he and UBC were still
involved in the company whenThyssen’s American assets
were seized in 1942.
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Three sets of archives spell out Prescott
Bush’sinvolvement. All three are readily available,
thanks to the efficient USarchive system and a helpful
and dedicated staff at both the Library ofCongress in
Washington and the National Archives at the University
ofMaryland.
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The first set of files, the Harriman papers in
theLibrary of Congress, show that Prescott Bush was a
director andshareholder of a number of companies
involved with Thyssen.
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The second set of papers, which are in
theNational Archives, are contained in vesting order
number 248 whichrecords the seizure of the company
assets. What these files show is thaton October 20
1942 the alien property custodian seized the assets of
theUBC, of which Prescott Bush was a director. Having
gone through the booksof the bank, further seizures
were made against two affiliates, theHolland-American
Trading Corporation and the Seamless Steel
EquipmentCorporation. By November, the
Silesian-American Company, another ofPrescott Bush’s
ventures, had also been seized.
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The third set of documents, also at the
NationalArchives, are contained in the files on IG
Farben, who was prosecuted forwar crimes.
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A report issued by the Office of Alien
PropertyCustodian in 1942 stated of the companies that
“since 1939, these(steel and mining) properties have
been in possession of and have beenoperated by the
German government and have undoubtedly been
ofconsiderable assistance to that country’s war
effort”.
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Prescott Bush, a 6ft 4in charmer with a
richsinging voice, was the founder of the Bush
political dynasty and was onceconsidered a potential
presidential candidate himself. Like his son,George,
and grandson, George W, he went to Yale where he was,
again likehis descendants, a member of the secretive
and influential Skull andBones student society. He was
an artillery captain in the first world warand married
Dorothy Walker, the daughter of George Herbert Walker,
in1921.
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In 1924, his father-in-law, a well-known St
Louisinvestment banker, helped set him up in business
in New York with AverillHarriman, the wealthy son of
railroad magnate E H Harriman in New York,who had gone
into banking.
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One of the first jobs Walker gave Bush was
tomanage UBC. Bush was a founding member of the bank
and the incorporationdocuments, which list him as one
of seven directors, show he owned oneshare in UBC
worth $125.
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The bank was set up by Harriman and
Bush’sfather-in-law to provide a US bank for the
Thyssens, Germany’s mostpowerful industrial family.
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August Thyssen, the founder of the dynasty
hadbeen a major contributor to Germany’s first world
war effort and in the1920s, he and his sons Fritz and
Heinrich established a network ofoverseas banks and
companies so their assets and money could be
whiskedoffshore if threatened again.
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By the time Fritz Thyssen inherited the
businessempire in 1926, Germany’s economic recovery
was faltering. After hearingAdolf Hitler speak,
Thyssen became mesmerised by the young firebrand.
Hejoined the Nazi party in December 1931 and admits
backing Hitler in hisautobiography, I Paid Hitler,
when the National Socialists were still aradical
fringe party. He stepped in several times to bail out
thestruggling party: in 1928 Thyssen had bought the
Barlow Palace onBriennerstrasse, in Munich, which
Hitler converted into the Brown House,the headquarters
of the Nazi party. The money came from another
Thyssenoverseas institution, the Bank voor Handel en
Scheepvarrt in Rotterdam.
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By the late 1930s, Brown Brothers Harriman,
whichclaimed to be the world’s largest private
investment bank, and UBC hadbought and shipped
millions of dollars of gold, fuel, steel, coal and
UStreasury bonds to Germany, both feeding and
financing Hitler’s build-upto war.
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Between 1931 and 1933 UBC bought more than
$8mworth of gold, of which $3m was shipped abroad.
According to documentsseen by the Guardian, after UBC
was set up it transferred $2m to BBHaccounts and
between 1924 and 1940 the assets of UBC hovered around
$3m,dropping to $1m only on a few occasions.
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In 1941, Thyssen fled Germany after falling
outwith Hitler but he was captured in France and
detained for the remainderof the war.
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There was nothing illegal in doing business
withthe Thyssens throughout the 1930s and many of
America’s best-knownbusiness names invested heavily in
the German economic recovery. However,everything
changed after Germany invaded Poland in 1939. Even
then itcould be argued that BBH was within its rights
continuing businessrelations with the Thyssens until
the end of 1941 as the US was stilltechnically neutral
until the attack on Pearl Harbor. The trouble
startedon 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 purchaseshad
raised suspicions that the bank was in fact a “secret
nestegg” hidden in New York for Thyssen and other Nazi
bigwigs. TheAlien Property Commission (APC) launched
an investigation.
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There is no dispute over the fact that the
USgovernment seized a string of assets controlled by
BBH – including UBCand 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
ownthese companies on paper.
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Erwin May, a treasury attache and officer for
thedepartment of investigation in the APC, was
assigned to look into UBC’sbusiness. The first fact to
emerge was that Roland Harriman, PrescottBush and the
other directors didn’t actually own their shares in
UBC butmerely held them on behalf of Bank voor Handel.
Strangely, no one seemedto know who owned the
Rotterdam-based bank, including UBC’s president.
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May wrote in his report of August 16
1941:”Union Banking Corporation, incorporated August 4
1924, is whollyowned by the Bank voor Handel en
Scheepvaart N.V of Rotterdam, theNetherlands. My
investigation has produced no evidence as to
theownership of the Dutch bank. Mr Cornelis [sic]
Lievense, president ofUBC, claims no knowledge as to
the ownership of the Bank voor Handel butbelieves it
possible that Baron Heinrich Thyssen, brother of
FritzThyssen, may own a substantial interest.”
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May cleared the bank of holding a golden nest
eggfor the Nazi leaders but went on to describe a
network of companiesspreading out from UBC across
Europe, America and Canada, and how moneyfrom voor
Handel travelled to these companies through UBC.
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By September May had traced the origins of
thenon-American board members and found that Dutchman
HJ Kouwenhoven – whomet with Harriman in 1924 to set
up UBC – had several other jobs: inaddition to being
the managing director of voor Handel he was also
thedirector of the August Thyssen bank in Berlin and a
director of FritzThyssen’s Union Steel Works, the
holding company that controlledThyssen’s steel and
coal mine empire in Germany.
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Within a few weeks, Homer Jones, the chief of
theAPC investigation and research division sent a memo
to the executivecommittee of APC recommending the US
government vest UBC and its assets.Jones named the
directors of the bank in the memo, including
PrescottBush’s name, and wrote: “Said stock is held by
the above namedindividuals, 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 outare therefore beneficially
owned and help for the interests of enemynationals,
and are vestible by the APC,” according to the memo
fromthe National Archives seen by the Guardian.
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Red-handed
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Jones recommended that the assets be
liquidatedfor the benefit of the government, but
instead UBC was maintained intactand eventually
returned to the American shareholders after the war.
Someclaim that Bush sold his share in UBC after the
war for $1.5m – a hugeamount of money at the time –
but there is no documentary evidence tosupport this
claim. No further action was ever taken nor was
theinvestigation continued, despite the fact UBC was
caught red-handedoperating a American shell company
for the Thyssen family eight monthsafter America had
entered the war and that this was the bank that
hadpartly financed Hitler’s rise to power.
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The most tantalising part of the story
remainsshrouded in mystery: the connection, if any,
between Prescott Bush,Thyssen, Consolidated Silesian
Steel Company (CSSC) and Auschwitz.
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Thyssen’s partner in United Steel Works, which
hadcoal 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.
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Flick’s plants in Poland made heavy use of
slavelabour from the concentration camps in Poland.
According to a New YorkTimes article published in
March 18 1934 Flick owned two-thirds of CSSCwhile
“American interests” held the rest.
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The US National Archive documents show that
BBH’sinvolvement with CSSC was more than simply
holding the shares in themid-1930s. Bush’s friend and
fellow “bonesman” Knight Woolley,another partner at
BBH, wrote to Averill Harriman in January 1933
warningof problems with CSSC after the Poles started
their drive to nationalisethe plant. “The Consolidated
Silesian Steel Company situation hasbecome
increasingly complicated, and I have accordingly
brought inSullivan and Cromwell, in order to be sure
that our interests areprotected,” wrote Knight. “After
studying the situation FosterDulles is insisting that
their man in Berlin get into the picture andobtain the
information which the directors here should have. You
willrecall that Foster is a director and he is
particularly anxious to becertain that there is no
liability attaching to the Americandirectors.”
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But the ownership of the CSSC between 1939
whenthe Germans invaded Poland and 1942 when the US
government vested UBC andSAC is not clear.
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“SAC held coal mines and definitely ownedCSSC
between 1934 and 1935, but when SAC was vested there
was no trace ofCSSC. All concrete evidence of its
ownership disappears after 1935 andthere are only a
few traces in 1938 and 1939,” says Eva Schweitzer,the
journalist and author whose book, America and the
Holocaust, ispublished next month.
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Silesia was quickly made part of the German
Reichafter 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 USto at least sit out the war as a
neutral country. Schweitzer saysAmerican interests
were dealt with on a case-by-case basis. The
Nazisbought some out, but not others.
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The two Holocaust survivors suing the
USgovernment and the Bush family for a total of $40bn
in compensation claimboth materially benefited from
Auschwitz slave labour during the secondworld war.
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Kurt Julius Goldstein, 87, and Peter Gingold,
85,began a class action in America in 2001, but the
case was thrown out byJudge Rosemary Collier on the
grounds that the government cannot be heldliable under
the principle of “state sovereignty”.
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Jan Lissmann, one of the lawyers for
thesurvivors, said: “President Bush withdrew President
Bill Clinton’ssignature from the treaty [that founded
the court] not only to protectAmericans, but also to
protect himself and his family.”
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Lissmann argues that genocide-related cases
arecovered by international law, which does hold
governments accountable fortheir actions. He claims
the ruling was invalid as no hearing took place.
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In their claims, Mr Goldstein and Mr
Gingold,honorary chairman of the League of
Anti-fascists, suggest the Americanswere aware of what
was happening at Auschwitz and should have bombed
thecamp.
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The lawyers also filed a motion in The
Hagueasking for an opinion on whether state
sovereignty is a valid reason forrefusing to hear
their case. A ruling is expected within a month.
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The petition to The Hague states: “From
April1944 on, the American Air Force could have
destroyed the camp with airraids, as well as the
railway bridges and railway lines from Hungary
toAuschwitz. The murder of about 400,000 Hungarian
Holocaust victims couldhave been prevented.”
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The case is built around a January 22
1944executive order signed by President Franklin
Roosevelt calling on thegovernment to take all
measures to rescue the European Jews. The lawyersclaim
the order was ignored because of pressure brought by a
group of bigAmerican companies, including BBH, where
Prescott Bush was a director.
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Lissmann said: “If we have a positive
rulingfrom the court it will cause [president] Bush
huge problems and make himpersonally liable to pay
compensation.”
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The US government and the Bush family deny all
theclaims against them.
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In addition to Eva Schweitzer’s book, two
otherbooks are about to be published that raise the
subject of Prescott Bush’sbusiness history. The author
of the second book, to be published nextyear, John
Loftus, is a former US attorney who prosecuted Nazi
warcriminals in the 70s. Now living in St Petersburg,
Florida and earninghis living as a security
commentator for Fox News and ABC radio, Loftusis
working on a novel which uses some of the material he
has uncovered onBush. Loftus stressed that what
Prescott Bush was involved in was justwhat many other
American and British businessmen were doing at the
time.
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“You can’t blame Bush for what hisgrandfather
did any more than you can blame Jack Kennedy for what
hisfather 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 doesthat have
implications for us today?” he said.
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“This was the mechanism by which Hitler
wasfunded to come to power, this was the mechanism by
which the ThirdReich’s defence industry was re-armed,
this was the mechanism by whichNazi profits were
repatriated back to the American owners, this was
themechanism by which investigations into the
financial laundering of theThird Reich were blunted,”
said Loftus, who is vice-chairman of theHolocaust
Museum in St Petersburg.
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“The Union Banking Corporation was a
holdingcompany for the Nazis, for Fritz Thyssen,” said
Loftus. “Atvarious times, the Bush family has tried to
spin it, saying they wereowned by a Dutch bank and it
wasn’t until the Nazis took over Hollandthat they
realised that now the Nazis controlled the apparent
company andthat is why the Bush supporters claim when
the war was over they gottheir money back. Both the
American treasury investigations and theintelligence
investigations in Europe completely bely that, it’s
absolutehorseshit. They always knew who theultimate
beneficiaries were.”
“There is no one leftalive who could be
prosecuted but they did get away with it,” saidLoftus.
“As a former federal prosecutor, I would make a case
forPrescott Bush, his father-in-law (George Walker)
and Averill Harriman [tobe prosecuted] for giving aid
and comfort to the enemy. They remainedon the boards
of these companies knowing that they were of
financialbenefit to the nation of Germany.”
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Loftus said Prescott Bush must have been aware
ofwhat was happening in Germany at the time. “My take
on him wasthat he was a not terribly successful in-law
who did what Herbert Walkertold him to. Walker and
Harriman were thetwo evil geniuses, they didn’t care
about the Nazis any more than theycared about their
investments with the Bolsheviks.”
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What is also at issue is how much money Bush
madefrom his involvement. His supporters suggest that
he had one token share.Loftus disputes this, citing
sources in “the banking andintelligence communities”
and suggesting that the Bush family,through George
Herbert Walker and Prescott, got $1.5m out of
theinvolvement. There is, however, no paper trail to
this sum.
The third person going into print on the
subjectis John Buchanan, 54, a Miami-based magazine
journalist who startedexamining the files while
working on a screenplay. Last year, Buchananpublished
his findings in the venerable but small-circulation
NewHampshire Gazette under the headline “Documents in
National ArchivesProve George Bush’s Grandfather
Traded With the Nazis – Even After PearlHarbor”. He
expands on this in his book to be published next month
-Fixing America: Breaking the Stranglehold of
Corporate Rule, Big Mediaand the Religious Right.
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In the article, Buchanan, who has worked mainly
inthe trade and music press with a spell as a
muckraking reporter in Miami,claimed that “the
essential facts have appeared on the internet andin
relatively obscure books but were dismissed by the
media and Bushfamily as undocumented diatribes”.
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Buchanan suffers from hypermania, a form of
manicdepression, and when he found himself rebuffed in
his initial efforts tointerest the media, he responded
with a series of threats against thejournalists 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
hiscalls returned. Most seriously, he faced aggravated
stalking charges inMiami, in connection with a man
with whom he had fallen out over the bestway to
publicise his findings. The charges were dropped last
month.
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Biography
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Buchanan said he regretted his behaviour
haddamaged his credibility but his main aim was to
secure publicity for thestory. Both Loftus and
Schweitzer say Buchanan has come up withpreviously
undisclosed documentation.
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The Bush family have largely responded with
nocomment to any reference to Prescott Bush. Brown
Brothers Harriman alsodeclined to comment.
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The Bush family recently approved a
flatteringbiography of Prescott Bush entitled Duty,
Honour, Country by MickeyHerskowitz. The publishers,
Rutledge Hill Press, promised the book would”deal
honestly with Prescott Bush’s alleged business
relationshipswith Nazi industrialists and other
accusations”.
In fact, the allegations are dealt with in
lessthan two pages. The book refers to the
Herald-Tribune story by sayingthat “a person of less
established ethics would have panicked …Bush and his
partners at Brown Brothers Harriman informed the
governmentregulators that the account, opened in the
late 1930s, was ‘an unpaidcourtesy for a client’ …
Prescott Bush acted quickly and openly onbehalf of the
firm, served well by a reputation that had never
beencompromised. He made available all records and all
documents. Viewed sixdecades later in the era of
serial corporate scandals and shatteredcareers, he
received what can be viewed as the ultimate clean
bill.”
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The Prescott Bush story has been condemned by
bothconservatives and some liberals as having nothing
to do with the currentpresident. It has also been
suggested that Prescott Bush had little to dowith
Averill Harriman and that the two men opposed each
otherpolitically.
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However, documents from the Harriman
papersinclude a flattering wartime profile of Harriman
in the New York JournalAmerican and next to it in the
files is a letter to the financial editorof that paper
from Prescott Bush congratulating the paper for
running theprofile. He added that Harriman’s
“performance and his wholeattitude has been a source
of inspiration and pride to his partners andhis
friends”.
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The Anti-Defamation League in the US is
supportiveof Prescott Bush and the Bush family. In a
statement last year they saidthat “rumours about the
alleged Nazi ‘ties’ of the late PrescottBush … have
circulated widely through the internet in recent
years.These charges are untenable and politically
motivated … Prescott Bushwas neither a Nazi nor a
Nazi sympathiser.”
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However, one of the country’s oldest
Jewishpublications, the Jewish Advocate, has aired the
controversy in detail.
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More than 60 years after Prescott Bush
camebriefly under scrutiny at the time of a faraway
war, his grandson isfacing a different kind of
scrutiny but one underpinned by the sameperception
that, for some people, war can be a profitable
business. ###
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