Blessing also joined various Nazi-sponsored businessmen’s and German “patriotic” organizations at least as early as 1934, then joined the Nazi party in 1937. Schacht appointed him the youngest full director of the Reichsbank in that organization’s history.20
When Schacht and Hitler had their falling out in 1938 over mechanisms for financing German war production, Schacht left the chairmanship of the Reichsbank to become Minister Without Portfolio in Hitler’s government. He engineered Karl Blessing’s appointment to several private banking posts and to a directorship of Margarine Union AG, the German branch of Unilever. Blessing served as Margarine Union’s finance director in Berlin between 1939 and 1941, a post that was roughly equivalent to that of a German-government-appointed trustee for the company’s property, given the wartime regulations that were then in effect.21 From there, Blessing began participation in what many people would consider to be highly visible, criminal, corporate enterprises. He never was the “lowly clerk” that he told the New York Times. Instead, he helped organize Kontinentale Öl AG, and served on its board of directors and senior management team for the remainder of the war.22
Kontinentale Öl was for the strategically crucial petroleum industry what Hermann Goering’s combine was to German weapons production: a government-licensed monopoly used by the Nazis to seize control of hundreds of companies in the territories overrun by German troops, particularly on the Eastern Front.23 Under Blessing’s leadership, Kontinentale Öl became an archetypical German corporation of the Hitler era, with all of the complexities and contradictions that entailed.
Throughout the 1930s, Germany’s oil production had been coordinated through the state’s oil ministry and through private cartel agreements, and the main German companies in the industry had remained privately owned. When war broke out, the first question for these companies was how to keep Eastern Europe’s oilfields and production properties in private hands, rather than losing them to the SS (which had already begun building its own economic empire) or to Goering’s Ministry for the Four Year Plan. Their second question was who among them was to enjoy the choicest spoils from the occupied countries.
Kontinentale Öl was the solution. The four largest German oil companies and IG Farben jointly created Konti as a new petroleum monopoly for Eastern Europe. The company enjoyed German government sponsorship, exclusive production contracts, and first claim on any petroleum-related properties in the Nazi-occupied territories, particularly those seized from Jews, Poles, or the USSR. The corporation paid 7.5 percent royalties on the petroleum to the Reich; all remaining profits from the operation were divided among the companies that had bankrolled Konti in the first place.24
Kontinentale Öl became one of the largest single exploiters of concentration camp labor, Jewish ghetto labor, and prison labor in history. According to International Red Cross records, Konti and its network of subsidiary companies maintained their own concentration camps for Jews at Boryslaw (1942–1944), Drohobycz (1942–1944), Iwonicz (1943–1944), Jaslo (1943), Lublin (1941–1943), Moderowka (1942–1944), Opary (1943), Stryj (1941–1944), Truskawiec (1943–1944), and Ugarsthal (1942–1944). It is quite likely that there were other such Konti operations as well in Nazi-occupied Poland and the Ukraine.25 The prisoners did the crushing construction labor needed to reopen roads and oilfields sabotaged during the Soviet retreat, to lay pipelines to Wehrmacht supply centers, and to build—and then later destroy—new petroleum sites in areas under Nazi control.
Konti “leased” most of its personnel from the SS. The texts of several such SS-Konti agreements have survived, and one was entered into evidence at Nuremberg. “Jewish laborers will not receive any payment in cash,” reads one 1942 SS-Konti note concerning exploitation of concentration camp inmates in the Ukraine. “The factory administrations will pay to the SS and the Pol. L. Galicia [German police administration in the Ukraine] for each Jewish laborer per calendar day and shift 5 Zloty a man, 4 Zloty a woman”—the equivalent of a few pennies per worker.26 The system was orderly enough: Payments for inmates were to be delivered to the SS by the third day of each month; the punishment for prisoners damaging Konti property was death; and the SS quickly disposed of bodies.
No one knows how many inmates died working at Konti, though hard-labor camps of this type typically killed a third to a half of their inmates every six months through overwork, exposure, and disease.27 Some sense of the death toll can be gleaned from the fact that SS spokesmen at the Wannsee conference contended that construction labor on the Eastern Front should become one of the main vehicles for wiping out every living Jew in Europe.28
Karl Blessing exercised special responsibilities for the company’s financial affairs and its relations with German banks.29 He could hardly have been ignorant of the character of the company he helped lead, considering his active participation in Konti’s acquisition of looted properties in the East and his oversight of the company’s payroll, which consisted in large part of payments to the SS for concentration camp labor. Even Konti’s corporate offices in Berlin, where Blessing worked, were built with concentration camp labor.30
Much of this was known as early as the summer of 1945. Blessing’s service as a director of Kontinentale Öl was widely noted in German biographical dictionaries, business magazines, and the like. Though many details of Konti’s activities in the East remained to be filled in, the essential facts—that this oil monopoly had been created through looting and fed on forced labor—were readily available. Two of Blessing’s colleagues from Konti’s board—Walther Funk, of the Reichsbank and BIS, and Heinrich Butefisch, of IG Farben’s Auschwitz complex—were even about to be put on trial for war crimes and crimes against humanity.
Nevertheless, with Allen Dulles’s assistance, new respectability seemed to sparkle around Karl Blessing from the summer of 1945 on and cling to him as he climbed higher in corporate ranks. Dulles’s de facto clearance became instrumental in Blessing’s return to a variety of German government advisory commissions and corporate directorships, including the board of Unilever, where Blessing eventually served on the company’s international board of directors and as chairman of its German subsidiary. (Blessing became one of the highest-paid business executives in the world, Fortune magazine gushed after the war, with an annual salary equivalent to $75,000.31) Blessing then stepped up to become chairman of West Germany’s central bank, and by the early 1960s, he was by any measure among the most powerful men in Germany and, indeed, the world.32
By the time he retired to the Rhône Valley in 1970, Karl Blessing had emerged in his own stories and in the press as virtually an anti-Nazi Resistance hero.*33 The prestige media in the U.S. and Europe seem to have convinced themselves that a man as sensible, respected, and well dressed as Blessing could not have committed serious crimes during the Nazi years. So far as can be determined, there were no substantial public discussions during Blessing’s career about his membership in the Nazi party, his work for Konti, or Konti’s activities in the East.
The heart of the matter is that Karl Blessing was willing to traffic in the lives of Jewish concentration camp inmates in order to maintain his corporate position and social status in Nazi Germany. He had three basic choices during Hitler’s last years: He could resist Kontinentale Öl’s role in the systematic murder of camp inmates; he could withdraw from his compromising activities without directly challenging them; or he could continue to advance his career by guiding Konti’s fortunes in the East with the skill and administrative acumen for which he had come to be known. He chose the third path.
By any reasonable standard, this decision made Blessing as complicit in crimes against humanity as were, say, the members of the corporate board of IG Farben. (Indeed, the Farben representative on Konti’s board, Heinrich Butefisch, was eventually tried and convicted for procuring slave labor for the construction of the IG’s synthetic oil facilities at Auschwitz.)34 Yet Blessing managed to escape the opprobrium heaped on the IG board during the first few years after the w
ar, thanks mainly to Allen Dulles’s intervention and to the fact that Kontinentale Öl had a somewhat lower public profile than did the internationally known IG Farben. Once the first round of war crimes prosecutions had passed, Blessing was home free. By the 1950s, his service to the Third Reich at Kontinentale Öl was widely perceived as an asset to his career.
The U.S. government’s policy on the prosecution of war crimes, quislings, and collaborators was meanwhile developing out of the political battles among various factions spread through the bureaucracy—not through formal consensus on policy within any single committee or commission. The various centers within the government fought secretly among themselves, often going to considerable lengths to keep their disagreements out of the public eye. Rival bureaucratic centers that claimed loyalty to the same broadly worded general policies sometimes proceeded in day-to-day work with radically different agendas. This infighting became particularly pronounced in prosecutions of German industrialists and business leaders, since there were intense philosophical and ideological differences within the government concerning the culpability of these people.
While the U.S. team at the International Military Tribunal at Nuremberg was prosecuting Blessing’s longtime mentor Hjalmar Schacht, for example, the legal advisor’s office at the State Department was quietly helping in Schacht’s defense. The heart of the prosecution’s argument was that Schacht had been instrumental in bringing Hitler to power, in providing legitimacy and stability to his regime during its first decade, in the clandestine rearmament of Germany, and in early anti-Semitic initiatives. Schacht also served the Nazi regime as Reichsbank director and minister of economics. Prosecutors contended that these acts, taken together, showed that Schacht participated in a Nazi conspiracy to initiate an aggressive war. Schacht’s later political split with Hitler might be a mitigating factor, said prosecutors, but it did not change what he had done for the regime when he had been a part of it.35
Meanwhile, though, the State Department helped drum up support for Schacht’s defense by tracking down witnesses and interviewing U.S. intelligence agents who might have evidence that reflected favorably on the imprisoned banker. Of course, an argument can be made that the State Department had an obligation to bring forward exculpatory evidence concerning Schacht or any other defendant. But in this case, State’s legal advisor Hackworth went well beyond simply bringing forward evidence. Hackworth sought out new defense witnesses, screened them, arranged transportation and scheduling on their behalf, and became a behind-the-scenes advocate for Schacht.36 These actions demonstrated the depth of the split between U.S. war crimes prosecutors and other sectors of the U.S. government, even at the height of the government’s public commitment to harsh punishment for German officials.
State dispatched messages seeking support for Schacht to the U.S. consul in Zurich, Sam Woods—long one of the most important U.S. back-channel conduits to the German economic elite—and to Hans Gisevius, a leader of the tiny nationalist-conservative wing of the German Resistance, who had been an important member of Allen Dulles’s intelligence network during the war.37 Gisevius was still working full-time for U.S. intelligence in the winter of 1945, and both he and Woods proved eager to work on Schacht’s behalf. The State Department engaged yet another of Dulles’s wartime agents, the former Axis Romanian ambassador Gregoire Gafencu, to write memoirs that stressed that Germany had been drawn into the war against its will, or at least against the choice of men like Schacht and the German foreign service bureaucracy, who had opposed war with the Soviets.38 This went directly to the issue of whether there had been a “conspiracy” to wage aggressive war.
Meanwhile, Robert Jackson’s prosecutorial staff at Nuremberg was split over the issue of whether to bring Schacht to trial at all. The U.S. hardliners favored prosecution, as did Jackson himself. But Jackson’s most senior deputy, former OSS chief William Donovan, strongly opposed a trial. Donovan argued that Schacht had been secretly sympathetic to the Western Allies early in the war, and that a tough cross-examination of Schacht on the witness stand would undermine pro-U.S. factions among Germany’s business and financial elite.39 Jackson, however, found himself hemmed in by his commitments to French and Soviet prosecutors, who strongly favored trying Schacht, and he went ahead with the prosecution. Donovan then resigned over this and related disputes with Jackson, but not before convincing the prosecutor to sharply restrict his public cross-examination of Schacht. At the trial, Jackson’s self-imposed limits on his interrogation of the banker cut the heart out of his case. The International Military Tribunal eventually acquitted Schacht, but only after protracted debate in chambers, a close vote, and public protests by the Soviet judge.
In this case, as in others, the split within the U.S. government was not over the facts of Schacht’s career, which were mainly a matter of public record. It was instead a political dispute, rooted in differing appraisals of the extent of the German business elite’s culpability for the actions of Hitler’s state and their responsibility for the actions of the institutions they led. Schacht’s case became the focal point for the ongoing debate over the role of private enterprises in public society—a dispute that in one way or another has been at center stage in American politics for most of this century.
When Western intellectuals looked east during the cold war, they often found examples of Communist states employing ideology and rhetoric to separate the Soviet government from its more odious activities. Stalin never publicly discussed mass murder, Western scholars pointed out. He spoke instead of class struggle and of eliminating the kulaks as a class,40 and in doing so diffused his responsibility for their fate. The fact that the Western press indulged in similar historical revisionism concerning Kontinentale Öl suggests that self-delusions about mass crimes sometimes take root in democratic societies as well. How would it be possible for the New York Times and Fortune to write about Konti’s wartime business without considering that most of the company’s assets had been looted from Nazi-occupied countries and that its laborers had worked at gunpoint? Discussion of Konti apart from such facts required either ignorance (which the Western media does not claim) or, more likely, the internalization of a powerful ideological framework that assumes that institutional leaders such as Blessing should be separated from responsibility for their companies’ actions.
Karl Blessing’s complicity in genocide was not as direct as that of the SS generals who led extermination squads. But he was an unusually talented man, and he had powerful friends, an enterprising personality, and an absolute commitment to the prosperity of German business. Those traits enabled him to prosper as a young executive under Hitler. They brought him to Schacht’s attention and, in time, into contact with his counterparts at the Bank for International Settlements and in Western foreign policy and financial circles. After the war was over, the Allied leaders who were struggling with the day-to-day problems of managing Germany turned once again to Karl Blessing.
Just as with the Schmidt brothers, basic questions remained: Under what circumstances does offering amnesty to former Nazis such as Blessing avoid a greater evil? Who is to make those determinations, and on what grounds?
Robert Murphy and Allen Dulles believed they knew the answer. Such decisions should be left to competent governmental authorities, operating within a moral framework and motivated by a sincere sense of U.S. national security and national interest—themselves, for example. Murphy and Dulles repeatedly reached secret verdicts they believed necessary to construct a postwar order that fit their idea of progress, and they reached them with a clear conscience.
As early as the summer of 1945, Murphy was willing to defy U.S. treaty obligations concerning high-ranking Nazis and Axis collaborators when he regarded it in the U.S. interest to do so. Shortly after the German collapse, for example, Tito’s government in Yugoslavia wished to try as a war criminal Miklós Horthy, who had been royal regent of Hungary and supreme commander of Hungary’s armed forces during its years of alliance with Nazi Germany. H
orthy also shared personal responsibility for establishing Hungary’s anti-Semitic race laws and other persecutory measures. The Yugoslavs had suffered invasions and massacres at Hungary’s hands during Horthy’s regime, and they felt justified in bringing formal charges against him to the UNWCC.41 According to their agreements with the U.S., they seemed to have legal authority to prosecute him in Yugoslav courts.42
The postwar (pre-Communist) Czech government of Jan Masaryk agreed. The “Czech cabinet on September 25 [1945] declared ex-Regent Horthy a war criminal.… [President] Masaryk took a serious view of Horthy’s activities, characterizing them as aggression and invasion of Czech lands, persecution of Jews, responsibility for cruelties, ill treatment and executions of Czech citizens, destruction of property and forcing Czech citizens into the Hungarian Army,” according to a U.S. diplomatic report.43 The Czechs also brought charges against Horthy.
But Horthy, as will be seen, was not a typical war criminal.
* The fact is that much of the intelligence Dulles provided to OSS headquarters was poor, as were his evaluations of German bankers. True, Allen Dulles and the Bern station provided more than their fair share of intelligence scoops during the war, including the famous KAPPA documents that Fritz Kolbe smuggled out of the German Foreign Ministry. But in January 1944, Washington cabled to Dulles that “We think it is essential that you be informed at once that almost the entire material [you] supplied disagrees with reports we have received originating with other sources, and parts of it were months old.… [There has been] degeneration of your information which is now given a lower rating than any other source. This seems to indicate a need for using the greatest care in checking all your sources.…” Or again: “The Bern estimate [of German military forces] is most inaccurate and misleading. It contains grievous errors regarding locations and also includes reports on non-existent divisions.… Only 30 of the divisions reported located in the west are correctly identified […] The remaining divisions are either incorrectly located or do not exist. In more than 50 instances, the classification of divisions by type is wrong …” Dulles’s intelligence on the German war in the East was even worse, an internal OSS evaluation found. Even the war diaries of the OSS, which tend to highlight every aspect of the organization’s achievements, found that much of the military intelligence the Bern station provided was “outdated” and of “minor interest.”
The Splendid Blond Beast Page 27
