The Splendid Blond Beast

by Simpson, Christopher; Miller, Mark Crispin;

  General Clay used the case of Deutsche Bank director Hermann Abs to explain this concept. “We were never able to make Hermann Abs the financial minister [of Germany] as we would have,” Clay remembered in the same interview quoted earlier, because of the German and American public’s refusal to accept a man who had been so deeply compromised during the Hitler years. But not to worry, Clay continued. “We were able to finally put him in charge of the Reconstruction Finance Corporation, which was somewhat outside of government,” and which was instrumental in distribution of Marshall Plan funds for Germany.35

  Sponsors of the Committee for the Marshall Plan were simultaneously at the cutting edge of renewed efforts to invest in German industry. “If you have been trying unsuccessfully to get to Germany to reestablish prewar business contacts, don’t be discouraged,” Business Week told its readers early in 1947. “You can expect [a] program for reviving business in western Germany to be pushed by all U.S. factions … Republican backing was assured when John Foster Dulles, Republican spokesman, recently called for the revival of business in Germany and western Europe whatever the price. German goods are already trickling into the U.S. market. Anticipating some consumer resistance [in the U.S.], Military Government authorities have shrewdly met customs requirements by marking them: ‘Made in Germany, U.S. Zone.’ … Before large-scale arrivals of German goods begin, Washington is likely to release a press barrage explaining that German exports help pay [U.S.] occupation costs in Germany.”36

  Shortly after its founding, the Committee for the Marshall Plan placed full-page advertisements in the most influential U.S. newspapers; sent thousands of personally addressed telegrams signed by the former secretary of war, Henry L. Stimson, to businessmen asking for their donations and political support; and made a mass mailing to hundreds of thousands of U.S. “opinion leaders” in the upper strata of business, media, labor, and social organizations. The group chartered Marshall Plan clubs in a dozen cities, opened business offices in New York and Washington, and initiated a series of heavily publicized meetings between President Truman and business leaders designed to convey the impression of broad popular support for the Marshall Plan. As Congressman Charles Plumley (a Republican from Vermont) put it, “There has never been so much propaganda in the whole history of the nation as there has been for the Marshall Plan.” The campaign created an “overwhelming conviction among the American people and among members of Congress that we must have the Marshall Plan right now,” he continued.37

  The claim of “overwhelming support” was, in fact, overblown. Public opinion polls of the period indicate that about 65 percent of the U.S. population either opposed the Marshall Plan or did not know what it was.38 Even so, the Marshall Plan passed the Congress by a large margin. The plan’s sponsors used the relatively broad, popular support for doing something constructive about Europe as a means of putting through the distinctly unpopular idea of reestablishing the German economic elite.

  These factors—insiders’ opposition to reform, the passive resistance of German business, Allied suppression of indigenous Antifa radicals, the sheer magnitude of the task of denazification, the self-mobilization of U.S. and international business elites, and an often paranoid geopolitical competition with the USSR—combined with other factors to stall denazification and reform of the German business structure by the summer of 1945. Within three years they had shut it down altogether.

  19

  The End of the War Crimes Commission

  Originally, a second international trial at Nuremberg was to focus primarily on the activities of German finance and industry during the Third Reich. The “industrialists trial,” as it was called at the time, was widely regarded as of equal importance to the prosecution of the Nazi and SS high command. Hermann Abs and other major bankers were important targets, at least judging from the recommendations made by U.S. war crimes investigators at the time.1

  But Justice Jackson vetoed this plan, declaring in the autumn of 1945 that the United States would refuse to participate in any further international trials of German defendants and would instead hold separate prosecutions on its own. These trials became the “Subsequent Proceedings” organized under the leadership of General Telford Taylor. His group brought twelve cases against a total of 182 defendants; these were the famous trials that judged Einsatzgruppen murder squads, concentration camp doctors, business executives from Krupp and IG Farben, Nazi judges, and similar defendants.2 U.S. military commissions tried additional 950 war crimes defendants, though that figure includes cases in the Far East in addition to Europe. The majority of cases tried before U.S. military commissions involved German civilians who had murdered downed U.S. pilots.3

  Yet these trials, as important as they were, were very much “symbolic measures,” as Taylor commented in a recent interview, and were designed to teach Germany and the world a lesson about the crimes of the Hitler dictatorship.4 They succeeded brilliantly in that mission. The record of Nazi crimes compiled by Taylor’s team remains to this day the single most important source of information and documentation ever assembled.

  But these proceedings were not, and were not intended to be, an effort to prosecute the power structure of Nazi Germany as such; nor were they an effort to remove the German “ruling class” (to use Kennan’s phrase) that had operated during the Hitler years from its position in postwar society. The Subsequent Proceedings were in many respects a rear-guard action by the hard-line anti-Nazi wing of the U.S. government, which was already in retreat. Washington hobbled the prosecutions with budgetary restrictions, and some U.S. agencies in Berlin tacitly refused cooperation, particularly during trials of German industrialists. Taylor’s three U.S. trials of industrialists lasted slightly more than a year altogether, resulting in nineteen convictions and fourteen acquittals. The U.S. judges tended to be hostile to the prosecution, particularly in the Friedrich Flick case. The court “was apparently unable to feel that offenses by industrialists fell into as severe a category as when committed by a common man,” as noted legal historian John Alan Appleman put it.5

  Flick’s successful defense depended directly on the social dynamics of international law and of genocide. Flick beat all but one of the slave labor and plunder charges, because three prominent U.S. judges concluded that the director and owner of a corporation should not be held accountable for slavery and looting by his companies, unless the prosecution could prove that he personally ordered each particular crime to be carried out. Without proof of that type, every bit of ambiguous evidence had to be interpreted by the court in favor of the individual defendants, namely Flick and his circle of executives.

  Worse, the Flick case established a legal precedent for a corporate defense of “necessity”—a close cousin to the defense of acting under orders—that went beyond even what Flick had argued on his own behalf and that contradicted many aspects of the earlier ruling on this issue by the International Military Tribunal.6 Amazingly, the legal precedent left by this series of trials seems to be that a nineteen-year-old draftee accused of war crimes cannot successfully plead that he was acting under orders, but the owners and directors of multi-billion-dollar companies can.

  The U.S. government cut off funding for the prosecution staff at Nuremberg in mid-1948, bringing the Subsequent Proceedings to an abrupt end. The staff abandoned pending investigations and potential prosecutions, sometimes with little more than a note to the files indicating the case had been closed. Less than two and a half years after that, the new U.S. high commissioner for Germany, John McCloy, granted clemency to every single industrialist who had been convicted at Nuremberg.7

  In the end, neither the “Treasury” nor the “State” factions of the wartime U.S. government fully achieved the goals they had sought during the war. Many of the State Department’s specialists in German affairs and international law went on to long careers at State, serving in influential posts involving U.S. policy toward Europe and the USSR until well into the 1960s. Herbert Pell’s archrival Green Ha
ckworth ended up as president of the International Court of Justice at The Hague.8 As Secretary of Defense, Dillon, Read’s James Forrestal oversaw much of the birth of the postwar military-industrial complex and the dramatic shift in U.S. relations with the USSR. He committed suicide in 1949 during a paranoid nervous breakdown during which, his biographers tell us, he believed he was pursued by a vast conspiracy of Communists and Jews.9 William Draper went on from Germany to become assistant secretary of the army, where he dismantled the antitrust campaign against Japanese multinational companies that had been instituted in Tokyo by General MacArthur.10

  Many lawyers and economists from Henry Morgenthau’s team at Treasury went on to serve a year or two in the U.S. occupation government in Germany, some of them on Telford Taylor’s war crimes prosecution staff. Some found themselves tarred by Senator Joseph McCarthy’s brush when a dubious spy scandal erupted involving former Morgenthau aide Harry Dexter White. Secretary Morgenthau went on to serve as chairman of the United Jewish Appeal and as chairman of the board of the American Financial and Development Corporation for Israel.11

  Herbert Pell attempted to reverse U.S. policy in Germany after he left the government, but after a few years, he returned to a life of travel and as a patron of the arts. He died in 1961. His son, Claiborne, whose wedding Herbert was attending at the time he was fired, went on to become a prominent U.S. senator and, eventually, chair of the Senate Foreign Relations Committee.12

  The German economic elite and corporations that had been active under Hitler have continued, for the most part, though without the Nazi rhetoric and police state powers of the Nazi period. There were of course generational changes in the leadership of German companies in the years following the war, and other reforms took place in response to pressure from German unions and international competition.13 But the fundamental pattern in German finance and industry has been continuity and stability. Regardless of how one views the U.S. decision to step back from prosecution of the German economic elite, it is evident that the U.S. policy necessarily entailed an amnesty for much of what German business had done during the Holocaust.

  There are to this day unresolved war crimes charges against prominent German business leaders that were brought before the UNWCC and other international bodies by governments as varied as the Netherlands, France, Poland, and Yugoslavia.14 Jewish efforts to extract even modest restitution payments for work performed by concentration camp inmates for prominent companies such as Messerschmitt, Ernst Heinkel, and others continue to be rejected by those corporations. The same is true of German construction companies such as Philipp Holzmann, which has repeatedly been identified by survivors as a major beneficiary of forced labor. Holzmann refuses to pay restitution and continues to enjoy contracts all over the world.15 Even those companies that have made some form of welcome restitution—Daimler Benz being the most recent case—go to considerable lengths to deny any culpability whatsoever for the Holocaust, portraying their payments to their former slaves as a form of charity.16

  On the U.S. side of the Atlantic, the Dulles brothers’ tangled role in U.S.-German relations was bound to bob to the surface from time to time as liberal Democrats leveled charges against them during election campaigns. But after the political atmosphere in the U.S. shifted sharply to the right in 1945, the more respectable media declined to take such criticisms seriously.

  The harsher assessments of the Dulles brothers’ role that did find their way into print often carried ideological baggage or included just enough errors for the Dulleses to sidestep and discredit the charges. The Soviet-backed Cominform (the late-1940s successor to the Comintern) published a broadside against the Dulleses’ financial and political role in Germany, as one element of the USSR’s postwar publicity offensive against U.S. policy in Europe. The statement contended that the flood of capital into Germany during the 1920s had in the end helped build the industrial infrastructure of Hitler’s state, and that Allen Dulles, John Foster Dulles, and the law firm of Sullivan & Cromwell had been instrumental in that process. All of that was true enough. The Cominform then went on to claim that Allen Dulles was “director of the J. Henry Schroeder [sic] interests in London, Cologne and Hamburg”; that the German steel trust played the “leading part” in Schroeder bank affairs; and that Sullivan & Cromwell was “closely connected” with Standard Oil, the Chase National Bank, and with Rockefeller interests in general.17

  By the time these charges aired in 1948, almost any comment from a Communist source was easily discredited in the United States. In this particular case, the facts were that the J. Henry Schroder Bank of London did indeed join with the Rockefellers and Dillon, Read during the 1920s to invest millions of dollars in the German steel trust, which in turn used the capital to build new factories that were within a few years engaged mainly in military production. Allen Dulles had been a director between 1937 and 1943 of the New York subsidiary of the London Schroder bank. The London bank did have substantial familial, banking, and business ties with a Schroder-family-owned bank in Germany that had been a major financial backer of the SS. But the German Schroder Bank was incorporated and financed separately from that of the London and New York Schroders. The various Schroder banks often cooperated in international investments, but they were not exactly the same institution, Dulles’s defenders pointed out. Meanwhile, although the Sullivan & Cromwell partners most certainly shared with the Rockefellers many investments, political causes, and social clubs, the law firm as such had not been attorneys of record for Standard Oil or for the Chase Bank during the 1920s investment binge.

  The Dulles brothers used these discrepancies to denounce the Cominform criticism as “wholly without foundation,”18 then succeeded in using the Soviets’ denunciation as “proof,” of sorts, that any such criticisms were by definition inaccurate and probably Communist-inspired. When the liberal New York Post raised questions about John Foster Dulles during a hard-fought senatorial campaign, he wrote in reply that the Post article was “totally misleading and merely paraphrases the smear line that has been adopted by the Soviet communist newspapers. See, for example, the Moscow New Times issue of February 28, 1947 …”19

  And there the matter rested, despite occasional grumblings from the political left. A few years later, John Foster Dulles’s nomination as U.S. secretary of state came before the Senate in what would prove to be the last opportunity for a public inquiry into the lingering questions concerning Dulles’s relationship with the German financial elite during the Hitler years. The confirmation hearings took place just as the Korean War had opened a new and more dangerous phase, when Senator Joseph McCarthy was riding high, and when the Republican party had won the White House for the first time in twenty years. John Foster Dulles’s confirmation hearings went smoothly. A month later, President Eisenhower appointed his brother Allen to be director of the CIA.

  The United Nations War Crimes Commission staggered on for about another eighteen months after Hackworth and the State Department decided to shut it down. The British wanted to close it immediately,20 but the U.S. preferred to let its budget peter out, thereby avoiding the embarrassing political questions that would inevitably accompany the abandonment of war crimes enforcement less than thirty-six months after the end of the war. General Lucius Clay, acting in coordination with secretary of war and State Department officials, announced in the summer of 1947 that all requests for U.S. assistance in the transfer or prosecution of alleged quislings and war criminals had to be filed by November 1 of that year, and that all evidence necessary to make a prima facie case against suspects must be submitted by December 31, unless there were “exceptional circumstances.”21 These deadlines brought bitter protests from Dutch, French, Belgian, and other national authorities,22 and were adjusted slightly over the next few months in a series of contradictory announcements that left many European diplomats and war crimes specialists scratching their heads over just what U.S. international legal policy actually was.23

  France, Poland, and Czechosl
ovakia responded by filing hundreds of requests for transfer of war criminals with the UNWCC and with the U.S. military government. Some of these cases raised basic questions of law and justice that had up to then been carefully sidestepped by U.S. and British prosecutors. Polish case No. 7593, for example, charged five German air force and army generals with “deliberate bombardment of undefended places,” in connection with the September 1939 attack on Warsaw.24 This attack had been formally condemned as a war crime by President Roosevelt prior to the U.S. entry into the war, it will be recalled, and the U.S. and the United Nations had nominally recognized such attacks as war crimes. A second Polish case laid out the complex scheme through which German banks and businesses looted the economies of a half-dozen European countries through the predatory currency-clearing arrangements operated in part via the Bank for International Settlements.25

  The majority of the UNWCC voted to accept both new Polish charges. The U.S. and British delegations blocked this action, however, fearing that those prosecutions could set legal precedents that neither government was prepared to accept. Less than two months later, the UNWCC shut its doors for good without having reached a decision. Hundreds of other war crimes charges were processed in the last weeks of the commission’s work. Some were rejected, but most were accepted as prima facie cases, which presumably would have obligated the U.S. and Britain to deliver these suspects and any available evidence. As a practical matter though, all of the case filings were packed away in cardboard boxes to await a decision from the United Nations as to what was to be done with the UNWCC records.

  The U.N.’s assistant secretary general in charge of its legal department, Ivan Kerno, declared a few months later that there was “no precedent” for releasing the UNWCC records, even to government prosecutors, and that the material in the UN files “with the exception of a relatively few cases … had not yet been submitted to judicial process or otherwise subjected to legal evaluation.” Kerno determined that the War Crimes Commission records—including some 25,000 case files on alleged Class A war criminals, most of whom had not yet been tried—were to be retired to a UN warehouse and to remain closed in all but the most extraordinary circumstances.26 There the records remained for more than forty years, until the worldwide controversy surrounding Kurt Waldheim finally pried them open.27