How Bush's Grandfather Helped
Hitler's Rise to Power
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
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 re-election.
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
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 1942.
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 effort".
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
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
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
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
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
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
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 compensation."
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?"
"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
"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
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 accusations".
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 sympathiser."
However, one of the country's oldest Jewish
publications, the Jewish Advocate, has aired the controversy in
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
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