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CHAPTER 2

 

THE CIA-NAZI CONNECTION

 

 

CONTENTS

AMERICAN CORPORATIONS COLLABORATING WITH THE NAZIS

THE GEHLEN ORGANIZATION

RECRUITING NAZIS

COMPENSATING HOLOCAUST SURVIVORS

 

AMERICAN CORPORATIONS COLLABORATE WITH THE NAZIS

 

In 1998, the Justice Department declassified documents which showed that 300 American companies continued doing business in Germany during the war. Additionally, there have been allegations that Ford and General Motors' subsidiaries in Germany used slave labor. German factories also constructed factories and railroads throughout South America. Several of these corporations continued to keep subsidiaries in Germany during the war.

 

Approximately 50 corporations employed slave and forced labor during World War II. These included American companies -- Bayer, BMW, Volkswagen, and Daimler-Chrysler -- which reached agreement in December 1999 to establish a $5.1 billion fund to pay victims. Opel, General Motors' German subsidiary, announced it would contribute to the fund. Other American companies operating in Germany during the war included General Motors and the Ford Motor Company.

 

FORD MOTORS. The Ford plant in Dearborn, Michigan opened Ford Werke, its first German plant in Berlin in 1925. Its second plant was completed six years later in Cologne. Ford Motors immediately cozied up to the Nazi regime after Hitler seized power in 1933. A large portion of the automobile manufacturer's close relationship with the Nazis is attributable to the anti-Semitism of Henry Ford. His pamphlet, The International Jew: The World's Foremost Problem, was embraced by Adolf Hitler.

 

According to the American Army report of 1945, prepared by Henry Schneider, Ford Werke producing military vehicles for Hitler even before the war began. Ford Motors also established a war plant ready for mobilization day near Berlin "with the ... approval of Dearborn." After Hitler touched off World War II by invading Poland in 1939, Ford Werke became one of the largest suppliers of vehicles to the German Army. National Archives' documents showed that Ford Motor had contracts with the German SS and police.

 

According to The Nation (January 7, 2000), Ford Motors' home office in Dearborn, Michigan helped boost Ford Werke's profits by placing orders with the Cologne plant for direct delivery to Ford plants in Latin America and Japan. But in 1936, Hitler blocked the German subsidiary from buying needed raw materials. Ford Motor responded by helping bolster Hitler's war machine. It sent rubber and other materials to Cologne in exchange for German-made parts. The Nazi government took a 25 percent cut out of the imported raw materials and gave them to other manufacturers. In 1938, Ford Motors accepted the Grand Cross of the German Eagle, the Nazi regime's highest honor for foreigners.

 

Ford Motors continued its close ties with Nazi Germany. Ford Werke provided Hitler with a birthday gift of 35,000 Reichsmarks in April 1939. A letter from Ford Werke read, "The management of the Ford-Werke salutes our Führer with grateful heart, honesty, and allegiance, and -- as before -- pledges to cooperate in his life's work: achieving honor, liberty, and happiness for Greater Germany and, indeed, for all peoples of Europe." In 1940, Heinrich Albert, the director of Ford Werke in Cologne, wrote back to the Michigan plant, "The ‘Dementi' of Mr. Henry Ford concerning war orders for Great Britain has greatly helped us." And in October 1940 Edsel Ford commended Ford Werke for its operations in Germany. this subject as possible and we will have the benefit of your thoughts and suggestions at the proper time."

 

Just prior to the American entry into World War II, Ford Motors feared that Hitler would seize its German facilities. Management at Ford Werke wrote the Nazi government and "questioned whether Ford must be treated as enemy property," even if the United States were to declare war on Hitler's government. The June 18 memo read, "Ford has become a purely German company and has taken over all obligations so successfully that the American majority shareholder, independent of the favorable political views of Henry Ford, in some periods actually contributed to the development of German industry."

 

Production at Ford Werke continued to rise after the December American declaration of war, as the value of the German subsidiary more than doubled during the course of the war. The Nation (January 7, 2000) uncovered records at the National Archives indicating that Ford Motors continued its close ties with Germany during the war. The documents showed that before December 7, 1941, Ford Motor made huge revenues by producing war material for Germany and that the company chose a Nazi sympathizer to operate its German subsidiary.

 

Five months after the United States declared war against Germany, the Superior Court of Cologne made Ford Werke a "trusteeship," ruling that it was "under authoritative enemy influence." However, the Nazis never nationalized Ford Werke's factories. The home plant in Dearborn continued to control 52 percent control throughout the war.

 

Ford Werke stopped manufacturing passenger vehicles in 1941, and the plant switched its entire production capacity to military trucks. In the spring of 1941, the leader of the Nazi Party in Cologne sent a letter to the Ford Motors plant thanking its leaders for helping "assure us victory in the present (war) struggle" and for demonstrating the willingness to "cooperate in the establishment of an exemplary social state." Of the 350,000 trucks used by the motorized German Army in 1942, approximately one-third were manufactured by Ford Werke in Cologne. A secret 1944 American Air Force "Target Information Sheet" on the Cologne factory said that for the previous five years it had been "geared for war production on a high level."

 

Two of Ford Motors' top executives sat on the subsidiary's board during World War II. According to an American Army report written in 1945, German Ford served as an "arsenal of Nazism" with the consent of its headquarters in Michigan. But Ford Motors continued to cooperate with Hitler until at least August 1942. Nevertheless, Ford Motors maintained that his company's headquarters in Michigan lost control of its German plant after the United States entered the war in 1941. Ford Motors refused to accept responsible for any actions taken by the German subsidiary during the war. Lydia Cisaruk, a Ford Motor spokeswoman, said, "The Nazis confiscated the plant there and we lost all contact. After the United States entered the war, Ford threw its entire backing to the war effort."

 

By 1943, half of Ford Werke's work force comprised captured soldiers including French, Russians, Ukrainians, and Belgians. Robert Schmidt, who operated Ford Werke since 1939, said that the company used forced laborers even before the Nazis put the plant in trusteeship. A Ford Werke memo in 1945 stated, "(by 1940) many of our employees were called to the colors and had to be replaced by whatever was available. ... The same applies to 1941. Some 200 French prisoners of war were employed." After V-E Day, Schmidt told the American Army that the Gestapo began to play an important role at Ford Werke after the first foreign workers arrived. With the assistance of W.M. Buchwald, a Ford employee since the mid-1930s, the Gestapo carefully monitored plant activities. Schmidt said, "Whenever there was the slightest indication of anti-Nazi feeling, be it amongst foreigners or Germans, the Gestapo tramped down as hard as possible."

 

In August 1944, a squad of SS soldiers brought 15 prisoners from the Buchenwald concentration camp to Ford Werke. According to Karola Fings, co-author of Working for the Enemy, captured enemy soldiers worked 12 hours a day. They were fed 200 grams of bread and coffee for breakfast with no lunch, and their dinner consisted of spinach and three potatoes or soup made of turnip leaves.

 

German Ford had stopped manufacturing passenger vehicles in 1941, and the plant switched its entire production capacity to military trucks. In the spring of 1941, the leader of the Nazi Party in Cologne sent a letter to the Ford plant thanking its leaders for helping "assure us victory in the present (war) struggle" and for demonstrating the willingness to "cooperate in the establishment of an exemplary social state." Of the 350,000 trucks used by the motorized German Army in 1942, approximately one-third were manufactured by Ford Motor of Cologne. A secret 1944 American Air Force "Target Information Sheet" on the Cologne factory said that for the previous five years it had been "geared for war production on a high level."

 

Two of Ford's top executives sat on the subsidiary's board during World War II. According to an American Army report written in 1945, Ford Werke served as an "arsenal of Nazism" with the consent of its headquarters in Michigan. But Ford Motors continued to cooperate with Hitler until at least August 1942. Nevertheless, Ford Motor maintained that his company's headquarters in Dearborn, Michigan lost control of its German plant after the United States entered the war in 1941. Ford Motors refused to accept responsible for any actions taken by the German subsidiary during the war. Lydia Cisaruk, a Ford Motor spokeswoman, said, "The Nazis confiscated the plant there and we lost all contact. After the United States entered the war, Ford threw its entire backing to the war effort."

 

Production at Ford Werke slowed at the end of the war. Dearborn representatives from England and the United States traveled to Cologne to inspect the plant and plan for the future. In 1948, Henry Ford visited Cologne to celebrate the 10,000th truck to roll off the postwar assembly line there. Two years later, Ford of Germany rehired Schmidt -- who had been arrested and briefly held by American troops at the war's end -- after he wrote a letter to Dearborn in which he insisted that he had detested the Nazis. He was one of six key executives from the Nazi era who moved back into important positions at Ford Motors after 1945 and remained there until his death in 1962.

 

Before Germany surrendered, it gave Ford Werke about $104,000 in compensation for damages caused by Allied bombings. But Ford Motors would not settle for that amount. In 1965, the company appealed to the Foreign Claims Settlement Commission of the United States and asked for an additional $7 million. Subsequently, the commission awarded the company $1.1 million -- but only after determining that Ford Motors had used a fraudulent exchange rate to inflate the size of the alleged damages. The commission also found that Ford Motors had sought compensation for merchandise that had been destroyed by flooding.

 

Ford Motors also had close ties with Vichy France during the German occupation. A Treasury Department report written during the war concluded that the Ford family sought to further its business interests by encouraging its executives in France to work with German officials overseeing the occupation. The report said, "There would seem to be at least a tacit acceptance by (Henry Ford's son) Mr. Edsel Ford of the reliance ... on the known neutrality of the Ford family as a basis of receipt of favors from the German Reich." Ford refused to participate in the settlement talks -- according to the director of global operations, Jim Vella -- "because Ford did not do business in Germany during the war -- our Cologne plant was confiscated by the Nazi government -- it would be inappropriate for Ford to participate in such a fund."

 

Ford Motors also collaborated with the Nazis in Vichy France during World War II. Maurice Dollfus was Ford Motors' director in France since 1929 and the company's manager during the German occupation. A Treasury Department investigation indicated that the company encouraged Dollfus to work closely with the Vichy government. A Treasury Department document read, "Mr. Dollfus was required by law to replace directors, and he selected the new directors exclusively from the ranks of prominent collaborationists. Mr. Dollfus did this deliberately to curry favor with the authorities." The report refers to another Ford employee, Amable Roger Messis, as "100 percent pro-German."

 

The Treasury Department also concluded that the company's headquarters in Michigan regularly contacted its officials in Vichy France. In one letter, Dollfus assured Dearborn that "we will benefit from the main fact of being a member of the Ford family which entitles us to better treatment from our German colleagues who have shown clearly their wish to protect the Ford interest as much as they can." A Ford executive in Michigan wrote back, "We are pleased to learn from your letter ... that our organization is going along, and the victors are so tolerant in their treatment. It looks as though we still might have a business that we can carry on in spite of all the difficulties."

 

In January 1942, Dollfus informed Edsel Ford that Ford Motors' operations had the highest production level of all French manufacturers and that he was "still relying on the French government to preserve the interests of American stockholders." During the following months, Dollfus wrote to Edsel several times to report on damages suffered by the French plant during bombing runs by the Royal Air Force. Edsel replied and indicated that he was happy that American newspapers did not identify it as a company property.

 

GENERAL MOTORS. Automobile manufacturer General Motors also corroborated with Nazi Germany. The Washington Post reported that an FBI document in 1941 quoted James Mooney, General Motors' director of overseas operations, as saying he would refuse to do anything that might "make Hitler mad."

 

CHASE MANHATTEN. NBC News reported in November 1999 that Chase Manhatten's French branch froze Jewish accounts at the request of German occupation authorities during the war. Chase Manhatten's Paris branch manager, Carlos Niedermann, worked closely with German officials and approved loans to finance war production for the Nazi Army.

 

BOSCH CORPORATION. In 1940, Sullivan & Cromwell, one of the largest law firms in the United States, represented a Nazi engine-parts producer, Bosch Corporation. Immediately following the war, Treasury Department attorney Abe Weissbrodt prosecuted Bosch. Weissbrodt maintained that the law firm created a Swedish dummy owner for Bosch which enabled the Nazis to maintain control. This was overseen by John Foster Dulles who at the time was a Sullivan partner.

 

BERTELSMANN CORPORATION. Another American corporation, Bertelsmann, cooperated with the Hitler government. The company is presently the world’s third largest publisher of English-language trade books with annual revenues of $14 billion and with operations in countries. The company owned book clubs, magazines, newspapers, and music labels such as RCA. Additionally, Bertelsmann co-owns CLT-UFA, Europe's biggest television and radio company; and has had a major stake in America Online. In the United States its holdings include Random House and Bantam Doubleday Dell, and it is a partner with Barnes & Noble in a new Internet bookstore. Bertelsmann has removed from its Web pages all references to its history in the Nazi era.

 

Founded in 1835 in Germany, Bertelsmann published prayer books and hymnals. Bertelsmann began to publish books during the early Hitler period that were used by Nazi propagandists. According to The Nation, the company issued a book geared for Nazis: Dr. Martin Luther's Little Catechism for the Man in Brown (Der kleine Katechismus Dr. Martin Luther’s für den braunen Mann), edited by Werner Betcke, which praised Hitler and the Nazi movement. In 1936 Bertelsmann brought out a popular edition of People Without Space (Volk ohne Raum) by Hans Grimm, an ardent Nazi supporter. The book was used to justify Hitler's expansionist attacks on Germany's neighbors. Throughout the thirties, Bertelsmann published bestsellers by authors favored by Göbbels's propaganda ministry. They glorified battles and in an attempt to win Germans over to their side in the war. For example, one book stated that Jewish civilians massacred Ukrainian women and children, and they contained pictures of forlorn men with beards above the caption: "Jews look at you." In the late thirties and during the war, the publishing house printed "blood and soil" action stories by the hundreds of thousands for soldiers. Shortly before Christmas 1939, Bertelsmann brought out special editions that could easily be sent by military posts to soldiers at the front. These editions were so successful that Göbbels appealed to other publishers for such materials of religious works, was forced to close its Der Rufer theological division. However, the corporation continued to publish other types of books. In 1943, it was investigated by an army court for illegally procuring paper and profiteering, and several senior executives were arrested in 1944. Heinrich Mohn, a member of the founding family of the firm as well as principal owner and chief executive, was not arrested. The company’s executives were released after some months; and Bertelsmann continued in business.

When Bertelsmann applied after the war for a second publishing license, it was turned down by occupation authorities. Mohn had "forgotten" to mention that he had been a "passive" member of the SS, as well as a supporter of the Hitler Youth and a member of the National Socialist Flying Corps. In 1947, Bertelsmann wrote to the Allied authorities that because of illness and age, Mohn was replaced by his son Reinhard Mohn who immediately and successfully applied for the license. Mohn controlled the majority voting power when Bertelsmann served in the Luftwaffe under Hitler. He was taken prisoner by the Americans in 1943 and was released in early 1946.

 

THE GEHLEN ORGANIZATION

 

During World War II, Major General Reinhard Gehlen was part of the German General Staff, and he headed the Foreign Armies East unit which provided Hitler with covert information on the Soviet Union. Gehlen began planning his surrender to the United States at least as early as the fall of 1944. In early March 1945, a group of Gehlen's senior officers microfilmed their holdings on the USSR. They packed the film in steel drums and buried it throughout the Austrian Alps. On May 22, 1945, Gehlen and his top aides surrendered to an American Counter-intelligence Corps (CIC) team. (Federation of American Scientists, November 26, 1997)

After the war, the United States recognized that it did not have an intelligence capability directed against the Soviet Union. Consequently, Gehlen negotiated an agreement with the American Counter-intelligence Corps (CIC) as well as with the British Secret Intelligence Service. The Gehlen Organization was a forerunner to West Germany's secret service, the BND -- which was formally recognized in 1956. Gehlen headed it until he retired in 1968.

The Gehlen Organization started in 1945 with about 350 agents who were released from internment camps and relocated at the group's headquarters in the Spessart Mountains in central Germany. When the staff grew to 3,000, Gehlen moved to a twenty-five- acre compound near Pullach, south of Munich, operating under the innocent name of the South German Industrial Development Organization. In the early 1950s, it was estimated that the organization employed up to 4,000 intelligence specialists in Germany, mainly former army and SS officers, and that more than 4,000 V-men (undercover agents) were active throughout the Soviet-bloc countries.

The CIC also launched Operation Lusty after the war concluded. The purpose was to gather scientific papers, blueprints, and experimental models hidden away in German mines, caves, and castles, and some were even buried underground. The confiscation of German files was the responsibility of the "T-Forces" of the OSS. Colonel Donald Putt of the Allied Technical Information Service gathered prototypes of future airplanes.

In 1949, the CIC transferred control of Gehlen to the CIA. Gehlen agents recruited and trained agents from Eastern Europe and sent them back on covert intelligence operations. In 1950, the CIA attempted to lead a coup in Albania. Gehlen operants recruited Albanian emigres in Egypt, Greece, and Italy and trained them in Cyprus and Malta. They secretly entered Albania but failed to bring down the leftist government of Enver Hoxha. Most of the agents were never seen again. It was estimated that 500 captured and killed.

Under Operation Sunrise, some 5,000 anti-communist Eastern European and Russian personnel were trained for operational missions at a camp at Oberammergau in 1946, under the command of General Sikes and SS General Burckhardt. This and related initiatives supported insurgencies in areas such as Ukraine, which were not entirely suppressed by the Soviets until 1956. Operation Rusty encompassed gathering positive and counterintelligence information concerning the activities and organizations of an Intelligence Service and activities of various dissident German organizations. The operation involved close coordination and cooperation with foreign and other United States intelligence organizations.

The Gehlen Organization also supplied information to the CIA on Soviet missile developments, supposedly based on contacts with German scientists captured by the Russians at the end of the war. But by the mid-1950s, it became increasingly apparent that many of the assets of the Gehlen Organization were in fact controlled by Soviet intelligence. Dozens of operations, hundreds of agents, thousands of innocent civilians had been betrayed, many at the cost of their life.

In 1948, contact was established with a supposedly anti-Communist Polish underground organization known as WIN. The group provided evidence of actions conducted against Soviet troops, and provided secret documents to Western intelligence. WIN was provided with money, weapons, equipment, and intelligence data. But by 1952, people entering Poland to help WIN were disappearing and its information was becoming less reliable. In late 1952, the underground was suddenly disbanded and a radio broadcast by the Polish Communist government demonstrated, in detail, that WIN had been created by the Soviet secret police and had received Soviet help in deceiving the West. The documents provided had been disinformation, the program had been financed with Western money, and the episode had distracted from other efforts to undermine the Polish regime while it was consolidating power.

In April 1956, control of the Gehlen Organization shifted to the West Germany government. Gehlen remained chief of the West German Intelligence service until he retired in 1968. (Federation of American Scientists, November 26, 1997)

In March 2001, the CIA began declassifying the records of its dealings with former Nazi spies after World War II. The agency said it found 251 boxes and 2,901 file folders of potentially relevant documents -- apparently more than 250,000 pages. (Washington Post, March 18, 2001)

Carl Oglesby, a political writer and researcher, had been seeking the records since 1985 in connection with a study of Gehlen. When Oglesby got only a handful of documents from the Army and the CIA, he sued in 1987, emphasizing meetings that Gehlen held in the summer of 1945 with American officials at Fort Hunt, Virginia. He and some other researchers believed that the post-war hunt for Nazi war criminals was severely compromised by American intelligence demands for help in meeting the new Soviet menace.

Oglesby's lawsuit continued for 13 years with the CIA refusing to confirm or deny that it had any records reflecting a relationship with Gehlen. The litigation survived two trips to the United States Court of Appeals. But in August 2000, Chief United States District Judge Norma Holloway Johnson issued an order indicating she was about to dismiss it at the government's request. She rejected the idea that the CIA or any other agency had delayed the case. Weeks later, the CIA formally acknowledged that Gehlen had at the end of the war turned over what remained of his intelligence collection efforts against the Soviet Union and started spying for the United States; the Army supervised his work until 1949, when the CIA stepped in for a seven-year stint. (Washington Post, March 18, 2001)

 

RECRUITING NAZIS

 

GOVERNMENT INVESTIGATIONS. Numerous allegations about collaborating with the German Nazis -- during and after World War II -- have been leveled at the CIA.

First, the CIA and its predecessor, the Office of Strategic Services (OSS), the Strategic Services Unit (SSU), and the Central Intelligence Group (CIG), employed German intelligence personnel as sources of information. Afterward, the CIA sponsored the new West German intelligence service, an organization under the control of officers of the defunct German general staff.

Second, the OSS and CIA recruited collaborators of Nazi Germany, primarily from Eastern and Southern Europe, as sources of information and operants in the Soviet Union.

Third, the CIA and the Office of Policy Coordination (OPC) imported Nazis into the United States to provide information on the Soviet Union.

Fourth, the CIA and OPC, formed "secret armies" from various European groups, including Nazi sympathizers, and trained them in the United States.

Fifth, the CIA evacuated Nazi war criminals and collaborators through "rat lines" in southern Europe, allowing them to escape justice by relocating them in South America.

Sixth, the CIA brought Soviet and Soviet Bloc defectors to the United States.

Seventh, the CIA covered up its these activities from congressional and other federal investigators.

The congressional investigations were launched by Congressmen Joshua Eilberg and Elizabeth Holtzman. After the INS's investigation appeared to be at a standstill. Congress demanded that the GAO determine whether the INS or any other government agency had conspired to obstruct legal action against alleged Nazi war criminals living in the United States. Congress made this request in January 1977, marking the beginning of the first GAO investigation. The Special Litigation Unit, a new office within INS and the immediate predecessor to the OSI, also started its separate investigation at the same time. (www.cia.gov/csi/studies/97unclass/naziwar)

In May 1978, the GAO released its formal report, Widespread Conspiracy To Obstruct Probes of Alleged Nazi War Criminals Not Supported by Available Evidence -- Controversy May Continue. The GAO found that the CIA had no records on 54 of 111 alleged Nazi war criminals. Of the remaining 57, the CIA had references, such as newspaper articles and general correspondence with other federal agencies, on 35. That left 22 individuals with whom the CIA admitted to GAO investigators that it had a more substantial relationship. In an unnamed case, the CIA sponsored the immigration of a "senior official of the German Foreign Ministry during the Nazi era" to the United States. The remaining 21 had contact with the CIA either overseas or after their immigration to America. Some were paid, while the agency declined to use others. (www.cia.gov/csi/studies/ 97unclass/naziwar)

The GAO maintained that the CIA assisted only one person to immigrate to the United States. When the 1978 GAO report was released, Eilberg charged that "this report makes clear that the CIA and FBI were more interested in using these people and getting information from them than in conducting any background investigation as to their wartime activities or pursuing allegations that they were war criminals. Subsequently, Holtzman worked to strengthen American immigration laws to "exclude from admission into the United States aliens who have persecuted any person on the basis of race, religion, national origin, or political opinion, and to facilitate the deportation of such aliens who have been admitted into the United States."

In May 1982, John Loftus, a former OSI attorney, announced on CBS- TV's 60 Minutes that numerous branches of the government, including the Army, the FBI, the CIA, and the State Department, had employed Nazis and brought them to America after the war. Furthermore, Loftus charged that these same agencies had refused to support the GAO's investigation of 1977 and 1978. This led to a new GAO investigation that took another three years. This time, the CIA allowed the GAO investigators full access to its records in an effort to avoid the controversy that marred the first GAO examination.

In 1985, the GAO released its second report, entitled Nazis and Axis Collaborators Were Used To Further US Anti-Communist Objectives in Europe--Some Immigrated to the United States. After years of research through 150,000 files and interviewing numerous surviving American intelligence officers, the GAO concluded that "U.S. intelligence used anti-Communist resources that had immediate intelligence potential."

The GAO investigated 114 individuals and provided detailed summaries on 12. Of this latter number, the conclusion was that the CIA was involved with five with "undesirable or questionable backgrounds" who had received aid to move to the United States. The GAO "found no specific program to aid the immigration of undesirable aliens." It concluded that "its review was sufficiently broad and unrestricted to state that this report fairly portrays the conditions that existed following World War II." Even so, the GAO's report admitted that while it was "not denied access to any documents requested ... intelligence agencies often assign projects innocuous names which do not reflect the projects' purposes and, therefore, we cannot assure that we requested all relevant projects' files. ... We cannot be completely sure that we have obtained all relevant information or that we have identified all Nazis and Axis collaborators assisted by U.S. agencies to immigrate to the United States. (www.cia.gov/csi/studies/97unclass/naziwar)

The GAO conducted two major investigations since 1977 in an attempt to uncover evidence linking the CIA to the escape of German Nazis after World War II. In addition, the Immigration and Naturalization Service (INS) and the Department of Justice's Office of Special Investigations (OSI) carried out independent inquiries since the mid-1970s. The purpose of the OSI probe was to look for evidence indicating that American immigration laws were violated by covering up illegal activities during World War II. Ultimately, the OSI divested 52 people of their citizenship and removed another 44 since 1979. In addition, the OSI conducted nearly 1,500 investigations and placed the names of some 60,000 individuals on a "watch list" to alert American immigration officials to prevent their entry into the United States.

According to Christopher Simpson, author of the 1988 book, Blowback: America's Recruitment of Nazis and Its Effects on the Cold War, "U.S. intelligence agencies did know -- or had good reason to suspect -- that many contract agents they hired during the Cold War had committed crimes against humanity on behalf of the Nazis. The CIA, the State Department, and U.S. Army intelligence. ... Each created special programs for the specific purpose of bringing former selected Nazis and collaborators to the United States. Other projects protected such people by placing them on U.S. payrolls overseas."

John Loftus, a former OSI attorney, announced on CBS's 60 Minutes in May 1982 that numerous branches of the government -- including the Army, the FBI, the CIA, and the State Department -- had employed Nazis and brought them to America after the war. Furthermore, Loftus charged that these same agencies had refused to support the GAO's 1977-78 investigation. This led to another GAO investigation that lasted three years and unearthed thousands of documents from numerous agencies. This time, the CIA granted the GAO investigators full access to its records in an effort to avoid the controversy that marred the first GAO examination.

OPERATION PAPERCLIP. Paperclip -- because paper clips were attached to documents of German scientists and doctors. Under Operation Paperclip and its successor, Project 63, the United States Army's Counter-Intelligence Corps (CIC) recruited primarily doctors and scientists. In 1946, Operation Paperclip was approved by Truman, and over 1,000 SS agents, most of whom had conducted experiments in German concentration camps, were brought to the United States. They along with their families were given protection by the Joint Chiefs of Staff. Thus, they avoided the INS procedures and requirements to enter the United States. During Paperclip -- between the late 1940s and 1973 -- approximately 1,600 scientists and several thousand dependents were brought to the United States. The highest ranking American military officer to head Paperclip was Colonel Henry Whalen who had been convicted of espionage.

The officials operating Paperclip justified the recruitment of Nazi scientists, maintaining that they would have left for the Soviet Union had they not been invited to come to the United States. The Joint Intelligence Operations Agency (JIOA), directed by Bousqet Wey, was given the task of censoring the files of the recruits in December 1947.

KURT WALDHEIM. Waldheim served as Austrian president from 1972 to 1982. Then he was elected secretary-general of the United Nations. His career was clouded by allegations he that he hid a Nazi past. While he had admitted his service in the German Army, he had never fully described the extent of his activities in the Balkans, a region marked by numerous Nazi atrocities. The fact that Waldheim rose to such high levels after the war led many observers to question whether he worked with the United States, the Soviet Union, or the Yugoslavian intelligence services.

In 1980, Congressman Stephen Solarz expressed interest in Waldheim's early life. He approached both Waldheim and CIA Director William Casey. The CIA's Office of Legislative Counsel told Solarz: "We believe that Waldheim was not a member of the Nazi Youth Movement, nor was he involved in anti-Jewish activities." In addition, the CIA provided a summary of Waldheim's military record and said there were no indications that Waldheim had "participated directly or indirectly in anti-Jewish activities."

The CIA response to Solarz resulted in embarrassment in both congressional hearings and during the OSI's examination into Waldheim's wartime activities. As a result of OSI's 1987 report, the Department of Justice placed Waldheim's name on the "watch list" to prevent his entry into the United States. The OSI concluded that "Waldheim had participated in the transfer of civilians to the SS for slave labor; the mass deportation of civilians to death camps; the use of anti-Semitic propaganda; the mistreatment and execution of Allied prisoners of war; and the reprisal execution of civilians." (www.cia.gov/csi/studies/97unclass/naziwar) The report, however, did not address whether Waldheim had postwar intelligence connections with the East or West.

According to CIA declassified documents, released on April 27, 2001, the Waldheim file included a 1945 report, presumably from the British, indicating Waldheim's status as an intelligence officer in a German army group in the Balkans. Surprisingly, no one had asked the CIA to check Waldheim's background when he was nominated as U.N. secretary general in 1971. The CIA records showed that Waldheim was not involved with the American intelligence community after World War II.

Waldheim has been barred from entering the United States since April 1987, following an investigation of his wartime activities. American law prohibits admission of anyone who participated in World War II persecution. As secretary general, Waldheim refued to step down but declined to run for a second term because of the continuing controversy.

ADOLF HITLER. The comments about Hitler's mental state were attributed to his personal physician and surgeon at the University of Berlin, Dr. Ferdinand Sauerbruch, in a memorandum written on December 7, 1944, by Ronald Carroll, an OSS officer. The report was based on an interview with an informer, Hans Bie, who said he discussed Hitler's growing megalomania with Sauerbruch at a party in 1937. According to the memorandum, Sauerbruch was reported to have said that "from close observation of Hitler for many years, he had formed the opinion that the Nazi leader was a border case between genius and insanity and that in his opinion the decision would take place in the near future whether Hitler's mind would swing toward the latter."

KLAUS BARBIE: THE BUTCHER OF LYON." The greatest asset to American security forces was Nazi officer Klaus Barbie, the "Butcher of Lyon." He worked his way up the Gestapo ladder during World War II. After the German occupation of France in 1942, Hitler named him commander of the SS office in Lyons in 1942 where he ordered the murder of 4,000 Jews. After the war concluded, Barbie was charged with war crimes at Nurenberg. Assistant Secretary of War John McCloy, formerly a Wall Street attorney, intervened in the executions of some convicted Nurenberg criminals. He arranged to have Barbie sheltered from prosecution by the 970th Counterintelligence Corps at Oberamergau. McCloy's motives were clear. He represented Standard Oil and Chase Manhatten Bank which were big investors in Nazi Germany. Before the war, McCloy was the legal adviser to I.G. Farben, the German chemical conglomerate, many of whose officials were elevated to high positions by Hitler. The company also prospered from Jewish slave labor at Auswitz and other concentration camps.

Barbie was quickly picked up by the CIC and put on their payroll. According to Klaus' CIA file which was declassified on April 27, 2001, his job was to keep track of communists. The CIC protected him from French prosecution. A 1967 American Army document, declassified on April 27, 2001, said, "Exposure of Counterintelligence Command's role in evacuating him from Germany to avoid prosecution would have serious consequences for the U.S. government."

By 1947, he was relocated under an assumed name in Germany, and remained there until 1951. American intelligence units moved Barbie to Austria and then on to LaPaz, Bolivia in April 1951. Within six years Bolivian dictator Victor Paz Estensorro awarded him citizenship which also prevented other countries from extraditing him. However, Paz did not remain friendly to the United States since he refused to send it troops to squelch a miners' strike. Additionally, he openly supported the Castro government in Cuba. By this time the CIA wanted Paz removed from power.

By the early 1960s, the CIA recruited Bolivian General Rene Barrientos Ortuno who, in turn, launched an attack on the presidential palace in 1964. Paz fled the country, and the CIA placed General Rene Barrientos Ortuno in power. The American government sent in troops to assure control as well as bringing 1,600 military officers back to the United States for training. This group included the top 23 Bolivian Army generals. The French continued their hunt for Barbie, but the United States government denied any knowledge of his whereabouts. Barrientos placed Barbie on his Department 4, his internal security force, and Barbie was put in charge of planning counterinsurgency operations. When Bolivian tin miners walked out and struck again, Barbie quickly responded by using Nazi techniques of interrogation, torture, and murder. Over 100 miners were killed by Department 4 troopers. Barbie extended his terrorist tactics when he launched an attack against Bolivian Indian tribes whom he considered genetically and culturally inferior.

Barbie also continued to prosper by starting the Estrella Company which sold bark, coca paste, and assault weapons to a former SS officer, Frederich Schwend in Lima, Peru. Schwend had been trained by the OSS in the early 1940s after he had informed CIA Director Dulles that the German SS had hidden millions in gold, cash, and loot as the European war was winding down. Both Schwend and Barbie formed Transmaritania which was a shipping company that also generated millions of dollars in profits from the cocaine business. They purchased their weapons from another SS colleague, Colonel Otto Skorzeny who had been Hitler's favorite Stormtrooper, and who had started the Merex weapons business in Bonn after the war.

In 1969, Barrientos ironically was killed when his Gulf Oil helicopter crashed, and he was succeeded by General Ovando Candia and after one year by General Juan Jose Torres. However, Torres turned out to be a populist and exiled Cuban refugee Che Guevara and nationalizing foreign multinational corporations which included Gulf Oil. Therefore, the CIA had to strike once again. In a 1970 coup, Torres was overthrown and was replaced with Hugo Banzer Suarez who had been trained at the School of the Americas in Panama. Immediately, Bolivia's universities were shut down and violent methods were carried out against leftist resistors.

In 1970, Hugo Banzer Suarez seized power, and Barbie stayed on to run his security division. In addition, Barbie continued to pocket millions of dollars from his drug enterprise and well as from his lucrative arms business. While Suarez oversaw a fast growing billion dollar drug trade, former Nazi Hugo Banzer and two top Army generals were actively involved in the trade. By the early 1970s, Bolivia controlled 80 percent of the world's coca fields, and most was exported to Colombian cartel laboratories including Barbie's Transmaritania.

In a 1980 coup, General Garcia-Meza was picked as the new Bolivian dictator. He, too, selected Barbie as head of the country's internal security division, and Delle Chiaie was picked to secure international support from Argentina, Chile, South Africa, and El Salvador. Thousands of opposition leaders were rounded up and herded into LaPaz's soccer stadium where they were killed en masse. In the mean time, the new regime reached out to get the support of the United Nations and the United States, while it ruthlessly suppressed its opponents.

The CIA files, declassified in 2001, showed that the CIA was skeptical about him and did nothing to block his extradition to France in 1983. At the same time in the United States, the GAO was conducting its second investigation into allegations that the OSS and CIA were involved in importing Nazis into the United States. In the spring of 1983, OSI Director Allan Ryan, Jr. assumed the lead in the Barbie investigation. Several months later, Ryan issued a report that clearly demonstrated that the Army had employed Barbie as an agent in Germany and had sponsored his escape from Europe. The Ryan report absolved the CIA of any wrongdoing in the Barbie case, but it exposed American intelligence activities in Austria, Germany, and Italy in the decade after 1945. Ryan also explored the Army's use of European "rat lines"from which Nazis could escape.

Several other war criminal cases followed the Barbie case. The OSI investigated Robert Jan Verbelen, a member of a Flemish SS group, and his employment by American Army intelligence in Austria and Germany. The Verbelen report received very little media attention. It gave a slap on the wrist to the CIC, concluding that it had been careless in its recruitment of agents.

While the Verblen investigation was proceeding, Barbie was tried and convicted in France. He died in a French prison hospital in 1991.

DR. JOSEF MENGELE. Mengele joined other doctors in the task of choosing employable Jews to operated the industrial machines and sending others to the gas chambers. The inmates were paraded before Mengele who called either "Right!" (work squads) or "Left!" (gas chambers). The only first-hand evidence on these experiments comes from a handful of survivors and from a Jewish doctor, Miklos Nyiszli, who worked under Mengele as a pathologist. Mengele subjected his victims -- twins and dwarfs aged two and above -- to clinical examinations, blood tests, X rays, and anthropological measurements. In the case of the twins, he drew sketches of each twin, for comparison. He also injected his victims with various substances, dripping chemicals into their eyes, apparently in an attempt to change their color.

He then killed them himself by injecting chloroform into their hearts, so as to carry out comparative pathological examinations of their internal organs. Mengele's purpose, according to Dr. Nyiszli, was to establish the genetic cause for the birth of twins, in order to facilitate the formulation of a program for doubling the birthrate of the ‘Aryan' race. The experiments on twins affected 180 persons, adults, and children.

Mengele also carried out a large number of experiments in the field of contagious diseases -- typhoid and tuberculosis -- to find out how human beings of different races withstood these diseases. He used Gypsy twins for this purpose. Mengele's experiments combined scientific research with the racist and ideological aims of the Nazi regime which made use of government offices, scientific institutions, and concentration camps.

In 1985, the Mengele investigation created attention as sightings of the German doctor were reported throughout South America. While the case appeared to be solved with the discovery of Mengele's remains in July of that year in Brazil, questions still lingered concerning his escape from Europe and his postwar activities. Once again, American intelligence, especially the CIA, came under close scrutiny. Another OSI investigation cleared the agency and all other American intelligence organs of any connection with Mengele.

WERNER VON BRAUN. Von Braun was the most famous scientist recruited under Paperclip was Werner von Braun who had developed the German V1 and V2 rockets as well as conducting research on advanced fuel, motors, and wind tunnels. In 1948, von Braun's visa application was rewritten so that his record with the Nazi government was obliterated.

SIGFRIED RUFF AND HUBERT STRUGHOLD. Ruff was one of several medical doctors acquitted at the Nuremberg trials because the circumstantial evidence was not sufficient. He had been the director of the Luftwaffe's Department of Aviation Medicine at the Experimental Institute for Aviation. Strughold was his close associate who directed the Luftwaffe's Aeromedicine Institute.

In June 1946, Colonel Harry Armstrong, an American Air Force surgeon, who had done experiments in freezing temperature as carbon dioxide tests, included Strughold, Ruff and 20 other Nazi doctors on a list to be brought into the United States. However, Ruff was arrested during the Nuremberg trials and only Strughold entered the United States and was assigned to Randolph Air Force Base in San Antonio, Texas. Strughold helped recruit other Nazis in Germany and Austria, and in 1949 he was assigned to head the Department of Space Medicine at the School of Space Aviation in 1949. He oversaw experiments in weightlessness, decompression, and the lack of oxygen. Strughold retired in 1968 and died in 1986.

HERMANN BECKER-FREYSENG, OSKAR SCHROEDER AND KONRAD SCHAFFER. Becker-Freyseng and Schroeder were two other German doctors whom Armstrong had hoped to bring to the United States, but they were convicted at Nuremberg. When Strughold entered the United States in 1947, he was immediately placed in a government protection plan by the Joint Chiefs of Staff.

The INS opened the Strughold case in the mid-1970s, but the investigation came to an abrupt halt when a Texas congressman persuaded the INS that his records had been thoroughly checked out when he entered the United States three decades earlier. But his records did not contain information on whether he had been asked whether he had been involved in conducting freezing experiments in Nazi Germany. Nazi records, however, did indicate that he had attended a 1942 conference on human tests conducted in freezing temperatures.

When Ruff was released after his acquittal at Nuremberg, a second effort was made to lure him to the United States. But news reporter Drew Pearson, upon hearing the news, threatened to tell President Truman who had just issued an executive order banning Nazis from entering the country.

Schreiber was another Operation Paperclip recruit. He had been the chief of the Department of Science and Health in Nazi Germany, and his specialty was infectious diseases where he conducted human epidemic experiments which resulted in the deaths of prisoners. Schreiber was captured by the Soviets during World War II, and after the war he went to work for the East German government. He was placed on a list of 200 persons suspected of medical war crimes and was identified by colleagues as one who had conducted concentration camp experiments involving deadly bacteria. In 1948 Schreiber entered West Berlin and was brought to Randolph Air Force Base in Texas. Four years later he and his family were secretly taken to Argentina where he lived with other Nazis.

Schafer and Becker-Freyseng were instrumental in Germany in conducting experiments to prolong the survival of pilots who had been downed over the Atlantic Ocean. When they conducted experiments at Dachau, they first debated whether they should use Jews, communists, or Gypsies. Schaeffer ordered salt water forced down the throats of the prisoners. Others were given berkatit which killed most of the subjects within a couple of weeks. Still others had a sample of their liver tissue extracted without anesthetic. In the end, all of Schaeffer's guinea pigs died. After Becker-Freyseng came to the United States, he was arrested and sent to Nuremberg for trial. Yet the United States Air Force published an article on his research on aviation. While a part of the German SS, he also conducted research on concentration camp refugees. He was praised as an honorable and just person, and nothing was mentioned about his part in genocide.

SIGMUND RASCHER. Another Dachau Nazi was Sigmund Rascher who had performed high altitude experiments with prisoners. While in Germany, he developed a chamber which simulated an altitude of 68,000 feet. Rascher placed 80 subjects in the chamber for one-half hour. Deprived of oxygen, most died within an hours, and the hours were thrown into icy water and also died. What caught the interest of American intelligence was the fact that Rascher had actually filmed his experiments.

KURT PLOTNER, EUGENE VON HAAGEN, AND BORIS PASH. Another big catch by the United States was Kurt Plotner who was a Nazi physician assigned to the concentration camp at Dachau. Plotner took Polish and German prisoners and injected them with mescalin in order to evaluate their schizophrenic behavior. American intelligence also landed Dr. Eugene von Haagen who had been a colleague of Pash. Von Haagen had headed the Nazis' biological weapons unit during World War II. Boris Pash recruited him into the Paperclip program where he used his expertise in germ warfare research for five years. Von Haagen had worked with Kurt Blome in Germany, and in the late 1940s he was tried at Nuremberg for medical war crimes which included infecting hundreds of prisoners with tuberculosis and bubonic plague. After he was acquitted, Blome was recruited by the CIA and was assigned to the Paperclip Program at Camp King near Washington D.C. Soon thereafter, he was arrested by French authorities, convicted of war crimes, and sentenced to 20 years in prison.

Meanwhile, Pash was appointed head of Program Branch/7 (PB7) where he conducted more research into interrogation techniques. He was responsible for planning kidnappings as well as the interrogation and murder of suspected double-agents. Pash researched the works of Nazi doctors whose efforts at Dachau helped induce confessions from prisoners. He studied the effects which psychotherapy, hypnosis, electro-shock, and speech-inducing drugs had on Dachau inmates.

In 1948, the CIA became part of the newly created military Medical Intelligence Organization. The agency was put in charge of "foreign, atomic, biological, and chemical intelligence, from medical science's point of view." The Scientific Intelligence Committee and the Joint Medical Science Intelligence Committee authorized the CIA engaged in "body-snatching," collecting 1,500 corpses -- some with and others without the permission of relatives -- and taking tissue and bone samples from people who had been exposed to fallout from nuclear tests in the Nevada desert.

KRUNOSLAV DRAGONOVIC. The CIC also recruited Krunoslav Dragonovic to help Nazis escape from Europe to South America -- primarily to Bolivia, Argentina, Chile, Peru, and Brazil. He had supervised a Yugoslavian concentration camp where hundreds of thousands of Jews were incarcerated in the early 1940s. A Roman Catholic priest, Dragonovic was working for the Red Cross in the Vatican where he helped hundreds of Nazi agents escape Europe for South America. Perhaps the most notorious Nazi whom he helped escape was Croatian dictator Ante Pavelic who had supervised the genocide of between 200,000 and two million Serbs. Others included SS Colonel Hans Rudel who fled to Argentina and eventually headed Peron's air force; Dr. Willi Tank who was the main architect of Luftwaffe planes; Dr. Carl Vaernet who had overseen experiments on homosexuals -- castrating gay men and replacing their testicles with iron balls.

BARON VON BOLSCHWING. In 1945, the CIC hired Baron Otto von Bolschwing who had been the right-hand man for Adolf Eichmann in Nazi Germany. The CIC used von Bolschwing to learn of his methods in recruiting, interrogating, and hiring SS officers. After spending nine years in Europe, von Bolschwing was brought to the United States where he worked for the CIA in the area of interrogation. His expertise involved using a variety of torture methods on subjects -- bullwhips, placing needles under fingernails, drugging victims, and attaching electrodes to theirs testicles and nipples.

The American intelligence community also launched Operation Lusty after the war concluded. The purpose was to gather scientific papers, blueprints, and experimental models hidden away in German mines, caves, and castles, and some were even buried underground. The confiscation of German files was the responsibility of the "T-Forces" of the OSS. Colonel Donald Putt of the Allied Technical Information Service gathered prototypes of future airplanes.

HUBERT VON BLUCHER. One of the fugitives recruited by the American intelligence establishment was heroin smuggler Hubert von Blucher, the son of the German ambassador. He had been trained by the German military intelligence division in the 1920s and later served in army during World War II. In the latter stages of the war, von Blucher flew for the Luftwaffe, smuggling Nazi gold bullion out of the country. Three years after the war ended, von Blucher escaped to Argentina and tuned over German marks totaling $80 million. Subsequently, he helped organize the National Socialist Party of Argentina.

WALTER BECHER. The most influential Nazi spy to be recruited by American intelligence was Dr. Walter Becher. He had joined the Nazi Party in 1931 during the early days of the Hitler regime. He was one of Hitler's Brownshirts and worked in Goebbels' Propaganda Ministry where he disseminated information advocating the purge of all Jews. He came to the United States in the early 1950s and soon built a political machine. He received the support of some leading American politicians who included Prescott Bush, Albert Gore, Pat McNamara, Strom Thurmond, Thomas Dodd, and Stuart Symington. Becher immediately established a nation-wide reputation as a leader in the anti-communist crusade.

SHIRO ISHII. Meanwhile in Japan, the search continued for experts who could provide more information to aid American intelligence units in the area of torture and murder. They found Shiro Ishii who had been the head of the Japanese Army's bio- chemical division. In exchange for his expertise in areas of torture, American intelligence units were able to bring him into the United States. Ishii had conducted experiments on Chinese, Soviet, and American prisoners-of-war in Manchuria during World War II. His experiments consisted of injecting prisoners with tetanus, typhoid fever, plague, and syphilis. Additionally, he performed "live autopsies" on prisoners so he could evaluate the affect of diseases on humans. When he arrived in the United States, Ishii lectured at Fort Detrick, Maryland and worked as a researcher at Bethesda Hospital in Maryland.

 

COMPENSATING HOLOCAUST SURVIVORS

 

In March 1998, the first lawsuits were filed by Holocaust survivors against corporations which corroborated with Nazi Germany during World War II. In the summer of 1998, Volkswagon created a $12-million fund to compensate individuals who worked as forced laborers for the car maker during World War II. Within a year, Volkswagen paid about 220 workers an undisclosed sum.

In June 1999, over a dozen large German corporations, including DaimlerChrysler and BMW, announced the creation of a $1.7-billion fund for hundreds of thousands of people forced into slave labor during World War II. Attorneys representing Holocaust survivors denounced the plan as financially inadequate and expressed outrage that the companies presented it publicly without engaging in negotiations which they had agreed to do at a meeting in Washington last month.

The corporations emphasized that the fund would be financed only if they receive long-term protection from lawsuits related to Nazi government actions. The German-based companies acknowledged that they had "moral responsibility" because of their cooperation with Nazi Germany.

They said that payments would go to individuals and heirs of individuals who:

Were forced to labor for German companies: people deported to concentration camps and made to work under conditions of imprisonment, confinement to a ghetto area or similar situations of involuntary confinement.

Suffered substantial material loss because of racial discrimination if a German company directly contributed to their loss or sought to profit from their loss.

Were otherwise personally harmed as a result of Nazi government oppression in situations in which German companies were involved.

In addition to Daimler Chrysler and BMW, other companies included: Allianz, one of the world's biggest insurance companies; BASF, the large petrochemical company; Bayer, the pharmaceutical giant; DeGussa Corporation, which worked with the German government on production of Zyklon B gas used in World War II gas chambers; Deutsche Bank; Dresdner Bank; Siemens, an electronics manufacturer; and Thyssen-Krupp, a major arms manufacturer in World War II.

Many of the companies were sued a year before in a massive class action in New Jersey. The companies contended that the suits were barred by statutes of limitations, but hearings were rescheduled for late 1999. A large German construction firm that was not part of the consortium was sued in Los Angeles by several slave laborers who survived the Holocaust.

The United States and Germany reached a settlement in December 1999. Negotiators agreed on a sum of $5.2 billion fund to compensate the forced and slave laborers in Nazi Germany. The amount was close to the $5.7 billion demanded by lawyers in a class action lawsuit than to the $4.2 billion previously offered by the German government and companies that used forced labor during World War II. At first, the German industry pledged $2.6 billion, and the German government offered to contribute $1.6 billion. And originally the plaintiffs had demanded between $20 billion and $30 billion, but they scaled that demand down in the course of negotiations. Since the end of the war, Germany has paid about $60 billion to Holocaust victims. However, this was the first time that compensation will go to forced and slave laborers.

Germany already made some $60 billion in payments for war crimes, but never compensated the estimated 12 million enslaved and forced workers. Between 1.5 million and 2.3 million people still alive would be eligible for compensation, mostly non-Jews living in Eastern Europe. American officials estimated that about 240,000 former slave laborers survive. About half that number are Jews who were held in concentration camps. Others were mostly non-Jews brought from the Soviet Union, Poland, and other countries east of Germany and put to work making war goods and other products for the Nazi regime. United States officials estimated that about 100,000 victims are Americans.

Five months later, the United States Chamber of Commerce announced that it would solicit donations from American corporations, such as Ford and General Motors, which were involved. The chamber decided to establish the fund after being approached by the Clinton administration and a number of major American corporations that have been threatened with lawsuits by survivors and their heirs. Both Ford and General Motors acknowledged benefitting from slave labor during the war.

The New York Times (April 26, 2000) reported that the fund was led by Craig Johnstone, a senior vice president of the chamber, a former ambassador to Algeria under President Ronald Reagan, and a former director of the State Department's office of policy and plans under Clinton's Secretary of State Madeleine Albright.

After nearly two years of negotiations, American and European officials agreed in July 2000 to a $5 billion settlement to award over one million more survivors of Nazi enslavement and forced labor. This was the final step of a program to rectify the crimes of the Third Reich and will pay as much as $7,500 to each person. Under the terms of the agreement, each of the national signatories -- the United States, Germany, Poland, Russia, Ukraine, Belarus, and the Czech Republic -- established its own "partner organization" for addressing claims and have some latitude in disbursing its share of the compensation funds. That means a country's panel could recognize individual claims of particular hardship by forced laborers by paying out more than the envisioned $2,500 payment, but it would have to make up the difference by allotting less to other victims.

After more than two years of often bitter negotiations, the German Parliament approved a motion today opening the way for payment of $4.5 billion to laborers forced to work by the Nazi regime. It was hailed as the closing chapter of a long and difficult process of dealing with the crimes of Hitler. Half of the money was paid by a total of more than 6,000 German companies, the more famous of which were DaimlerChrysler, Bayer, Bertelsmann, Deutsche Bank, Hugo Boss, Manesmann, and Allianz. The other half was paid by the German government.

The payments ranged from about $7,000 each to people forced to work in slave labor camps or ghettos to about $2,000 to those forced to work in factories. The first payments went to 10,000 Jewish slave and forced laborers in 25 countries. In all, payments were allocated to about 160,000 surviving Jewish laborers in 40 countries. (New York Times, May 31, 2001)

By mid-2001 -- three years after the international commission was created -- the leading German insurance company still not paid a single claim. Instead, a consortium of German insurance companies took steps to make collection more difficult, including filing lawsuits in California and Florida to try to contest statutes designed to make collection easier. The companies also had not honored a commitment to provide a complete listing of potential unpaid policyholders, according to insurance regulators and Jewish advocates. (Los Angeles Times, July 9, 2001)

Allianz, the largest German insurance company, provided only 380 names so far out of a list of 1.5 million policies, according to commission records. The companies said that producing the lists would be overly burdensome and in some instances would violate European privacy laws. But American officials said that the lists were vital to the process of settling the insurance claims.

Five insurers -- Allianz of Germany, AXA of France, Winterthur and Zurich of Switzerland, and Assiscurazioni Generali of Italy -- agreed to fund the commission in return for receiving a "safe harbor" from litigation in the United States. Several German insurance companies that declined to participate in the international commission, as well as the German Insurance Association, were able to impede the process by challenging the constitutionality of the California and Florida laws.

The firms also attempted to get a credit for at least $25 million they gave to the International Commission on Holocaust Era Insurance Claims for operating expenses. The reimbursement was to come from funds that are supposed to go toward paying policyholders. (Los Angeles Times, July 9, 2001)