Selling to the Enemy: American Corporations Profiting from the Other Side of the War

_{Image © Austin Cline
Original Poster: Library of Congress
Click for full-sized Image}

Politicians have been expressing shock that a true-blue American company like Halliburton would "take the money and run" by moving corporate headquarters to Dubai after fleecing the American people for billions in no-bid contracts. I suspect that the only politicians who feel this way are the ones who are jealous at not having received campaign donations from Halliburton and now likely won't have the chance.

The American citizens, who will never be offered "contributions" from a company like Halliburton, have other reasons to be concerned: Dubai appears to be a prime location for transferring banned, "dual use" exports to countries not supposed to receive them. These are products which can be used to produce nuclear, chemical, and biological weapons. Dubai buys far more than it keeps, so where is all the extra material going? The U.S. government has its suspicions, but Dubai is too much of an ally for those suspicions to be voiced too loudly.

What's truly surprising about all of this is how surprised people seem to be. None of this is new — American corporations have been trading with America's enemies for as long as they have been able. They are corporations first and Americans second. A corporation's ultimate allegiance is to the bottom line and the pursuit of profit, not to American liberty or justice. American corporations have a long history of sacrificing the long-term interests of the environment, their own workers, and even the economy for the sake of the short term and the profits of the next quarter.

The Ford Motor Corporation is regarded as about as American as a company can be, but they had few qualms about trading with Nazi Germany. By September, 1939, Ford's manufacturing plants in Germany were the second largest producer of trucks for the German Wehrmacht. According to U.S. intelligence documents, "of the 350,000 trucks which the motorized German army possessed in 1942, 100,000 to 120,000 were Ford-built."

The Nazi Blitzkrieg that wrecked Europe was, quite literally, built Ford tough. Ford-Werke, the German subsidiary of the Ford Motor Company in America, placed an advertisement in the Frankfurter Zeitung in January, 1941 to promote their role in the war effort. According to the ad, Ford vehicles were present for the German invasions of Poland, Norway, Holland, France, and Belgium: "German Ford vehicles were the dependable servants of the brave soldier." Some historians estimate that by the end of the war, around 60% of all the 3-ton tracked trucks used by the German military were Fords.

Compared to IBM, though, Ford was a paragon of virtue. In April, 1933, Adolf Hitler announced that a long-delayed census of the German people would occur. Although this sounds innocuous, it was not: a census gave the Nazis more accurate information about who was a Jew and where the Jews could be found. That information was worthless if it couldn't be quickly accessed and used, however — and that's where IBM enters the picture.

The importance of IBM's German subsidiary Dehomag and the IBM machines in the Nazi persecution of Jews, as well as their later extermination efforts, probably cannot be underestimated. IBM's Hollerith machines and their punch cards made it possible for the Nazis to organize and manage detailed information about who was and was not Jewish, to trace people's racial lineage, to calculate how much they owned, to track their movements, and much more.

Willy Heidinger, manager of IBM's German subsidiary Dehomag, sent a message to IBM president Thomas J. Watson in October, 1936, about plans to build massive bomb shelters to protect the Dehomag equipment, vital for the Nazis' ability to organize and control the German population. Heidinger wrote, "The authorities have approached us with demands that sufficient care should be taken to protect our plant and operations against air attack. In view of the fact that we are located close to a railway station, such demands seem justified.... [W]e believe we should recommend immediately the setting up of air raid shelters." These Nazi authorities already knew that war was coming, and now so did Watson, who authorized the construction of two massive bunkers that would protect IBM machines, cards, and operators from future Allied bombing raids.

By mid-1944, the Nazis had Hollerith Departments (Hollerith Abteilung) "installed at the main concentration camps at Mauthausen, Ravensbrüch, Flossenbürg and Buchenwald." The SS Hollerith cards included codes for the grounds for confinement (Jehovah's Witness=01, homosexuals=02, Jews=05), birth date, gender, ethnicity (Reich German=0, Ethnic German=1, Foreigner=2), labor capacity, occupation, and reason for departure (execution=3, escape=4, special treatment=6). These IBM Hollerith numbers would be tattooed on the arms of people entering Auschwitz

All of this information was sorted and tabulated to make the administration of the massive camp system possible. Dachau alone was using 24 IBM machines by the end of the war. These machines were, in many ways, both the origin of the "surveillance society" and an example of everyone's fears about what happens when powerful authoritarians have too much access to too much information about us.

It wasn't just corporations that made a killing from the Nazi killing machine, though. In October, 1942, U.S. Alien Property Custodian Leo T. Crowely issued Vesting Order 248 under the Trading with the Enemy Act. All assets of the Union Banking Corporation of New York were to be seized because the company was being used as a front for "enemy nationals" and, in fact, wasn't even really a bank at all. Instead, it was just a front operation that laundered money for Germans who were funding Hitler's war machine and propaganda efforts.

The partner in the company who had been administering all Nazi investments was Prescott Bush, father of President George Herbert Walker Bush and grandfather of President George W. Bush. An investigator for the U.S. Justice Department found that Prescott's father-in-law, Bert Walker, was "one of Hitler's most powerful financial supporters in the United States." One of the Nazi-affiliated corporations whose investments Prescott Bush had been overseeing was the Hamburg-Amerika Line which, according to a U.S. Congressional investigation, had "subsidized a wide range of pro-Nazi propaganda efforts both in Germany and the United States."

Apparently, Prescott Bush had made millions of dollars for the Nazis and had gotten wealthy himself in the process. According to John Loftus, former United States Justice Department Nazi war crimes investigator and president of the Florida Holocaust Museum, "The Bush family fortune that helped put two members of the family in the White House can be traced directly to the Third Reich." This is not because the Bush family were secretly Nazis, but because they were openly capitalist: they went where the money was and were only interested in profit. Making money from the Nazis wasn't immoral because there is no such thing as "immoral" when it comes to profiting from the free market.

This long historical discursion might appear to be irrelevant, but I'm presenting it for a purpose: large American corporations were trading with and profiting from enemies even as extreme as the Nazis, so we should expect them to try to do the same with Muslim extremists as well. We shouldn't tolerate it, but we should expect it.

The real trouble is how our government is willing to tolerate it — for all the noise politicians make, they rarely do anything substantive to punish corporations which are found to be trading with enemies. Several American corporations have been caught trading with Sudan, Cuba, Iran, and Iraq (before we invaded). The fines were little more than slaps on the wrist — which is more than what companies like Ford and IBM suffered, but not enough to serve as a punishment or deterrent.

This ensures that the problems will continue: whatever conflicts the American government gets involved in, American corporations will be making a profit from both sides. They aren't on our side, they are on their own side. They won't be on our side unless we hold them accountable — or force our elected representatives to do so. Can the American people muster sufficient will to limit the power and activities of American corporations, though?


This image is taken from a World War I poster that hasn't been changed much - the tag originally said "Speicial Delivery, Rush." Otherwise, the text is the same. I added a few symbols, of course.