· Ben Aris in
· The Guardian,
Rumours of a link between
George Bush's grandfather, the late
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 controversy.
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
Remarkably, little of Bush's dealings with
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
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 world.
Thyssen owned the largest steel and coal company in
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
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
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
One of the first jobs
The bank was set up by Harriman and Bush's father-in-law to provide a
August Thyssen, the founder of the dynasty had
been a major contributor to
By the time Fritz Thyssen inherited the business
empire in 1926,
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
There was nothing illegal in doing business with the Thyssens
throughout the 1930s and many of
There is no dispute over the fact that the
Erwin May, a treasury attache and officer for the
department of investigation in the
May wrote in his report of
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 through UBC.
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 Germany.
Within a few weeks, Homer Jones, the chief of the
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
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
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
But the ownership of the CSSC between 1939 when the Germans invaded
"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,
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 others.
The two Holocaust survivors suing the
Kurt Julius Goldstein, 87, and Peter Gingold, 85,
began a class action in
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 family."
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
The lawyers also filed a motion in
The petition to
The case is built around a
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."
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
"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?" he said.
"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 Petersburg.
"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
"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
Loftus said Prescott Bush must have been aware of what was happening in
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 Right.
In the article, Buchanan, who has worked mainly in the trade and music press
with a spell as a muckraking reporter in
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
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
However, one of the country's oldest Jewish publications, the Jewish Advocate, has aired the controversy in detail.
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 business.