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RealAu­dio
NB: This RealAu­dio stream con­tains FTRs 294 and 295 in sequence. Each is a 30-minute broadcast.

1. Bring­ing For the Record’s cov­er­age of Ger­man cor­po­rate machi­na­tions up to date, this broad­cast begins with infor­ma­tion sup­ple­ment­ing a major topic of dis­cus­sion in the sec­ond half of FTR-292. As the global energy indus­try is dereg­u­lated, energy cor­po­ra­tions are cross­ing national bound­aries. One of the fastest grow­ing elec­tric­ity com­pa­nies is the Ger­man giant Eon. The sec­ond largest elec­tric­ity gen­er­at­ing com­pany in the world, it is cur­rently expand­ing into the United States, where it plans to estab­lish a sig­nif­i­cant pres­ence. As Eon began divest­ing itself of assets in order to com­ply with U.S. reg­u­la­tory statutes, the nature of some of its busi­nesses proved to be more than a lit­tle inter­est­ing. One of its main cor­po­rate sub­sidiaries was the Degussa chem­i­cal firm. (“Eon to sell Off assets to Smooth Deal on Pow­er­Gen” by Andrew Tay­lor and Uta Har­nischfeger; Finan­cial Times; 4/10/2001; p. 18.)

2. The Degussa firm is part of the old I.G. Far­ben com­plex of chem­i­cal firms that com­prised the back­bone of Hitler’s polit­i­cal, indus­trial and mil­i­tary sup­port dur­ing World War II. Degussa, in which I.G. had a sig­nif­i­cant cap­i­tal par­tic­i­pa­tion, was a dom­i­nant player in the Degesch firm. Degesch (an I.G. sub­sidiary) man­u­fac­tured the Zyk­lon B gas used in the gas cham­bers in the con­cen­tra­tion camps. Degussa was involved with the fund­ing of the SS, con­tribut­ing to the Himm­lerkreis or “Himmler’s Cir­cle of Friends.”

3. In addi­tion, Degussa sub­sidiary NUKEM was involved with the traf­fick­ing of nuclear mate­r­ial to Iraq, as well as other coun­tries attempt­ing to man­u­fac­ture nuclear weapons. (For more on NUKEM, see Mis­cel­la­neous Archive Show M-8.) “Two trans­ac­tions that spring height­ened fears that Iraq intended to use the Osirak reac­tor to pro­duce bomb-grade plu­to­nium. An Ital­ian com­pany, in a semi-clandestine deal, sold Iraq six tons of depleted ura­nium pur­chased from the West Ger­man nuclear con­sor­tium NUKEM. Fear­ing that NUKEM might not deliver the ura­nium if they knew if was intended for Iraq, the Ital­ians claimed it was for domes­tic use in Italy. But they needn’t have wor­ried about NUKEM’s scru­ples. The con­sor­tium was a wholly owned sub­sidiary of the Ger­man chem­i­cals giant Degussa, which had invented and man­u­fac­tured Zyk­lon B, the pow­er­ful cyanide gas that streamed out of the show­er­heads in Hitler’s death camps, killing mil­lions of Euro­pean Jews. Degussa had also played a key role in the Nazi effort to build an atom bomb, stopped only when its Oranien­burg works near Berlin were flat­tened by U.S. bombers in 1945. That same year, the Third Reich was going up in flames, Degussa’s chair­man, Her­mann Schlosser, donated 45,000 reichs­marks to Hitler’s SS. Thirty-five years later Schlosser was still on the Degussa board, and in 1987 he was awarded the Ger­man Fed­eral Merit Cross for his ser­vices to indus­try. One of Schlosser’s ser­vices was ship­ping nuclear equip­ment and mate­ri­als to almost every devel­op­ing nation that was known to have a clan­des­tine bomb pro­gram. Another was open­ing the vast Iraqi mar­ket to Ger­man firms. His readi­ness to sup­ply nuclear mate­ri­als to both India and Pak­istan had impressed on Sad­dam Hus­sein that this was a man he could do busi­ness with.” (The Death Lobby: How the West Armed Iraq; Ken­neth Tim­mer­man; Copy­right 1991 [HC]; Houghton Mif­flin Com­pany; p. 70.)

4. Mr. Emory has focused on a suit that has been filed against IBM over its role in expe­dit­ing the oper­a­tions of the Third Reich, the liq­ui­da­tion of the Jews, in par­tic­u­lar. The spec­u­la­tive line of inquiry pur­sued in con­nec­tion with the law­suit con­cerns the pos­si­bil­ity that the IBM suit and other Holo­caust related law­suits may con­sti­tuted a bar­gain­ing chip in the maneu­ver­ing sur­round­ing cor­po­rate globalization.

5. Recently, the IBM suit was dis­missed. “The biggest remain­ing obsta­cle is a sep­a­rate New York law­suit against Ger­man banks over their role in steal­ing Jew­ish prop­erty under the Nazis. Michael Haus­feld, the lawyer who brought the IBM suit said ‘The main rea­son we accel­er­ated our dis­cus­sions was to remove any obsta­cle that can be used as an excuse by the Ger­mans to avoid pay­ing. We aren’t going to give them that oppor­tu­nity.’” (“End of Suit Against IBM Removes Legal Hur­dle to a Holo­caust Deal” by John Authers, Yvonne Ester­hazy and Richard Wolffe; Finan­cial Times; 3/30/2001; p. 16.)

6. In past dis­cus­sion of these Holo­caust law­suits, Mr. Emory has noted that the law firm of Wilmer, Cut­ler and Pick­er­ing has been lob­by­ing on behalf of Deutsche Telekom’s pur­chase of Voic­eS­tream. Wilmer, Cut­ler & Pick­er­ing has rep­re­sented Ger­man firms and Swiss banks in Third Reich-related suits and it employs Matthias Wiss­man, the trea­surer of the scandal-plagued CDU. Wilmer, Cut­ler and Pickering’s efforts have been suc­cess­ful, sug­gest­ing at least the pos­si­bil­ity that a quid pro quo may have been effected. One won­ders if the suc­cess­ful res­o­lu­tion of the law­suits and the estab­lish­ment of “legal peace‰ with the drop­ping of the suit against IBM may have involved an agree­ment by the U.S. gov­ern­ment to accede to the wishes of Deutsche Telekom (effec­tively con­trolled by the Ger­man government.)

7. “US telecom­mu­ni­ca­tions reg­u­la­tors will approve Deutsche Telekom’s $23.5bn acqui­si­tion of Voic­eS­tream, per­haps as early as this week­end but are strug­gling with the detail of their con­sent order which may delay final­iza­tion for a week. The deal has been one of the most polit­i­cally con­tentious in recent years because of the Ger­man government’s 58 per cent stake in Telekom. Crit­ics, led by Sen­a­tor Ernest Hollings, have argued U.S. law for­bids for­eign gov­ern­ment own­er­ship of U.S. tele­com licenses . . . . The two Repub­li­can FCC com­mis­sion­ers, includ­ing Michael Pow­ell, chair­man, are believed to have given their assent to the merger. The Democ­rats are await­ing the new legal analy­sis before giv­ing their approval . . . . At the cen­ter of the machi­na­tions within the FCC is Mr. Hollings‚ con­tention that the Com­mu­ni­ca­tions Act of 1934, which gov­erns all license trans­fers, bars for­eign gov­ern­ment own­er­ship.” (“Watch­dog to Clear Telekom Takeover of Voic­eS­tream” by Peter Spiegel; Finan­cial Times; 4/5/2001; p. 1.)

8. Another key cor­po­rate acqui­si­tion of an Amer­i­can cor­po­ra­tion by a for­eign firm con­cerns ASM Lith­o­g­ra­phy Hold­ings pur­chase of Sil­i­con Val­ley Group. ASM Lith­o­g­ra­phy has strong con­nec­tions to the Ger­man firms Zeiss and Leica, both of which have sold strate­gic tech­nol­ogy to coun­tries hos­tile to the United States. (See Mis­cel­la­neous Archive Show M-11, FTR-87.)

9. Tins­ley Lab­o­ra­to­ries, which makes vital opti­cal equip­ment for Amer­i­can spy satel­lites, is a divi­sion of SVG. “The US Depart­ment of Defense has indi­cated it will agree to the sale of Sil­i­con Val­ley Group (SVG) to a Dutch com­pany, remov­ing a key hur­dle from a $1.6bn deal delayed for more than three months because of national secu­rity con­cerns. Senior Pen­ta­gon offi­cials, who met SVG exec­u­tives last week, are under­stood to have agreed that export con­trols nego­ti­ated with the com­pa­nies will meet the con­cerns raised by crit­ics that the deal would put vital tech­nolo­gies in for­eign hands. Defense offi­cials have given warn­ing, how­ever, that there may be minor adjust­ments in the final terms still being nego­ti­ated with other gov­ern­ment agen­cies. The sale of the rel­a­tively small SVG to Netherlands-based ASM Lith­o­g­ra­phy has gen­er­ated intense polit­i­cal con­tro­versy on Capi­tol Hill . . . . A U.S. gov­ern­ment offi­cial said the cur­rent agree­ment required ASM to invest in Tinsley’s oper­a­tions in the U.S. for a set period, per­haps seven years. It also placed lim­its on the trans­fer of Tinsley’s assets and per­son­i­fied aboard for the same period.” (“Pen­ta­gon Backs Sale of Sil­i­con Val­ley Group” by Peter Spiegel; Finan­cial Times; 4/10/2001; p. 1.)

10. The broad­cast revis­its a point of spec­u­la­tion raised in FTR-272. ASM Lithography’s full name is “ASM Lith­o­g­ra­phy Co. Lim­ited.” The firm is based in the Nether­lands, the base of a major branch of the Thyssen indus­trial fam­ily. The Thyssen inter­ests, in turn, are a major ele­ment of the Bor­mann organization.

11. The dis­cus­sion high­lights the Thyssen-Bornemisza branch of the fam­ily and their oper­a­tions in the Nether­lands. “Hein­rich Thyssen-Bornemisza runs his pri­vate Dutch-based invest­ment group from Lugano, Switzer­land, and his cousin, count Fed­erico Zichy-Thyssen, grand­son of old Fritz Thyssen, exer­cises con­trol over Thyssen A.G. from his base in Buenos Aires.‰ (Mar­tin Bor­mann: Nazi in Exile; Paul Man­ning; Copy­right 1981 [HC]; Lyle Stu­art Inc.; ISBN 0–8184-0309–8; p. 237.)

12. “Thus, the two prin­ci­pal fig­ures of the Thyssen for­tune through­out the years pre­ced­ing and dur­ing the Third Reich were Fritz and Hein­rich. Nei­ther liked the other, so they agreed to divide their inher­i­tance into two sep­a­rate spheres of inter­est, coop­er­at­ing only when it was nec­es­sary. Fritz’s cir­cle of inter­est became the Ger­man hold­ings, Thyssen Gew­erkschaft A.G., Fam­inta A.G. Hein­rich devoted him­self largely to hold­ings out­side of Ger­many, Bank voor Han­del en Scheep­vaart, Rot­ter­damsche Trustees‚ Kan­toor, N.V. Handels-en-Transport Maatschap­pij ‘Vul­can,‚ Rot­ter­dam, Press and Walzw­erk A.G., August Thyssen Bank. Hein­rich Thyssen became Baron Hein­rich Thyssen-Bornemisza when he mar­ried into Hun­gar­ian nobil­ity. In this way he had acquired Hun­gar­ian nation­al­ity, which gave him dual nation­al­ity. He also changed his res­i­dence to Switzer­land when Ger­man pres­sures became too alarm­ing, and in time acquired Swiss nation­al­ity.” (Ibid.; pp. 246–7.)

13. Next, the pro­gram high­lights the Thyssen-Bornemisza hold­ings in the United States, as well as the rel­a­tive secrecy sur­round­ing its oper­a­tions in the United States. “As Count Zichy rep­re­sents the largest share­holder group in Thyssen A.G. from his home in Buenos Aires, the young baron directs his inter­est from his Villa Favorita in Lugano. One such hold­ing in the United States is Indian Head, Inc., with Amer­i­can cor­po­rate head­quar­ters at 1200 Avenue of the Amer­i­cas, New York City. Thyssen Inc. has its U.S. offices far­ther down this avenue at num­ber 1114, in the W.R. Grace & Co. build­ing. Indian Head is a wide-ranging man­u­fac­tur­ing con­glom­er­ate, with 42 plants in the United States and 10,400 employ­ees. It enjoys annual net sales of close to $604 mil­lion. For an indus­trial cor­po­ra­tion of such size it has a remark­ably low pro­file. It dis­trib­utes no annual report˜‘We are a pri­vately held cor­po­ra­tion.‚ Like Thyssen Inc., in the United States, it has no back­ground own­er­ship file with the SEC because it has never had to go pub­lic. When Thyssen bought Budd Man­u­fac­tur­ing for $275 mil­lion, it was in cash, and there­fore there was no require­ment for cor­po­rate dis­clo­sures to the Secu­ri­ties and Exchange Com­mis­sion. Still, good will is cher­ished, and Ger­man indus­tri­al­ists and bankers con­tinue to strive to project a friendly Ger­man image in the United States. One note­wor­thy announce­ment, made from Wash­ing­ton, D.C., in March 1979 was that 57 price­less Old Mas­ter paint­ings from the col­lec­tion of Baron Thyssen-Bornemisza would be taken on a tour of the United States in 1979 and 1980. This col­lec­tion of great mas­ter­works is said to be˜except for the Royal Col­lec­tion of the queen of England˜the great­est pri­vate art col­lec­tion now in exis­tence. This pub­lic trav­el­ing exhibit con­sti­tuted a major achieve­ment as a pub­lic rela­tions ploy. Ever cau­tious, how­ever, no Ger­man firm under­wrote the tour; Indian head was kept out of the pic­ture. Instead, a major U.S. cor­po­ra­tion was cho­sen to under­write the mas­ter­works tour. United Tech­nolo­gies of Hart­ford, Con­necti­cut (152,000 employ­ees, 200 plants, and a world­wide mar­ket­ing oper­a­tion in power, flight sys­tems, indus­trial prod­ucts and ser­vices), agreed to under­write the cost of the ven­ture as a favor to its Ger­man friend in Lugano, Switzer­land. The project was ini­ti­ated from Lugano; the baron, after con­sult­ing with his cor­po­rate image advi­sors, agreed to United Tech­nolo­gies rather than Indian Head with its hid­den share­hold­ers. The foun­da­tion that made all arrange­ments was another pri­vately endowed, non­profit orga­ni­za­tion, Inter­na­tional Exhi­bi­tion foun­da­tion. It made the approach to United Tech­nolo­gies and also brought aboard the pres­ti­gious Andrew W. Mel­lon Foun­da­tion and the Fed­eral Coun­cil on the Arts and Human­i­ties. When the baron came to Wash­ing­ton for the offi­cial press pre­view of the tour, he arrived, trim and bouncy, and fifty-eight years of age, fit, flu­ent in French, Ital­ian, Eng­lish, and Ger­man. He expressed delight with Amer­i­can coop­er­a­tion. A speaker at the Wash­ing­ton press cer­e­monies was Hubert Faure, pres­i­dent and chief exec­u­tive of United Tech­nolo­gies Otis Group and a direc­tor of UT. He spoke warmly of his long-time friend­ship with Baron Hans Hein­rich Thyssen-Bornemisza.” (Ibid.; pp. 262–263.)

14. The pro­gram high­lights another inter­est­ing aspect of the Bor­mann organization’s influ­ence in the United States, its select use of Jew­ish busi­ness­men as front men. “It has drawn many of the bright­est Jew­ish busi­ness­men into a par­tic­i­pa­tory role in the devel­op­ment of many of its cor­po­ra­tions, and many of these Jews share their pros­per­ity most gen­er­ously with Israel. If their pro­pos­als are sound, they are even pro­vided with a spe­cially dis­pensed ven­ture cap­i­tal fund. I spoke with one Jew­ish busi­ness­man in Hart­ford, Con­necti­cut. He had arrived there quite unknown sev­eral years before our con­ver­sa­tion, but with Bor­mann money as his lever­age. Today he is more than a mil­lion­aire, a quiet leader in the com­mu­nity with a cer­tain share of his prof­its ear­marked, as always, for his ven­ture cap­i­tal bene­fac­tors. This has taken place in many other instances across Amer­ica and demon­strates how Bormann’s peo­ple oper­ate in the con­tem­po­rary com­mer­cial world, in con­trast to the fan­ci­ful non­sense with which Nazis are described in so much ‘lit­er­a­ture.’” (Ibid.; p. 227.)

15. The broad­cast con­cludes with a look at a recent arrange­ment that would per­mit Allianz (an insurer), Dres­d­ner Bank, Munich Rein­sur­ance, and HypoVere­ins­bank to over­lap and increase their assets. “The unrav­el­ing of the intri­cate web of cross-shareholdings that has shaped Ger­man busi­ness for decades looks one step closer as Allianz, the Munich insurer, pre­pares a $21.4bn bid for Dres­d­ner, the country’s third largest bank. If suc­cess­ful, the deal would allow com­plex cross-shareholdings between Germany’s largest insur­ers and banks to be sim­pli­fied, unwind­ing rela­tion­ships cre­ated after the Sec­ond World War that have tied up cap­i­tal to the detri­ment of share­hold­ers. As such, it could be the first of a series of deals to unlock bil­lions of euros that have been lying unused in port­fo­lios for decades. It would also cre­ate two giant ban­cas­sur­ance groups in Europe’s largest mar­ket, an intim­i­dat­ing prospect for other finan­cial ser­vices groups in Europe. Domes­ti­cally it would pro­vide dis­tri­b­u­tion net­works for Germany’s two largest insur­ers, enabling them to sell pen­sions and mutual funds to savers. At present, the Allianz fam­ily of banks has three mem­bers: the Munich insur­ance group owns 21.4 per cent of Dres­d­ner, 17.4 per cent of HypoVere­ins­bank, the country’s sec­ond largest, and 5.6 per cent of Deutsche Bank, the largest. All three of them also own stakes in Allianz. The pro­posed deal would draw in another insurer that also has rela­tion­ships with the three banks: Munich Re, the world’s biggest insurer and another pow­er­house in Germany’s Indus­trial pan­theon. It owns 5.9 per cent of Dres­d­ner, 5 per cent of HypoVere­ins­bank and a smaller stake in Deutsche bank˜each of which has stakes in Munich Re. A four-way swap of the cross-shareholdings between Allianz, Munich Re, Dres­d­ner and HypoVere­ins­bank would allow Allianz to bid for the remain­ing shares in Dres­d­ner it does not own. It would also increase the stake held in HypoVere­ins­bank by Munich Re, cement­ing their part­ner­ship. This would cre­ate not one but two ban­cas­sur­ance groups˜each offer­ing a range of finan­cial ser­vices.” (“Ger­many Unwrapped” by Tony Major and John Will­man; Finan­cial Times; 3/30/2001; p. 14.) (Recorded on 4/22/2001.)