Introduction: Presenting some of the history and functional aspects of the I.G. Farben chemical cartel, the Bayer pharmaceutical firm, in particular. Growing out of the merger of Germany’s top chemical and pharmaceutical firms at the end of World War I, the I.G. Farben company and its post World War II successor companies are at the very epicenter of the history of twentieth century industry. Unfortunately, they have been responsible for a great deal of destruction, both as the backbone of Hitler’s war production and as the marketers of drugs that have done great damage to humanity.
Much of the first side of the program highlights Bayer’s frankly suspicious decision to retain control of its pharmaceutical division five days before the first anthrax attacks. After dropping 30% in value, the firm’s stock increased 33% after the anthrax attacks—Bayer is the manufacturer of Cipro, the treatment of choice for anthrax infection. An equally suspicious gambit was Bayer’s decision to continue to sell a drug used to treat hemophilia, even after it was evident that the drug (derived from blood plasma) was infected with HIV.
A major portion of the broadcast is devoted to analysis of the I.G.‘s role in the postwar Bormann organization. Inextricably linked with both the Bormann flight capital program and the postwar operations of the Underground Reich, I.G. Farben and its Big Three successor companies (Hoechst, BASF and Bayer) wield pivotal influence in the contemporary commercial landscape.
Program Highlights Include: The decision by Bayer to retain a company insider as head of the firm shortly before the anthrax attacks in the US; the selection of two “I.G. insiders” as heads of the Vivendi and Bertelsmann media firms (principal focal points of the series on German corporate control of the American media); the continued dominance of I.G. Farben in the post World War II French industrial economy; the Leuna refinery in the former East Germany and its central role in the CDU funding scandal (see FTRs 194, 276, 278); a review of the “Battle of Leuna” (one of the decisive aerial engagements of World War II).
1. Beginning discussion of the I.G. Farben firm, the broadcast sets forth an interesting piece of the history of the Bayer company—one of the most important elements of the I.G. Farben combine.
“Bayer’s pharmaceutical venture was even larger [than that of Hoechst]. Out of its laboratories emerged aspirin, the world’s most famous home remedy for pain and fever. Bayer was also responsible for the introduction of heroin, which it sold as a cure for morphine addiction and as a cough suppressant, especially effective in children. Later the Bayer laboratories developed methadone, in preparation for World War II, as a synthetic substitute for morphine. It was originally named Dolophine, in honor of Adolf Hitler. Today, methadone is used principally in the treatment of heroin addiction.”
2. An important (and largely overlooked) aspect of the 9/11 attacks concerns the curious maneuvering of the Bayer company. Five days before the anthrax letters were mailed (on September 18, 2001), Bayer made an interesting decision not to sell its embattled pharmaceuticals division. Of great significance in that context was its equally surprising decision to appoint a long-time company insider as the head of the division, in defiance of what had been forecast by investment analysts. As will be seen later, the decision to retain a longtime Bayer operative as head of the pharmaceuticals branch is consistent with Bayer’s status as one of the core companies of the Bormann organization.
“Defying expectations, Bayer A.G. said today that it would not sell its embattled pharmaceuticals unit after all, and it named a longtime executive, not a fresh face from outside the company, to succeed its chief executive, Manfred Schneider. Though it made clear that it was not happy about the idea, Bayer seemed to be heeding increased pressure to get out of the drug business. Last month, it was forced to withdraw a cholesterol-lowering drug, Baycol, which had been linked to 52 deaths and is the subject of a class-action lawsuit in the United States. Baycol was crucial to the drug unit’s revenue and profit growth, analysts said, and its withdrawal made plain that Bayer was no longer big enough in the drug business to thrive independently.”
(“Bayer Won’t Sell Drug Unit and Picks Insider as Chief” by Suzanne Kapner; The New York Times; 9/14/2001; p. C10.)
3. Bayer’s stock had dropped almost 30 percent as a result of the Baycol scandal.
“Analysts and investors had also hoped that a fresh face in the chief executive’s office after Mr. Schneider retires in April might make a break with corporate strategy. But Bayer chose Werner Wenning, 54, a 30-year veteran of the company who is now its chief financial officer. Mr. Schneider said today that an outright sale of the drug unit had been ruled out. ‘Despite the major setback,’ he said, ‘these activities remain a core business of the Bayer Group that can contribute substantially to enhancing the company’s value.’ Investors showed their displeasure at the decision, made at a board meeting at company headquarters in Leverkusen, Germany, by bidding Bayer’s stock down about 3 percent in Frankfurt today. The stock has fallen almost 30 percent since Baycol was recalled on Aug. 8. [Italics are Mr. Emory’s]”
4. One should not fail to note that Bayer’s stock appreciated significantly as a result of the [as yet unsolved] anthrax attacks. It regained all of the ground lost as a result of the Baycol fiasco. Bayer was the maker of Cipro—the preferred treatment for anthrax. The possibility that the anthrax attacks were perpetrated by the Underground Reich is not one to be too readily dismissed. (It is interesting—and possibly significant—that the manipulation of equities markets took place with regard to both the 9/11 attacks and the assassination of President Kennedy.)
” . . . Bayer, the German maker of Cipro—the antibiotic of choice for anthrax infections—is tripling its output of the drug. And Bayer’s stock price has risen by more than 33% since the anthrax outbreaks began. [Italics are Mr. Emory’s]”
(“Biotechnology Stocks Are Gaining on Anthrax Scare” by Charles Piller; Los Angeles Times; 10/18/2001; p. C1.)
5. Supplementing information presented in previous broadcasts about AIDS as a biological warfare weapon, this program highlights the disturbing fact that Bayer continued to market a therapeutic drug for hemophiliacs to customers in Third World countries even after it was apparent that the product was contaminated with HIV.
“A division of the pharmaceutical company Bayer sold millions of dollars of blood-clotting medicine for hemophiliacs—medicine that carried a high risk of transmitting AIDS—to Asia and Latin America in the mid-1980’s while selling a new, safer product in the West, according to documents obtained by The New York Times. The Bayer unit, Cutter Biological, introduced its safer medicine in late February as evidence mounted that the earlier version was infecting hemophiliacs with H.I.V. Yet for over a year, the company continued to sell the old medicine overseas, prompting a United States regulator to accuse Cutter of breaking its promise to stop selling the product.”
(“2 Paths of Bayer Drug in 80’s: Riskier Type Went Overseas” by Walt Bogdanich and Eric Koli; The New York Times; 5/22/2003; p. 1.)
“By continuing to sell the old version of the life-saving medicine, the records show, Cutter officials were trying to avoid being stuck with large stores of a product that was proving increasingly unmarketable in the United States and Europe. Yet even after it began selling the new product, the company kept making the old medicine for several months more. A telex from Cutter to a distributor suggests one reason behind that decision, too: the company had several fixed-price contracts and believed that the old product would be cheaper to produce . . .”
” . . . ‘These are the most incriminating internal pharmaceutical industry documents I have ever seen,’ said Dr. Sidney M. Wolfe, who as director of the Public Citizen Health Research Group has been investigating the industry’s practices for three decades . . .”
” . . . The medicine, called Factor VIII Concentrate, essentially provides the missing ingredient without which hemophiliacs’ blood cannot clot. By injecting themselves with it, hemophiliacs can stop bleeding or prevent bleeds from starting; some use it as many as three times a week. It has helped hemophiliacs lead normal lives. But in the early years of the AIDS epidemic, it became a killer. The medicine was made using pools of plasma from 10,000 or more donors, and since there was still no screening test for the AIDS virus, it carried a high risk of passing along the disease; even a tiny number of H.I.V.—positive donors could contaminate an entire pool.”
“In the United States, AIDS was passed on to thousands of hemophiliacs, many of whom died, in one of the worst drug-related medical disasters in history.”
10. The vast international infrastructure of the I.G. Farben firm and its various subsidiary operations was a principal element of the Bormann organization. I.G. Farben chief Hermann Schmitz discussed I.G.‘s involvement with the Bormann program.
“In testimony later given to Nuremberg investigators, Schmitz praised Bormann for the way he had directed the distribution of German assets around the world. His own Farben organization had, of course, contributed to the success of the operation. Every regional representative working for Hermann Schmitz was an exceptional businessman, or he would not have been with I.G. All had contributed sound advice in their areas of competence, the regions of the world where they represented Farben while keeping an eye on the subsidiaries of the parent concern and the 700 hidden corporations they controlled. They had provided assistance and continuing guidance in establishing the 750 new companies created on order of Bormann, who wanted more than hidden assets; Bormann wanted the money and patents and technicians put to work to create even greater assets that would bolster Germany in the postwar years. In their meeting in the chancellery, both men checked over the figures of sums disbursed, and they were accurate to the pfennig.”
11. Bormann and Schmitz then discussed I.G.‘s prospects for the postwar period. The firm’s cozy relationship with powerful elements within the power elites of the Western allies was foreseen by Schmitz as boding well for the company’s future.
“The Reichsleiter asked Schmitz his views of the future. Schmitz replied, ‘The occupation armies will be understanding in the West, but certainly not in the East. I have instructed all Farben administrators and technicians to come to the West, where they can be of use in resuming our operations once the disturbances of 1945 come to a halt.’ Schmitz added that, while general bomb damage to the I.G. plants was about 25 percent of capacity, some were untouched. He mentioned speaking with Field Marshal Model, who was commanding the defenses of the Ruhr. ‘Model had planned to turn our Bayer-Leberkusen pharmaceutical factory into an artillery base, but he agreed to make it an open, undefended factory. Hopefully, we will get it back untouched.’ ‘What about your board of directors and the essential executives? If they are held by the occupation authorities, can I.G. continue?’ Bormann asked. ‘We can continue. We have an operational plan for such a contingency, which everyone understands. However, I don’t believe our board members will be detained too long. Nor will I. But we must go through a procedure of investigation before release, so I have been told by our N.W. 7 people who have excellent contacts in Washington.’ ”
(Ibid.; p. 158.) Schmitz’s predictions were relatively accurate. Neither Schmitz nor any of the I.G. Farben executives were severely punished and the firm’s three successor firms carried on effectively in the postwar period
12. Among the principal capital elements of the Bormann organization was the enormous economic power of the Hermann Schmmitz Trust.
“[Hermann] Schmitz’s wealth—largely I.G. Farben bearer bonds converted to the Big Three successor firms, shares in Standard Oil of New Jersey (equal to those held by the Rockefellers), as well as shares in the 750 corporations he helped Bormann establish during the last year of World War II—has increased in all segments of the modern industrial world. The Bormann organization in South America utilizes the voting power of the Schmitz trust along with their own assets to guide the multinationals they control, as they keep steady the economic course of the Fatherland.”
(Ibid.; p. 280.)
13. Next, the broadcast sets forth the operations of the “Big Three” successor firms to the I.G.—Bayer, Hoechst and BASF. It is important to note that the Bormann organization retained the decisive reins of power in these consummately important companies.
“By 1956, the three major multinationals (Hoechst, BASF, and Bayer) reshaped from the 159 companies within Germany that had comprised I.G. Farben were generating record profits for the original 450 major Farben stockholders, who had organized themselves into the I.G. Farben Stockholders Protective committee in Bonn. The Big Three went on expanding, tripling capitalization in 1956 from investment funds that poured in from the interlocking companies established in safe haven countries by Martin Bormann and Hermann Schmitz. There was a return, more vigorous than ever, of the huge, monolithic industrial multinationals that dominated the German economy before and during World War II.”
(Ibid.; p. 282.)
“Each of these three spinoffs from I.G. Farben today does more business individually than did Farben at its zenith, when its corporate structure covered 93 countries. BASF and Bayer individually boast worldwide sales of nearly $10 billion annually, while Hoechst, now the world’s largest chemical company, generated $16.01 billion in worldwide sales in 1980. Each does more business than E.I. du Pont de Nemours, with sales of $9.4 billion. The United States is, of course, the major market, one into which these German corporations continue to pour investment money for both new capital construction and corporate takeovers. BASF and Hoechst have each invested in excess of $1 billion in such expansions, and chief Herbert Grunewald of Bayer A.G. has said that they plan a $1 billion expansion in the United States within five to ten years. In Europe, Bayer A.G. is parent of some 380 subsidiary operations. In the United States, it controls Mobay Chemical whose annual sales in 1978 of $779.5 million make it the Bayer group’s most formidable foreign subsidiary. Miles laboratories (maker of Alka-Seltzer), Chemagro, Rhinechem, Cutter Laboratories, and Harmon Colors are additional Bayer A.G. interests in this country that Grunewald says he plans to double as part of his American expansion program.”
(Ibid.; pp. 282–283.)
“Together, these three multinationals assure permanent prosperity for the original 450 Farben stockholders, their banks, and the shadowy shareholders of the Bormann organization in south America who guard and vote the Hermann Schmitz trust fund through intermediaries at the annual meetings of BASF, Bayer and Hoechst.”
(Ibid.; p. 283.)
16. Reviewing the functioning of the successor firms to I.G. Farben in the overall scheme of the Bormann outfit, the broadcast encapsulates that organization’s power.
“The Bormann organization continues to wield enormous economic influence. Wealth continues to flow into the treasuries of its corporate entities in South America, the United States, and Europe. Vastly diversified, it is said to be the largest land-owner in South America and through stockholdings controls German heavy industry and the trust established by the late Hermann Schmitz, former president of I.G. Farben, who held as much stock in Standard Oil of New Jersey as did the Rockefellers.”
(Ibid.; p. 292.)
17. In the context of the article that follows, the program presents the decisive influence of I.G. Farben’s control of patents and engineering skill in the industry to perpetuate its control of the French chemical industry in the postwar period. The effective economic occupation of France did not end in 1945. The postwar structure of corporate Europe remained in the effective control of corporate Germany which, in turn, is in the effective control of the Bormann group.
“I.G. Farben was a formidable ally for Reichsleiter Bormann in his plans for the postwar economic rebirth of Germany. In a telephone conversation with Dr. [Georg] von Schnitzler, Bormann asked what would the loss of factories in France and the other occupied countries mean to German industry in general and to I.G. in particular. Dr. von Schnitzler said he believed the technical dependence of these countries on I.G. would be so great that despite German defeat I.G., in one way or another, could regain its position of control of the European chemical business. ‘They will need the constant technical help of I.G.‘s scientific laboratories as they do not own appropriate installations within themselves.’ ”
(Ibid.; p. 28.)
18. Mr. Emory’s FTR series about German corporate control of the American media dealt extensively with the Vivendi firm of France and Bertelsmann A.G. of Germany. In mid-2002, both Vivendi and Bertelsmann effected significant management changes. It is altogether revealing and highly significant that Jean-Rene Fourtou had been the head of Rhone-Poulenc, a French pharmaceuticals manufacturer which then merged (under the direction of Fourtou) with Hoechst—one of the “Big Three” successor firms of the I.G.
“Jean-Rene Fourtou is the man with the unenviable task of rescuing the world’s second largest media group from a group of angry bankers and shareholders . . . Mr. Fourtou graduated in 1960 from the Ecole Polytechnique, France’s top business school and the training ground for Mr. Messier, and joined management consultancy Bossard, where he was chief executive and chairman between 1972 and 1986. Rhone-Poulenc the [formerly state-owned] drugs manufacturer, recruited Mr. Fourtou as chairman and chief executive in 1986. In 2000, the company merged with Hoechst of Germany to form Aventis, where he was vice-chairman. [Italics are Mr. Emory’s.] He is firmly entrenched as a member of the old guard of the French business community.”
(“Jean-Rene Fourtou”; The Guardian; 7/8/2002.)
19. Also indicative of the central position of the old I.G. complex and the Bormann group in corporate Germany was the succession of Gunther Thielen to the head of Bertelsmann. Thielen had a management background with BASF, another of the successor firms to I.G. Farben.
“1970 different leading positions, group of BASF, Ludwigshafen. 1976 Technical manager, winter resounding refinery, Kassel.”
(“Dr. Gunther Thielen”; professional biography.)
20. The program concludes with review of “the Battle of Leuna” , one of the key aerial engagements of World War II. In this battle, the U.S. Eighth Air Force bombed the German synthetic fuel production out of effective operation, thus starving the German war machine of petroleum.
“May 12, 1944, was a fateful day for Germany and for I.G. On that day, the United States Eighth Air Force sent 935 bombers over Germany to attack its synthetic oil industry: 200 bombers concentrated on I.G.‘s plant alone. This attack marked the beginning of what the U.S. strategic bombing survey called ‘the Battle of Leuna,’ classifying it as ‘one of the major battles of the war.’ ”
(The Crime and Punishment of I.G. Farben; p. 128.)
“The next day, Albert Speer, Reich minister for armaments and war production, toured the wreckage of Leuna with Buetefisch. What he saw convinced him that ‘the technological war was decided. . . . It meant the end of German armament production.’ For Speer it was the turning point in the war. He immediately flew to Hitler’s headquarters at Obersalzburg to report on the extent and meaning of the disaster: ‘The enemy has struck us at one of our weakest points,’ he told the Fuehrer. ‘If they persist at this time, we will soon have no fuel production worth mentioning. Our one hope is that the other side has an air force general staff as scatterbrained as ours!’ ”
“Hitler then summoned four of the top fuel experts from I.G., including Krauch and Buetefisch, for a discussion about the consequences of the May 12 air raid. Goering and Speer accompanied them to the meeting. Before the group went in to see Hitler, Speer advised the four fuel experts to tell ‘the unvarnished truth.’ However, Goering insisted that they not be too pessimistic. ‘He was probably afraid that Hitler would place the blame for the debacle chiefly on him,’ Speer wrote later. Krauch was determined to follow Speer’s advice. He told Hitler that Germany’s position was hopeless if the enemy air raids on the synthetic oil plants continued. To support his grim forecast, he presented Hitler with an impressive array of facts and figures. . .”
(Ibid.; pp. 128–129.)
“The course of the Battle of Leuna became the gauge for the state of German oil production. By early July the resourceful I.G. technicians were able to restore Leuna to seventy-five percent operating capacity. However, the Eighth Air Force returned on July 7, again bombing the plant to a halt. Two days later the plant started operating again and by July 19 had reached fifty-three percent of capacity. And so the cycle of bombings and reconstruction continued. But the total effect on German fuel production was nothing less than catastrophic. Krauch concluded that the only way fuel installations could be rebuilt after each raid was to cannibalize other installations. Under this plan to prevent the total cessation of oil production, Germany’s productive capacity diminished with each recuperation. By September, oil production had dropped to fifteen percent, a condition from which Germany was never to recover.”
(Ibid.; p. 130.)
24. In the context of both the Standard/I.G. Agreement of 1929 and the other business arrangements that I.G. had with major western corporations, a discussion of a “gentleman’s agreement” with key businessmen on the “other side” not to bomb I.G’s synthetic fuel plants is more than a little interesting. It is also significant to note that it is the old I.G. firm Degussa that was at the core of Hitler’s program to develop an atomic bomb. Degussa was instrumental in equipping Saddam Hussein with his nuclear capability in the 1980’s and 1990’s.
“The intensive bombing of Leuna led to a curious confrontation between Buetefisch, who was in charge of Leuna, and Paul Harteck, leading nuclear scientist working on Germany’s atomic bomb project. Part of Leuna was devoted to the manufacture of heavy water, a necessary component of atomic energy. After the first bombs fell on Leuna, Buetefisch informed Harteck that the heavy water installation must be abandoned. He claimed that the massive bombing could not have been aimed at fuel production since there was a ‘gentlemen’s agreement’ between heavy industry in Germany and abroad that I.G.‘s synthetic gasoline plants would not be bombed. The only explanation for the raids against Leuna, therefore, was the heavy water facility.”
25. As one observes the maneuvering on the international and economic stages, bear in mind the complex CDU funding scandal that linked the French Elf oil company with a complex series of transactions involving the Thyssen firm, Saudi Arabia, the Leuna refinery in East Germany.
Airbus and the mysterious Karl-Heinz Schreiber are at the core of this scandal. The German domination of corporate France is another factor to consider in the context of the maneuvering around the Iraq war. Although it may appear to some that events discussed above are ancient history, they are actually at the foundation of the understanding of the modern world. Speaking of the CDU funding scandal, The Financial Times wrote:
“This could yet throw light on kickbacks paid by Elf over a deal between Mr. Mitterand and German ex-chancellor Helmut Kohl to invest in the Leuna refinery in East Germany—an affair which helped bring Mr. Kohl down.”
(“French Trial Paints a Picture of Graft on a Grandiose Scale” by Robert Graham; Financial Times; 4/22/2003; p. 14.)