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FTR #578 Darkness at Sunrise: The Interdiction and Cover-Up of Operation Savehaven

Lis­ten: MP3: Side 1  Side 2

Record­ed Novem­ber 26, 2006 REALAUDIO

Allen Dulles

Mar­tin Bor­mann (right) with Himm­ler

Intro­duc­tion: Doc­u­ment­ing neu­tral­iza­tion of the pro­gram to block the Nazi flight cap­i­tal pro­gram dur­ing and after World War II, this pro­gram high­lights the machi­na­tions of Allen Dulles in assur­ing the suc­cess of Oper­a­tion Eagle’s Flight. (Dulles, as well as his broth­er John Fos­ter, were attor­neys for the pow­er­ful Wall Street law firm Sul­li­van and Cromwell, which was deeply involved with the financ­ing of Nazi Ger­many.)

Hav­ing played an essen­tial role in financ­ing Nazi cor­po­rate struc­ture, Dulles used his posi­tion as a key agent for the Office of Strate­gic Ser­vices to sub­vert Oper­a­tion Safehaven—the Trea­sury Depart­ment pro­gram designed to block the Nazi cap­i­tal flight. (The OSS was America’s World War II intel­li­gence ser­vice.) After con­duct­ing Oper­a­tion Sunrise–negotiations with the SS in Italy aimed at effect­ing a sep­a­rate peace between the Third Reich and the West­ern allies–Dulles worked with oth­er intel­li­gence vet­er­ans and Wall Street movers and shak­ers to guar­an­tee the con­ti­nu­ity of the inter­na­tion­al car­tel sys­tem which helped spawn the Third Reich in the first place.

In order to assure the recy­cling of the Third Reich’s stolen wealth out of Europe and then back to Ger­many to effect the “eco­nom­ic mir­a­cle” of Ger­man recov­ery, Dulles and com­pa­ny cre­at­ed the World Com­merce Cor­po­ra­tion. In addi­tion, Dulles helped to polit­i­cal­ly reha­bil­i­tate SS gen­er­al Karl Wolff, his chief part­ner in the Sun­rise nego­ti­a­tions.

The num­ber two man in the SS, Wolff became a key infor­ma­tion source for John “Frenchy” Grom­bach. A for­mer mil­i­tary intel­li­gence offi­cer, Grom­bach chan­neled polit­i­cal dirt to Sen­a­tor Joseph McCarthy’s anti-com­mu­nist witch hunts. Among McCarthy’s vic­tims were Trea­sury Depart­ment vet­er­ans such as Har­ry Dex­ter White, who had worked on Oper­a­tion Safe­haven. With Safe­haven vet­er­ans dis­cred­it­ed as “com­mies,” the coverup of the Nazi mon­ey-go-round was com­plete.

Pro­gram High­lights Include: The FBI’s doc­tor­ing of the diary of for­mer Sec­re­tary of the Trea­sury Robert Mor­gen­thau (who over­saw Safe­haven); the par­tic­i­pa­tion of key Mor­gan part­ner Edward Stet­tinius in the World Com­merce Cor­po­ra­tion; the sub­ver­sion of Mor­gen­thau aide Lauch­lin Currie’s rep­u­ta­tion dur­ing the McCarthy peri­od; the Wall Street con­nec­tions of Dulles’ col­lab­o­ra­tors in the World Com­merce Cor­po­ra­tion; the post­war career of Dulles’ Sun­rise col­lab­o­ra­tor Lyman Lem­nitzer. For a greater under­stand­ing of the inter­na­tion­al car­tel sys­tem, its rela­tion­ship to the devel­op­ment of the Third Reich, the Bor­mann flight cap­i­tal pro­gram and the oth­er top­ics dis­cussed in this broad­cast, see—among oth­er programs—FTR#’s 305, 511, 532, as well as the books avail­able on this web­site. Be sure to exam­ine the declas­si­fied doc­u­ments chron­i­cling the Bush family’s involve­ment with Nazi indus­try before, dur­ing and after World War II.

1. Begin­ning with dis­cus­sion of Oper­a­tion Safe­haven, the pro­gram out­lines the Trea­sury Department’s cen­tral role in the attempt at neu­tral­iz­ing the Nazi flight cap­i­tal pro­gram. It was this flight cap­i­tal pro­gram that birthed the Bor­mann net­work, the eco­nom­ic com­po­nent of the Under­ground Reich.

. . . . As the tide of bat­tle shift­ed in favor of the Allies in 1943, eco­nom­ic war­fare goals began to take into account the con­cern that Ger­many would try to hide gold and oth­er assets abroad so they would not be includ­ed in war repa­ra­tions and could be used to re-build Axis strength in the post-war peri­od. The spe­cif­ic goals of Safe­haven, as they came to be for­mu­lat­ed in spring 1944, were to restrict and pre­vent Ger­man eco­nom­ic pen­e­tra­tion beyond Ger­many, to block Ger­many from trans­fer­ring assets to neu­tral coun­tries, to ensure that Ger­man wealth would be acces­si­ble for war repa­ra­tions and for the reha­bil­i­ta­tion of Europe, to make pos­si­ble the return to legal own­ers of prop­er­ties loot­ed from coun­tries once occu­pied by the Ger­mans, and to pre­vent the escape of strate­gic Ger­man per­son­nel to neu­tral havens. The over­all pur­pose was to make it impos­si­ble for Ger­many to start anoth­er war. . . .

(“U.S. and Allied Efforts To Recov­er and Restore Gold and Oth­er Assets Stolen or Hid­den by Ger­many Dur­ing World War”.)

2. Dur­ing Safe­haven, the Depart­ment of Trea­sury was head­ed by Hen­ry Mor­gen­thau. Mor­gen­thau advo­cat­ed the de-indus­tri­al­iza­tion of Ger­many and saw Safe­haven as the first step in real­iz­ing that goal. How man­i­fest­ly unsuc­cess­ful he was can be eval­u­at­ed at this point in time.

 . . .Sec­re­tary of the Trea­sury Mor­gen­thau in Sep­tem­ber 1944 put for­ward his plan for the polit­i­cal reform of a defeat­ed Ger­many through pun­ish­ment, par­ti­tion, and pas­tor­al­iza­tion. The rad­i­cal down-scal­ing of Ger­man econ­o­my envis­aged under the Mor­gen­thau Plan would rule out any sub­stan­tial repa­ra­tions to the vic­tors, except what might be obtained from the dis­man­tle­ment of what remained of Ger­man indus­try at the end of the war. While Pres­i­dent Roo­sevelt appeared at first to approve of the Trea­sury plan for a puni­tive peace for Ger­many, and he and Prime Min­is­ter Churchill went some dis­tance in adopt­ing some of its ele­ments dur­ing their wartime meet­ing at Que­bec in Sep­tem­ber 1944, oppo­si­tion devel­oped from Sec­re­tary of War Hen­ry Stim­son who feared it would fos­ter resent­ment in Ger­many and give rise to anoth­er war with Ger­many. The State Depart­ment also opposed the pas­tor­al­iza­tion of the Ger­many econ­o­my called for in the Trea­sury plan and favored a sys­tem of con­trols that would bring Ger­many into the fam­i­ly of nations. The State Depart­ment opposed the dein­dus­tri­al­iza­tion of Ger­many, believ­ing rather that Ger­many should have a pos­i­tive role to play in the post­war inter­na­tion­al econ­o­my. The British also opposed the harsh peace plan advo­cat­ed by Mor­gen­thau. . . .

(Idem.)

3. Anoth­er of the Trea­sury Depart­ment offi­cials involved with Safe­haven was Har­ry Dex­ter White, who was a casu­al­ty of Joe McCarthy’s anti-com­mu­nist witch hunts.

 . . .To pro­vide Embassies with exper­tise in Safe­haven-relat­ed issues, on Octo­ber 31, 1944, Trea­sury Sec­re­tary Mor­gen­thau agreed with Trea­sury Gen­er­al Coun­sel Joseph O’Connell and Har­ry Dex­ter White, Direc­tor of Mon­e­tary Research for the Trea­sury Depart­ment, that Trea­sury-trained finan­cial intel­li­gence offi­cers should be dis­patched to sup­ple­ment the staff of Embassies in response to the increased out­flow of Axis cap­i­tal and goods from the Ger­man Reich to neu­tral havens. . . .

(Idem.)

4. In addi­tion to Har­ry Dex­ter White, Lauch­lin Cur­rie was anoth­er of Morgenthau’s asso­ciates in the unsuc­cess­ful Safe­haven oper­a­tion. Cur­rie, too, was destroyed in the McCarthy peri­od.

 . . .The arrival of the Cur­rie Mis­sion in Bern in Feb­ru­ary 1945 rep­re­sent­ed both a sub­stan­tive and psy­cho­log­i­cal water­shed for the Swiss. Since the Allied land­ings in June 1944, the Ger­man Army had steadi­ly retreat­ed, and for the first time in over four years Switzer­land was not sur­round­ed by the Ger­man Army, open­ing the pos­si­bil­i­ty to expand trade and com­mu­ni­ca­tion with the non-Axis world. The U.S. Lega­tion in Bern judged that pub­lic expec­ta­tions cen­ter­ing on Currie’s vis­it were bor­der­ing on the fever­ish. . . . Despite offi­cial Swiss con­cern about his mis­sion, Cur­rie was impressed with the pop­u­lar enthu­si­asm that greet­ed his arrival on the first train to Bern from a recent­ly lib­er­at­ed Paris. Through­out his stay, in fact, Cur­rie received red car­pet treat­ment, the details of which appeared in much of his cor­re­spon­dence about the Mis­sion. It is like­ly that the lav­ish Swiss hos­pi­tal­i­ty afford­ed Cur­rie and his col­leagues con­tributed, to some degree, to the opti­mistic inter­pre­ta­tion of the mission’s out­come. . . .

(Idem.)

5. Under the aus­pices of Safe­haven, Ger­man indus­tri­al rep­re­sen­ta­tives in the U.S. and their Amer­i­can col­lab­o­ra­tors were being wire­tapped. Pres­i­dent Roo­sevelt intend­ed to use the infor­ma­tion gleaned from those wire­taps to indict the Nazis’ Amer­i­can indus­tri­al and finan­cial col­lab­o­ra­tors. Had he been suc­cess­ful in doing so, many of the most promi­nent names in Amer­i­can indus­try and finance would have been con­vict­ed at Nurem­berg, includ­ing the grand­fa­ther and great-grand­fa­ther of George Bush! Among those col­lab­o­ra­tors was Allen Dulles, who was cen­tral­ly involved in financ­ing the Third Reich and in help­ing the Nazi flight cap­i­tal pro­gram. (For more about Dulles’ role in help­ing to finance the Third Reich and assist the Nazi flight cap­i­tal pro­gram, see—among oth­er programs—FTR#’s 353, 361, 370532.)

 . . . . But the one issue upon which Roo­sevelt was unyield­ing was his insis­tence that after the war, the Ger­man bankers must stand in the dock at the Nurem­berg war crimes tri­al. This is con­firmed by the top-secret White House-Jus­tice Depart­ment cor­re­spon­dence files. The plan was to wait until Abs, Krupp, Flick, and the rest of the indus­tri­al­ists were charged. Then Mor­gen­thau would unleash the wire­tap Evi­dence show­ing that the Nazis had hid­den their stolen assets in Switzer­land, with the help of Allen Dulles. The whole scan­dal of West­ern aid to the Ger­many econ­o­my would unrav­el. All the slights of the Stan­dard Oil black­mail would be avenged. The sud­den release of the Safe­haven inter­cepts would force a pub­lic out­cry to bring trea­son charges against those British and Amer­i­can busi­ness­men who aid­ed the ene­my in time of war. The tar­gets includ­ed not only the Dulles broth­ers, but For­re­stal and major indus­tri­al­ists, such as Hen­ry Ford. From a pros­e­cu­tor’s point of view, indict­ing the Ger­man bankers first was a bril­liant strat­e­gy. To save them­selves, Her­man Abs and Hjal­mar Schacht would have to reveal the whole his­to­ry of their sor­did deal­ings with com­pa­nies such as Ford Motor. Despite the shields of Swiss bank­ing laws and the lay­ers of cor­po­ra­tions that Dulles had erect­ed, he had nev­er antic­i­pat­ed that the Swiss bank codes and cables would ever become pub­lic knowl­edge. Roo­sevelt and Mor­gen­thau would have hanged him and all his col­leagues, for­ev­er break­ing the pow­er of the pirates of inter­na­tion­al finance. It was a glo­ri­ous dream. Yet the scheme com­plete­ly fell apart because some­one tipped off Dulles that he was under sur­veil­lance. . . .

(The Secret War Against the Jews: How West­ern Espi­onage Betrayed the Jew­ish Peo­ple; John Lof­tus and Mark Aarons; Copy­right 1994 [HC]; St. Martin’s Press; ISBN 0–312-11057‑X; pp. 77–78.)

6. Again, Allen Dulles would have been in the defen­dants’ dock at Nurem­berg. Dulles was active­ly involved with help­ing the Nazis move their mon­ey to Argenti­na.

 . . . Because he learned about the Safe­haven inter­cepts so quick­ly, Dullest knew that there was no smok­ing gun against him. His work for the Nazis pri­or to the war was not ille­gal, let alone trea­so­nous. His wartime com­mu­ni­ca­tions with the Nazis, although high­ly embar­rass­ing, could be excused as an exer­cise in decep­tion or as part of his intrigues to over­throw Hitler. Although many of his wartime actions were unau­tho­rized, they were not crim­i­nal. What was crim­i­nal was the way that Dulles was try­ing to help the Ger­man indus­tri­al­ists get their mon­ey out at the end of the war. After the Nazis’ 1943 defeat at Stal­in­grad, var­i­ous Nazi busi­ness­men real­ized they were on the los­ing side and made plans to evac­u­ate their wealth. The Per­on gov­ern­ment in Argenti­na was receiv­ing the Nazi flight cap­i­tal with open arms, and Dulles helped it hide the mon­ey. This was more than a vio­la­tion of the Trad­ing with the Ene­my Act; giv­ing aid and com­fort to the ene­my in time of war was trea­son. Once again, how­ev­er, Alien Dulles was one step ahead of his pur­suers. . . .

(Ibid.; p. 79)

7. Note that the Vat­i­can helped Dulles move the Nazi mon­ey out of Europe and that the Nazi cap­i­tal helped the Argen­tine econ­o­my soar.

. . . Dulles rep­re­sent­ed a stag­ger­ing array of Argen­tine cor­po­rate and polit­i­cal enti­ties before and after the war. Pres­i­dent Juan Per­on and his fam­i­ly were ardent Catholics and vio­lent­ly anti-Com­mu­nist, as were many Argen­tines. In fact, Per­on was decid­ed­ly pro-Fas­cist and Argenti­na was the only South Amer­i­can coun­try that con­tin­ued rela­tions with the Third Reich well into the war. The Argen­tine econ­o­my boomed with the mas­sive post­war trans­fer of Nazi flight cap­i­tal. . . .

(Ibid.; p. 110.)

8. “ . . . Soon after the Safe­haven inquiry into his own Nazi mon­ey smug­gling was buried, Allen Dulles resigned from the OSS and returned to New York to do what he did best: move mon­ey ille­gal­ly for his clients. One of the first names on his client list was a ‘per­son­al mat­ter’ for Thomas McKit­trick, the head of the pre­vi­ous­ly Nazi-dom­i­nat­ed Bank of Inter­na­tion­al Set­tle­ments (BIS) in Switzer­land. The BIS had over­seen the trans­fer of Nazi assets to Switzer­land. After the war, the Nazis moved the mon­ey via the Vat­i­can to Argenti­na. . . .”

(Ibid.; pp. 83–84.)

9. In order to cir­cum­vent Safe­haven, pro­tect the Nazi cap­i­tal flight and, ulti­mate­ly re-finance the Ger­man econ­o­my, Dulles recruit­ed William Dono­van, head of the OSS, America’s World War II intel­li­gence ser­vice. Very close­ly iden­ti­fied with the Mor­gan inter­ests, Dono­van col­lab­o­rat­ed with Dulles in the World Com­merce Cor­po­ra­tion, one of the pri­ma­ry vehi­cles for effect­ing the Nazi “mon­ey-go-round”.

. . . The ‘old spies’ say that Dulles did not have to try very hard to con­vince Dono­van that Tru­man was an idiot and that the only hope for the revival of an Amer­i­can intel­li­gence ser­vice was to end the Demo­c­ra­t­ic party’s stran­gle­hold on the White House in the 1948 elec­tion. In the mean­time, Dulles and Dono­van agreed that every effort must be made to sab­o­tage the Tru­man lib­er­als and qui­et­ly pre­pare for the Cold War. To this end, Dulles con­vinced Dono­van to serve on the board of a com­pa­ny that would help rebuild the Ger­man econ­o­my as a bul­wark against com­mu­nism. Dulles assured his old boss that there were a large num­ber of wealthy South Amer­i­can investors, espe­cial­ly in Argenti­na, who were will­ing to help rebuild Ger­many. Although Dono­van did not know it, Dulles had conned him into serv­ing as the front man for the Nazi mon­ey laun­der­ers. He and Sir William Stephen­son from British intel­li­gence joined the board of direc­tors of the World Com­merce Cor­po­ra­tion, with Allen Dulles, nat­u­ral­ly, as their lawyer. The Nazi mon­ey flowed in a great circle—out of the Third Reich, through the Vat­i­can, to Argenti­na, and back to ‘demo­c­ra­t­ic’ West Ger­many. The source of the mirac­u­lous West Ger­man eco­nom­ic revival in the 1950’s was the same mon­ey that had been stolen in the 1940’s. . . .

(Idem.)

10. Note that the efforts of Dulles, Dono­van and the World Com­merce Cor­po­ra­tion were essen­tial to the eco­nom­ic recon­struc­tion of Ger­many. Note also, that the investors in the Ger­man corporations—including the Wall Street high-rollers that Roo­sevelt want­ed to pros­e­cute at Nuremberg–benefited from the inter­dic­tion of Oper­a­tion Safe­haven.

 . . . Few who watch the film Evi­ta would rec­og­nize that the Per­on fam­i­ly of Argenti­na worked direct­ly with the Croa­t­ian Ustashi to estab­lish a pipeline from the Vat­i­can Bank. As recount­ed ear­li­er in this book, Ante Pavel­ic him­self, the Croa­t­ian Nazi leader, moved to Buenos Aires and became a ‘secu­ri­ty advis­er’ to the Per­ons. Laun­dered through the ‘untrace­able’ Vat­i­can Bank, the Nazi trea­sure moved from Switzer­land to South Amer­i­ca. There the stolen funds were invest­ed in a num­ber of Argen­tine busi­ness­es whose lawyer was, of course, Allen Dulles. As the final act of the mon­ey laun­der­ing, Dulles cre­at­ed the World Com­merce Cor­po­ra­tion to revive trade between Argenti­na and West Ger­many. On its board were such nota­bles as William Dono­van of US intel­li­gence, and William Stephen­son of British intel­li­gence. Dur­ing the 1950’s, much of the stolen pro­ceeds were laun­dered back to Ger­many for the great eco­nom­ic revival of West Ger­many. In the end, the mon­ey went back to the orig­i­nal Ger­man com­pa­nies and their West­ern investors. . . .

(Unholy Trin­i­ty: The Vat­i­can, the Nazis and the Swiss Banks; by John Lof­tus and Mark Aarons; St. Martin’s Press [SC]; Copy­right 1991, 1998 by Mark Aarons and John Lof­tus; ISBN 0–312-18199; p. 300.)

11. In his efforts on behalf of the Bor­mann cap­i­tal net­work, Dulles was able to draw on the resources of Frank Wis­ner, who became a Deputy Direc­tor of the CIA. Wis­ner, an OSS vet­er­an like Dulles and Dono­van, had been a part­ner in the pow­er­ful Wall Street law firm of Carter, Led­yard and Mil­burn. (At one point Carter, Led­yard and Milburn—which was the legal coun­sel for the New York Stock Exchange—had two alum­ni as Deputy Direc­tors of the CIA. Wis­ner was joined by Hard­ing Jack­son.)

 . . . The most impor­tant front group was an enti­ty called the World Com­merce Cor­po­ra­tion estab­lished after World War II to rebuild German—South Amer­i­can trade net­works. The direc­tors of this cor­po­ra­tion were Sir William Stephen­son, for­mer­ly of British intel­li­gence and Gen­er­al William Dono­van, for­mer­ly of the OSS. One of the attor­neys for World Com­merce was Allen Dulles, whose assis­tant, Frank Wis­ner, was the State Department’s deputy for cur­ren­cy and eco­nom­ic reform in the Amer­i­can Sec­tor of West Ger­many. Many of the staff mem­bers for the eco­nom­ic recon­struc­tion of occu­pied Ger­many came from the same inter­na­tion­al finan­cial firms which had invest­ed heav­i­ly in the pre-war Ger­man econ­o­my. . . .

(Ibid.; p. 278.)

12. Fur­ther under­scor­ing the cor­po­ratist ele­ment in the inter­dic­tion of Safe­haven is the fact that Edward Stet­tinius joined Dulles and Dono­van on the World Com­merce Cor­po­ra­tion. Stet­tinius was a key Mor­gan part­ner and for­mer Sec­re­tary of State.

 . . . Osten­si­bly to pro­mote recov­ery he [Dono­van], William Stephen­son, and Edward Stet­tinius, along with mem­bers of the Lon­don Ham­bro fam­i­ly and quite a del­e­ga­tion of oth­er at-large bigshots, had start­ed up the World Com­merce Cor­po­ra­tion, a Pana­ma-reg­is­tered enti­ty which seemed to fall some­where between an import-export com­bine and a com­mer­cial­ly ori­ent­ed espi­onage net­work. Pri­ma­ry among its func­tions would seem to have been the reequip­ping and upgrad­ing of the Ger­man indus­tri­al plant. . .

(The Old Boys: The Amer­i­can Elite and the Ori­gins of the CIA; Bur­ton Hersh; Charles Scribner’s Sons [HC]; Copy­right 1992 by Bur­ton Hersh; IBN 0–684-19348–5; p. 229.)

13. The title of the broad­cast derives from Oper­a­tion Sun­rise, an attempt by Dulles to nego­ti­ate a sep­a­rate sur­ren­der of Nazi forces in Italy. In and of itself a vio­la­tion of the pro­to­cols of the Grand Alliance that joined the USSR, U.S. and U.K. against the Axis, Oper­a­tion Sun­rise helped to dri­ve a wedge between the U.S. and the Sovi­ets. Sun­rise appears to have been a key fac­tor in pre­cip­i­tat­ing the Cold War. Dulles’ key nego­ti­at­ing part­ner on the oth­er side was Gen­er­al Karl Wolff, Himmler’s per­son­al adju­tant and the num­ber two man in the SS. As we will see, Wolff was lat­er to con­tribute to the McCarthy anti-com­mu­nist witch hunts that, among oth­er things, helped to dis­cred­it vet­er­ans of the Safe­haven pro­gram by tar­ring them with the “com­mie brush.” Among those who sup­port­ed exclud­ing the Sovi­ets from the Sun­rise nego­ti­a­tions was Averell Har­ri­man, the U.S. ambas­sador the Sovi­et Union. Har­ri­man was a part­ner of the Bush fam­i­ly in their busi­ness deals with the Nazis.

. . . When Dulles opened con­tacts with Wolff in ear­ly 1945, the British mil­i­tary com­mand in Italy noti­fied the Sovi­ets that new peace nego­ti­a­tions had begun for a rapid Ger­man sur­ren­der of north­ern Italy. The Sovi­ets replied that they were glad to hear this; all that was required under stand­ing Allied agree­ments on nego­ti­a­tions with the ene­my was for a hand­ful of senior Sovi­et mil­i­tary rep­re­sen­ta­tives to mon­i­tor the progress of the talks. The U.S. ambas­sador to Moscow, Averell Har­ri­man, vetoed that. Invit­ing the Sovi­ets to the nego­ti­a­tions would make the Ger­mans ner­vous, he con­tend­ed, and would only encour­age the Sovi­ets to insist on par­tic­i­pa­tion in oth­er upcom­ing deci­sions about the for­mer Axis ter­ri­to­ries already held by U.S. and British troops. His was one of the most impor­tant voic­es on U.S.-Soviet rela­tions, and his opin­ion car­ried the day. . . .

(The Splen­did Blonde Beast: Mon­ey, Law and Geno­cide in the Twen­ti­eth Cen­tu­ry; Christo­pher Simp­son; Com­mon Courage Press [SC]; Copy­right 1995 by Christo­pher Simp­son; ISBN 1–5671-062–0 [paper]; p. 202.)

14. Among the mil­i­tary nego­tia­tors allied with Dulles was Lyman Lem­nitzer, who was to become a char­ac­ter wit­ness for Wolff after the war and, even­tu­al­ly, Chair­man of the Joint Chiefs of Staff. He was Chair­man of the Joint Chiefs when John F. Kennedy became Pres­i­dent. (Lis­ten­ers famil­iar with Oper­a­tion North­woods should note that that pro­gram was devel­oped under Lem­nitzer. For more about North­woods, see FTR#363.)

. . . .Roo­sevelt and Stal­in exchanged increas­ing­ly bit­ter notes as nego­ti­a­tions con­tin­ued in Switzer­land among Dulles, the SS rep­re­sen­ta­tives, and a crew of senior U.S. mil­i­tary offi­cers that includ­ed Major Gen­er­al Lyman Lem­nitzer and Gen­er­al Hoyt Van­den­berg. A week after the talks began, Sovi­et For­eign Min­is­ter Molo­tov sent a note to Har­ri­man in Moscow express­ing ‘com­plete sur­prise’ that Sovi­et rep­re­sen­ta­tives were still barred from the talks. He said that the sit­u­a­tion was ‘inex­plic­a­ble in terms of the rela­tions of alliance’ between the U.S. and the USSR.’ If the U.S. refused to per­mit Sovi­et rep­re­sen­ta­tives to par­tic­i­pate, Molo­tov con­tend­ed, the talks had to be aban­doned. . . .

(Idem.)

15. In the text excerpts that fol­low, note the role of the Sun­rise nego­ti­a­tions in exac­er­bat­ing fric­tion between the U.S. and the Sovi­ets.

. . . Roo­sevelt wrote direct­ly to Stal­in a few days lat­er. The USSR mis­un­der­stood what was tak­ing place, he insist­ed. The talks in Italy were basi­cal­ly a local mat­ter, com­pa­ra­ble to that in which the Baltic coast cities of Konigs­berg and Danzig had ear­li­er sur­ren­dered to the Sovi­ets. Roo­sevelt seemed to approve Sovi­et partici­pation in the talks (‘I will be pleased to have at any dis­cus­sion of the details of sur­ren­der . . . the ben­e­fit of the expe­ri­ence and advice of any of your offi­cers who can be present. . .’), but he insist­ed that the talks in Switzer­land were an ‘inves­ti­ga­tion’ of a local Ger­man com­man­der’s sur­ren­der offer, not a ‘nego­ti­a­tion.’ Time was of the essence, he con­tin­ued, and the U.S. rep­re­sen­ta­tives could not be fault­ed for being eager to accept the sur­ren­der of the Ger­man troops they were fac­ing on the bat­tle­field. . . .

(Ibid.; p. 203.)

16. “Stal­in esca­lat­ed the argu­ment. His for­eign min­is­ter, Molo­tov, sud­den­ly had new com­mit­ments in Moscow and would not attend the found­ing of Roo­sevelt’s most cher­ished post­war project, the Unit­ed Nations Orga­ni­za­tion. This was a cal­cu­lat­ed slight, and both sides knew it. In a new note to FDR, Stal­in replied that he was all for prof­it­ing from cas­es of dis­in­te­gra­tion in the Ger­man armies,’ but in this case, the Ger­mans were using the talks to ‘maneu­ver’ and to trans­fer troops from Italy to the East­ern Front.’ Roo­sevelt replied that Sovi­et actions in Poland and Roma­nia had not lived up to the com­mit­ments made at the Yal­ta Con­fer­ence less than two months pre­vi­ous­ly. U.S.-Soviet rela­tions had moved rapid­ly to an ‘atmos­phere of regret­table appre­hen­sion and mis­trust’ owing to the con­fronta­tion over Dulles’s talks with the SS, Roo­sevelt com­ment­ed, and again insist­ed to Stal­in that the talks were for ‘the sin­gle pur­pose of arrang­ing con­tact with com­pe­tent Ger­man mil­i­tary offi­cers and not for nego­ti­a­tions of any kind.’ Mean­while, FDR cabled Dulles in Switzer­land and ordered him to present the SS rep­re­sen­ta­tives with a take-it-or-leave-it offer of an uncon­di­tion­al sur­ren­der. No fur­ther nego­ti­a­tion would be per­mit­ted, the Pres­i­dent said. Stal­in seemed to know many of the details of the Dulles-SS talks even before Roo­sevelt did.

When FDR tried to soothe Stal­in with a dec­la­ra­tion that the Swiss talks were with­out polit­i­cal sig­nif­i­cance, Stal­in shot back that ‘appar­ent­ly you are not ful­ly informed.’ Stal­in’s mil­i­tary intel­li­gence agents in Switzer­land were ‘sure that nego­ti­a­tions did take place and that they end­ed in an agree­ment with the Ger­mans, where­by the Ger­man com­man­der on the West­ern Front, Mar­shal Kessel­ring, is to open the front to the Anglo-Amer­i­can troops and let them move east, while the British and Amer­i­cans have promised, in exchange, to ease the armistice terms for the Ger­mans. I think my col­leagues are not very far from the truth,’ he con­tin­ued. If this per­cep­tion was wrong, he asked, why were his men still being exclud­ed from the talks? . . .”

(Ibid.; pp. 203–204.)

17. Note that Stal­in was right—Dulles and crew were indeed attempt­ing to nego­ti­ate a sep­a­rate peace with the Third Reich, in vio­la­tion of the pro­to­cols that gov­erned the alliance between the Sovi­ets, the U.S. and the Unit­ed King­dom. Note also that Roo­sevelt died at this time. Although it is not dis­cussed in detail, Roo­sevelt died while hav­ing his por­trait paint­ed by some White (anti-com­mu­nist) Rus­sians, who didn’t even wait to learn of Roosevelt’s fate after his col­lapse. Nazi astrologers had pre­dict­ed that the date on which Roo­sevelt died would see a change in the Nazi for­tunes. Mr. Emory does not believe in astrol­o­gy and feels that the Nazi astrologers may well have been pro­vid­ing a pro­pa­gan­da assist to the Nazi faith­ful in antic­i­pa­tion of an attempt on Roosevelt’s life.

. . . .Stal­in may have over­stat­ed his case, but he was not far off. These were in fact exact­ly the terms that Car­di­nal Schus­ter had pro­posed and that Dulles had dis­cussed with Wolff. No final deal had been struck, though, and by ear­ly April both sides in Switzer­land were once again seek­ing guid­ance from their respec­tive home offices. By then, though, the Ger­man front had begun to col­lapse through­out Europe, the Red Army was at the gates of Berlin, and Dulles’s grand plan to take Cen­tral Europe by way of Tri­este had failed. ‘The Bern inci­dent,’ as Roo­sevelt described it in a last let­ter to Stal­in writ­ten only hours before his death, ‘. . . now appears [to have] fad­ed into the past with­out hav­ing accom­plished any use­ful pur­pose.’ . . .

(Ibid.; p. 204.)

18. Observers and par­tic­i­pants in the Sun­rise nego­ti­a­tions came away con­vinced that Dulles had reached an accord with Wolff and his SS coun­ter­parts. As will be seen below, they were right.

. . . But FDR’s ban on a for­mal agree­ment did not pre­clude Dulles from mak­ing more lim­it­ed ‘gen­tle­men’s agree­ments’ with his SS coun­ter­parts for con­ces­sions that he saw as advan­ta­geous to the OSS or to U.S. geopo­lit­i­cal strat­e­gy. The SS del­e­ga­tion, the Swiss intel­li­gence envoys who were serv­ing as go-betweens, and the Sovi­et agents secret­ly mon­i­tor­ing the talks each came away from the talks con­vinced that Dulles had agreed to pro­vide pro­tec­tion and assis­tance to Gen­er­al Wolff and his SS entourage in exchange for a quick sur­ren­der of Ger­man troops in Italy, although Dulles would deny this lat­er. . . .

(Idem.)

19. Indi­cat­ing the trea­so­nous nature of Dulles’ activ­i­ties is the fact that he con­tin­ued the Sun­rise nego­ti­a­tions even after being ordered to break them off. It was the view of Dulles’ supe­ri­ors that Wolff’s efforts were an attempt at split­ting the alliance. They were right. Dulles was doing the same thing.

. . . Wolf­f’s ulti­mate­ly emp­ty promis­es of a dra­mat­ic Ger­man sur­ren­der that would advance U.S. and British forces far to the east cap­ti­vat­ed Dulles and his OSS col­leagues in Switzer­land. Dulles inter­vened on a half-dozen occa­sions in an effort to keep the Oper­a­tion Sun­rise nego­ti­a­tions on track, even after the joint U.S.–British mil­i­tary com­mand in Italy ordered him to desist. By the last week of April, senior U.S. and British mil­i­tary com­man­ders in Italy con­clud­ed that the Sun­rise project was lit­tle more than a des­per­ate SS effort to frac­ture Allied uni­ty, and told Dulles to cut off all con­tact with Wolff and his emis­saries. Nev­er­the­less, Dulles’s top aide Gero von Gaever­nitz kept the nego­ti­a­tions open and act­ed with Dulles’s tac­it coop­er­a­tion to res­cue Wolff from Ital­ian par­ti­sans. The U.S.-British Com­bined Chiefs of Staff are known to have opened an inves­ti­ga­tion into Dulles’s alleged dere­lic­tion of duty and refusal to obey orders in con­nec­tion with the Wolff res­cue, but the records of this inquiry have dis­ap­peared from OSS and mil­i­tary files and have yet to be redis­cov­ered. . . .

(Ibid.; pp. 204–205.)

20. “The unof­fi­cial truce in Italy that took hold as the nego­ti­a­tions went on prob­a­bly saved lives, if only because ground com­bat is so bru­tal that even a few hours’ respite can reduce casu­al­ties. But Roo­sevelt’s con­clu­sion that the nego­ti­a­tions failed to achieve a gen­uine Ger­man sur­ren­der in Italy is accu­rate. As a prac­ti­cal mat­ter, Oper­a­tion Sun­rise con­tributed con­sid­er­ably more to sour­ing U.S.-Soviet rela­tions, and to enhanc­ing Alien Dulles’s care­ful­ly cul­ti­vat­ed rep­u­ta­tion as a spy­mas­ter, than it ever did to win­ning the war in Europe. [Empha­sis added.] Mak­ing use of splits in the ene­my camp is, of course, among the most basic mil­i­tary tac­tics, and fun­da­men­tal to almost any effort to recruit spies. But Oper­a­tion Sun­rise was seri­ous­ly coun­ter­pro­duc­tive from strate­gic and polit­i­cal points of view. The U.S. and its allies had for­mal­ly agreed to for­go use of sep­a­rate peace nego­ti­a­tions with the Ger­mans in order to more ful­ly ensure the solid­i­ty of their coali­tion. That pol­i­cy did not make rela­tions with the Ger­mans eas­i­er, obvi­ous­ly, but any oth­er approach would like­ly have facil­i­tat­ed Hitler’s cen­tral strat­e­gy and last hope in the final years of the war, which was to con­quer the Allies by divid­ing them. Roo­sevelt’s demand for an uncon­di­tion­al sur­ren­der had not sprung from na’ivete or star­ry-eyed ide­al­ism, as some crit­ics have argued, but rather from a tough-mind­ed appraisal of just how much blood would be required to defeat the Axis. The uncon­di­tion­al-sur­ren­der pol­i­cy did not ‘cost’ U.S. lives; it saved them, per­haps by the hun­dreds of thou­sands, by guar­an­tee­ing that the Sovi­et Union would car­ry most of the weight in the war against Hitler.”

(Ibid.; p.205.)

21. The begin­ning of a sym­bi­ot­ic rela­tion­ship, Sun­rise became the point of depar­ture for a col­lab­o­ra­tive rela­tion­ship between Dulles, Wolff and Lem­nitzer.

 . . . The more sophis­ti­cat­ed Axis defen­dants soon learned how to make the most of the divi­sions among the Allies. The post­war careers of the SS men who had nego­ti­at­ed with Alien Dulles dur­ing Oper­a­tion Sun­rise pro­vide an exam­ple of how sym­bi­ot­ic rela­tion­ships evolved among the vic­tors and the van­quished dur­ing the first years after the war. The Dulles case is inter­est­ing not only because it was typ­i­cal of thou­sands of less promi­nent instances, but also because of the sym­me­try in Dulles’s behav­ior in the wake of two dif­fer­ent genocides—the Armen­ian Geno­cide and the Nazi Holocaust—more than two decades apart. . . .

(Ibid.; p. 236.)

22. “ . . . Though Dulles was lat­er to deny it, he extend­ed de fac­to pro­tec­tion to Karl Wolff and at least two of his assis­tants, Eugen Doll­mann and Eugen Wen­ner, both of whom were lat­er indict­ed by Ital­ian author­i­ties for their roles in mas­sacres of Ital­ian par­ti­sans and depor­ta­tion of Ital­ian Jews to Auschwitz. Cir­cum­stan­tial evi­dence links Dulles to the escape of anoth­er of Wolf­f’s assis­tants, Wal­ter Rauff, whose rise through SS ranks had been helped by his use of gas trucks to mur­der thou­sands of Jew­ish women and chil­dren on the East­ern Front. . . .”

(Idem.)

23. Dulles and Lem­nitzer were char­ac­ter wit­ness­es for Wolff at a de-Naz­i­fi­ca­tion pro­ce­dure. Their tes­ti­mo­ny pre­pared the way for Wolff to become a col­lab­o­ra­tor with ele­ments of West­ern intel­li­gence.

 . . . In late 1949, the British brought Karl Wolff before a denaz­i­fi­ca­tion board (not an Allied court) in Hamburg—a move that might be fair­ly com­pared to charg­ing the SS leader with traf­fic vio­la­tions. Wolf­f’s Sun­rise col­leagues turned out in force for the ‘denaz­i­fi­ca­tion.’ Allen Dulles, Lyman Lem­nitzer, and Gen­er­al Ter­rence Airey each sub­mit­ted an affi­davit on Wolf­f’s behalf to the Ger­man pan­el; Dulles’s senior aide, Gero von Gaever­nitz, tes­ti­fied in per­son as a defense wit­ness. The board delib­er­at­ed briefly, deter­mined that the Karl Wolff in the dock was in fact the well-known Nazi and SS leader, then went on to con­clude that the time Wolff had served in Allied intern­ment since the war had been pun­ish­ment enough. Karl Wolff was free to go. . . .

(Ibid.; p. 242.)

24. “ . . . Offi­cial­ly, the Unit­ed States, Britain, and the USSR for­mal­ly agreed at the Pots­dam Con­fer­ence dur­ing the sum­mer of 1945 to a tough pro­gram of demil­i­ta­riza­tion, decen­tral­iza­tion, and denaz­i­fi­ca­tion of Ger­many in gen­er­al and of the Ger­man econ­o­my in par­tic­u­lar. They also spec­i­fied that Ger­many would pay sub­stan­tial war repa­ra­tions to the coun­tries it had dam­aged. The Wolff and Hor­thy cas­es sug­gest that despite such pub­lic covenants, clan­des­tine fac­tions inside West­ern gov­ern­ments already enjoyed suf­fi­cient clout in the late 1940s to effec­tive­ly derail pros­e­cu­tion of Nazi crim­i­nals, includ­ing those of very high rank, at least in cer­tain cir­cum­stances. But this pat­tern of com­fort extend­ed to those who had once orga­nized geno­cide was not sim­ply some plot by insid­ers. It was, as will be seen, a struc­tur­al prob­lem, one that extend­ed de fac­to amnesties to thou­sands of men and women who had pro­mot­ed or prof­it­ed from mass mur­der. . . .”

(Ibid.; p. 244.)

25. Even­tu­al­ly, the reha­bil­i­tat­ed Wolff began feed­ing infor­ma­tion to “Frenchy” Grom­bach, a for­mer mil­i­tary intel­li­gence agent who formed a net­work of oper­a­tives who fed infor­ma­tion to the CIA, among oth­ers. As indi­cat­ed here, one of Grombach’s major sources in his efforts was Wolff.

 . . . One of Grom­bach’s most impor­tant assets, accord­ing to U.S. naval intel­li­gence records obtained under the Free­dom of Infor­ma­tion Act, was SS Gen­er­al Karl Wolff, a major war crim­i­nal who had gone into the arms trade in Europe after the war. . . . Grom­bach worked simul­ta­ne­ous­ly under con­tract to the Depart­ment of State and the CIA. The ex-mil­i­tary intel­li­gence man suc­ceed­ed in cre­at­ing ‘one of the most unusu­al orga­ni­za­tions in the his­to­ry of the fed­er­al gov­ern­ment,’ accord­ing to CIA Inspec­tor Gen­er­al Lyman Kirk­patrick. ‘It was devel­oped com­plete­ly out­side of the nor­mal gov­ern­men­tal struc­ture, [but it] used all of the nor­mal cov­er and com­mu­ni­ca­tions facil­i­ties nor­mal­ly oper­at­ed by intel­li­gence orga­ni­za­tions, and yet nev­er was under any con­trol from Wash­ing­ton.’ By the ear­ly 1950s the U.S. gov­ern­ment was bankrolling Grom­bach’s under­ground activ­i­ties at more than $1 mil­lion annu­al­ly, Kirk­patrick has said. . . .

(Blow­back; Christo­pher Simp­son; Col­lier [Macmil­lan] {SC}; Copy­right 1988 by Christo­pher Simp­son; ISBN 0–02-044995‑X; p. 236.)

26. Among the pri­ma­ry recip­i­ents of Grombach’s and Wolff’s infor­ma­tion was Sen­a­tor Joseph McCarthy, who uti­lized dirt giv­en him by the net­work to smear his oppo­nents. Among those who were trashed dur­ing the McCarthy peri­od were peo­ple involved with Safe­haven.

. . . Grom­bach banked on his close con­nec­tions with Sen­a­tors Joseph McCarthy, William Jen­ner, and oth­er mem­bers of the extreme Repub­li­can right to pro­pel him to nation­al pow­er. . . .Grom­bach’s out­fit effec­tive­ly became the for­eign espi­onage agency for the far right, often serv­ing as the over­seas com­ple­ment to McCarthy’s gen­er­al­ly warm rela­tions with J. Edgar Hoover’s FBI at home . . . . U.S. gov­ern­ment con­tracts bankrolling a net­work of for­mer Nazis and col­lab­o­ra­tors gave him much of the ammu­ni­tion he need­ed to do the job. Grom­bach used his net­works pri­mar­i­ly to gath­er dirt. This was the Amer­i­can agen­t’s spe­cial­ty, his true pas­sion: polit­i­cal dirt, sex­u­al dirt, any kind of com­pro­mis­ing infor­ma­tion at all. ‘He got into a lot of garbage pails,’ as Kirk­patrick puts it, ‘and issued ‘dirty linen’ ‘reports on Amer­i­cans. ‘Grom­bach col­lect­ed scan­dal, cat­a­loged it, and used it care­ful­ly, just as he had done dur­ing the ear­li­er McCor­ma­ck inves­ti­ga­tion. He leaked smears to his polit­i­cal allies in Con­gress and the press when it suit­ed his pur­pos­es to do so. Grom­bach and con­gres­sion­al ‘inter­nal secu­ri­ty’ inves­ti­ga­tors bartered these dossiers with one anoth­er almost as though they were boys trad­ing base­ball cards. . . .

(Ibid.; p. 237.)

27. Part of the inter­dic­tion of Safe­haven was the destruc­tion of the pro­fes­sion­al rep­u­ta­tions of those involved with the effort. As we have seen, Joe McCarthy, Karl Wolff, Grom­bach and com­pa­ny were deeply involved in the anti-com­mu­nist witch hunts. Har­ry Dex­ter White was among the Safe­haven vet­er­ans who had their rep­u­ta­tions destroyed by McCarthy. Dis­cussing McCarthy’s tar­gets, Fred Cook men­tioned the fate of White:

. . . What had they estab­lished in that time, at least to their own sat­is­fac­tion? That out of a total of 2.5 mil­lion fed­er­al employ­ees, only some sev­en­ty-five could even be accused of com­mu­nist activ­i­ties. Of this minis­cule num­ber, two, Harold Ware and Har­ry Dex­ter White, had died. . . .

(The Night­mare Decade; Fred Cook; Ran­dom House [HC]; Copy­right 1971 by Fred Cook; ISBN 0–394-46270‑X; p. 547.)

28. Like Dex­ter White, Safe­haven vet­er­an Lauch­lin Cur­rie had his career destroyed in the McCarthy peri­od. McCarthy suc­cess­ful­ly tarred State Depart­ment offi­cial Owen Lat­ti­more by not­ing that Lat­ti­more had edit­ed some of Currie’s cor­re­spon­dence. (Note that Mr. Emory is skep­ti­cal of “dis­clo­sures” in the 1990’s of Currie’s alleged spy­ing for the Sovi­ets. Note the alter­ation of for­mer Trea­sury Sec­re­tary Morgenthau’s diaries, dicussed below. There has been a vig­or­ous effort at re-writ­ing his­to­ry, and Mr. Emory sus­pects that the accu­sa­tions against Cur­rie may be part of this.)

 . . . Here are to be found only the puny charges that he [Lat­ti­more] know­ing­ly denied . . . (5) that in 1942 he was request­ed to and did take care of the cor­re­spon­dence of Lauch­lin Cur­rie while Cur­rie was away on a trip . . . .

(Ibid.; pp. 376–377.)

29. Among the events that may have helped to bury his­to­ry is the FBI’s doc­tor­ing of Robert Morgenthau’s diaries. Recall that Mor­gen­thau was Trea­sury Sec­re­tary and Safe­haven was ini­ti­at­ed under his juris­dic­tion. Recall, also, that Mor­gen­thau favored the com­plete de-indus­tri­al­iza­tion of Ger­many. Might Hoover’s agents have altered infor­ma­tion relat­ing to Safe­haven?

 . . . Hoover was not only deter­mined to manip­u­late the news, decid­ing what the pub­lic should or should not know; he also altered his­to­ry, in the process exact­ing revenge against one of his most hat­ed ene­mies, ‘that Jew in the Trea­sury,’ Hen­ry Mor­gen­thau, Jr. Dur­ing his near­ly dozen years as sec­re­tary of the trea­sury (1934—45), Mor­gen­thau kept a dai­ly diary, which includ­ed not only his own rec­ol­lec­tions of events but also ver­ba­tim tran­scrip­tions of his meet­ings and tele­phone calls. More­over, as a mem­ber of FDR’s ‘inner cab­i­net,’ he was privy to the behind-the-scenes activ­i­ties of most of the rest of the gov­ern­ment.

Accord­ing to the his­to­ri­an Jason Berg­er, it would be dif­fi­cult to over­state the impor­tance of the Mor­gen­thau diaries to schol­ars of the New Deal era. As ‘the only source of dai­ly hap­pen­ings in Wash­ing­ton,’ Berg­er notes, ‘they are a researcher’s dream.’ For writ­ers rang­ing from Arthur M. Schlesinger, Jr., to Ted Mor­gan, they have been an indis­pens­able source of raw his­to­ry. On leav­ing office, Mor­gen­thau had giv­en his papers to the Nation­al Archives for safe­keep­ing until such time as he decid­ed to make them pub­lic. On learn­ing, in 1951, that Mor­gen­thau was dis­cussing pub­li­ca­tion of the diaries, Hoover struck. . . .

(J. Edgar Hoover: The Man and His Secrets; Copy­right 1991 by Curt Gen­try; Plume [Pen­guin Group] {SC}; ISBN 0–452-26904–0; p. 389.)

30. In addi­tion to re-writ­ing his­to­ry through the doc­tor­ing of Morgenthau’s diaries, it appears that oper­a­tives may have doc­tored oth­er mem­oirs of U.S. politi­cians. How many oth­er politi­cians have had their mem­oirs doc­tored? How many gov­ern­ment agen­cies beside the FBI have been involved in such oper­a­tions?

. . . ‘It was a very covert oper­a­tion,’ a senior agent who head­ed the raid­ing par­ty has recalled, ‘damn covert. There were five of us, and we were all sworn to absolute secre­cy. We even left the Wash­ing­ton field office by var­i­ous devi­ous routes. And we’d go in [an out-of-the-way room at the Nation­al Archives] at dif­fer­ent times so no one would know five agents were in that room. And we were the only ones who had a key.’ Their only equip­ment, which they car­ried in their brief­cas­es, was scis­sors. ‘We lit­er­al­ly went through [the diary] with scis­sors, cut­ting out any ref­er­ences which would be unfa­vor­able to Mr. Hoover or the FBI. They were just phys­i­cal­ly excerpt­ed right out of the diary itself.

Our job was to cut out every­thing which, even by innu­en­do, might indi­cate that Mr. Hoover had feet of clay.’ The pages were then retyped and renum­bered so that there would be no indi­ca­tion that any­thing was miss­ing. The whole oper­a­tion took sev­er­al weeks. What they left behind for the his­to­ri­ans who fol­lowed was a his­to­ry of the New Deal years as approved by J. Edgar Hoover. Although he was not per­son­al­ly involved, the senior agent heard from the Bureau grapevine that Pres­i­dent Roo­sevelt’s papers had been sim­i­lar­ly ‘san­i­tized.’ Accord­ing to librar­i­ans at the Franklin D. Roo­sevelt Library at Hyde Park, New York, many FBI reports are miss­ing. And still oth­ers have been changed. . . .

(Ibid.; pp. 389–90.)

31. Although the infor­ma­tion is not in the body of the actu­al broad­cast, it is inter­est­ing to con­tem­plate the evo­lu­tion of the milieu that blocked Oper­a­tion Safe­haven. Dulles became direc­tor of the CIA under Eisen­how­er, while his broth­er John Fos­ter became Sec­re­tary of State. [John Fos­ter Dulles, like Allen, was a part­ner in Sul­li­van and Cromwell, the influ­en­tial Wall Street law firm that played a promi­nent role in U.S. invest­ment in the Third Reich.] Lyman Lem­nitzer became Chair­man of the Joint Chiefs of Staff. Wis­ner became a Deputy Direc­tor of the CIA. With the excep­tion of John Fos­ter Dulles (who died in the late 1950’s) all of these peo­ple were in office when Kennedy became Pres­i­dent, after defeat­ing Richard Nixon, who was part of the same milieu. Nixon, a pro­tégé of Allen Dulles, presided over the Cru­sade for Free­dom, which brought Nazi war crim­i­nals into the U.S. for polit­i­cal pur­pos­es. (For more about the Cru­sade for Free­dom, see—among oth­er programs—FTR#465.)

Discussion

One comment for “FTR #578 Darkness at Sunrise: The Interdiction and Cover-Up of Operation Savehaven”

  1. http://www.tabletmag.com/jewish-news-and-politics/143053/hitlers-american-banker?all=1

    Meet the Amer­i­can Banker Who Helped Hitler Loot Jew­ish Gold—While Spy­ing for the OSS

    Thomas McKit­trick, head of the Swiss-based Bank for Inter­na­tion­al Set­tle­ments, was a key go-between for the Axis and the Allies
    By Adam LeBor|August 30, 2013 12:00 AM|Comments: 8

    After Thomas McKit­trick, the for­mer pres­i­dent of the Bank for Inter­na­tion­al Set­tle­ments, died in a New Jer­sey nurs­ing home in 1970, at age 81, the New York Times eulo­gized him as a world financier. His brief obit­u­ary described him as a man suf­fi­cient­ly dar­ing to attend a bank meet­ing in Switzer­land in 1940 “with­in earshot of a French-Ger­man artillery duel,” while his peers vot­ed by proxy instead. But like many obit­u­ar­ies, McKittrick’s death notice was more notable for what it omit­ted.

    As head of the BIS, head­quar­tered in Basel, from 1940 to 1946, McKit­trick played a cru­cial role in abet­ting Hitler’s war—and, at the same time, in reveal­ing details about his Nazi col­leagues to his friends in Wash­ing­ton, D.C. On McKittrick’s watch, the BIS will­ing­ly accept­ed loot­ed Nazi gold, car­ried out for­eign exchange deals for the Reichs­bank, and rec­og­nized the Nazi inva­sion and annex­a­tion of con­quered coun­tries. By doing so, it also legit­imized the role of the nation­al banks in the occu­pied coun­tries in appro­pri­at­ing Jew­ish-owned assets. Indeed, the BIS was so indis­pens­able to the over­all Nazi project that the vice-pres­i­dent of the Reichs­bank, Emil Puhl—who was lat­er tried for war crimes—once referred to the BIS as the Reichsbank’s only “for­eign branch.” In the clos­ing months of the war, as Amer­i­can GIs fought their way across Europe, McKit­trick was arrang­ing deals with Nazi indus­tri­al­ists to guar­an­tee their prof­its after the Allied vic­to­ry.

    But McKit­trick was also a key con­tact between the Allies and the Nazis, pass­ing infor­ma­tion back and forth from Wash­ing­ton to Berlin. His rela­tion­ship with the Third Reich was encour­aged both by fac­tions with­in the State Depart­ment and by the lead­er­ship of the Office for Strate­gic Ser­vices, the pre­de­ces­sor of the Cen­tral Intel­li­gence Agency. He also served as a back-chan­nel between anti-Nazi Ger­man busi­ness inter­ests and the Unit­ed States—and ulti­mate­ly served to help pre­serve the pow­er of Ger­man indus­try after the war, over the oppo­si­tion of no less a fig­ure than Trea­sury Sec­re­tary Hen­ry Mor­gen­thau.

    ***

    Born in St. Louis in 1889, McKit­trick grad­u­at­ed from Har­vard in 1911. He joined the U.S. Army in 1918, at the end of WWI, and was sent to Liv­er­pool, Eng­land. There he was sec­ond­ed to British mil­i­tary intel­li­gence, check­ing that no spies were using the docks to pass in and out of the coun­try. After the armistice in Novem­ber 1918, McKit­trick was dis­patched to France to work with the Allied occu­pa­tion forces. The fol­low­ing year he returned to New York and start­ed work at Lee, Hig­gin­son & Com­pa­ny, then a renowned Boston invest­ment house.

    In 1921, McKit­trick was sent to Lon­don to work for the firm’s British wing, and he was made a part­ner. He quick­ly built up an impres­sive net­work of con­tacts with inter­na­tion­al con­nec­tions. Much of his time was spent work­ing on Ger­man loans and invest­ments, many of which were arranged by John Fos­ter Dulles, then a lawyer work­ing at the immense­ly pow­er­ful law firm of Sul­li­van and Cromwell. McKit­trick enjoyed his time in Lon­don and became a kind of hon­orary Eng­lish­man, com­plete with a but­ler who ironed his copy of the Times of Lon­don each morn­ing before he read it.

    McKittrick’s involve­ment with the BIS began in 1931, when he joined the Ger­man Cred­its Arbi­tra­tion Com­mit­tee, which adju­di­cat­ed dis­putes involv­ing Ger­man com­mer­cial banks. One of the oth­er two mem­bers was Mar­cus Wal­len­berg, of Sweden’s Enskil­da Bank, who taught McKit­trick about the intri­ca­cies of inter­na­tion­al finance. Mar­cus and his broth­er Jacob were two of the most pow­er­ful bankers in the world. Dur­ing the war, the Wal­len­berg broth­ers used Enskil­da Bank to play both sides and har­vest enor­mous prof­its. (Their nephew Raoul would lat­er save tens of thou­sands of Hun­gar­i­an Jews before dis­ap­pear­ing into the Sovi­et gulag, aban­doned by his uncles.) In May 1939 McKit­trick was offered the posi­tion of pres­i­dent of the BIS, which he read­i­ly accept­ed. Once he was in office, Mar­cus Wal­len­berg remained his most impor­tant men­tor, teach­ing the Amer­i­can banker how to nego­ti­ate the del­i­cate path between the oppos­ing Euro­pean powers—just as the Wal­len­bergs them­selves had so skill­ful­ly done.

    At first glance, McKit­trick seemed a curi­ous choice to run the world’s most influ­en­tial bank, espe­cial­ly dur­ing wartime. He was a lawyer by train­ing with no direct expe­ri­ence of cen­tral bank­ing. But that did not mat­ter, for McKit­trick was the ide­al con­tact per­son between both sides: He was an Amer­i­can, and thus, when he was appoint­ed in 1940, a cit­i­zen of a coun­try that was still neu­tral in the grow­ing war between the Axis and the Allies. He had excel­lent con­nec­tions in Wash­ing­ton and on Wall Street, in Lon­don and Berlin.

    The BIS was found­ed in Basel in 1930, where it is still head­quar­tered today. Osten­si­bly set up as part of the Young Plan to admin­is­ter Ger­man repa­ra­tions pay­ments for WWI, its real pur­pose was detailed in its statutes: to “pro­mote the coop­er­a­tion of cen­tral banks and to pro­vide addi­tion­al facil­i­ties for inter­na­tion­al finan­cial oper­a­tions.” The estab­lish­ment of the BIS was the cul­mi­na­tion of the cen­tral bankers’ decades-old dream to have their own bank—powerful, inde­pen­dent, and free from inter­fer­ing politi­cians and nosy reporters. Under the terms of the found­ing treaty, the bank’s assets could nev­er be seized, even in times of war. Most felic­i­tous of all, the BIS was self-financ­ing and would be in per­pe­tu­ity. Its clients were its own founders and shareholders—the cen­tral banks. The BIS, boast­ed Gates McGar­rah, an Amer­i­can banker who served as its first pres­i­dent, was “com­plete­ly removed from any gov­ern­ment or polit­i­cal con­trol.”

    Based in a for­mer hotel near Basel’s cen­tral rail­way sta­tion, the BIS swift­ly made itself into the prin­ci­pal pil­lar of the new inter­na­tion­al glob­al finan­cial sys­tem at a time of world­wide finan­cial cri­sis. It orga­nized bailouts for Aus­tria, Spain, and Hun­gary. It pro­vid­ed bank­ing ser­vices for cen­tral banks. Its annu­al reports on the state of the glob­al econ­o­my were soon required read­ing in the world’s trea­suries. Every month, the BIS brought togeth­er some of the most pow­er­ful cen­tral bankers in the world, in con­di­tions of extreme secre­cy, to dis­cuss the world econ­o­my. Reporters were for­bid­den from even look­ing into the room where the direc­tors met after they had left. The cabal of cen­tral bankers, aid­ed by their numer­ous friends on Wall Street, includ­ing John Fos­ter Dulles, the future Amer­i­can sec­re­tary of state, and his broth­er Allen Dulles, had been instru­men­tal in rebuild­ing Ger­many after WWI—a project that con­tin­ued after Hitler took pow­er in 1933.

    ***

    Before he moved to Basel, McKit­trick had estab­lished him­self as a valu­able go-between for the Amer­i­cans. In Octo­ber 1939, lawyers for Ernst Han­f­s­taengl, Hitler’s for­mer pro­pa­gan­da chief, asked McKit­trick to pro­vide a char­ac­ter ref­er­ence for their client. Han­f­s­taengl, a Har­vard grad­u­ate, had lived in New York and was well con­nect­ed in Amer­i­can high soci­ety. He returned to Ger­many to become one of Hitler’s ear­li­est back­ers. Han­f­s­taengl was appoint­ed for­eign press chief in 1931, and his job was to present a mod­er­ate, sophis­ti­cat­ed face to jour­nal­ists. How­ev­er, his eccen­tric man­ner­isms, dry sense of humor, and close con­nec­tion to Hitler made him ene­mies, and he fled in 1937, even­tu­al­ly wind­ing up in a British prison camp. McKit­trick was ready to declare that the for­mer Nazi spin doc­tor would not act against British inter­ests if he were set free—although it is unclear how McKit­trick could know this. Han­f­s­taengl was duly released and sent to the Unit­ed States, where he com­piled psy­cho­log­i­cal pro­files of Nazi lead­ers for Amer­i­can intel­li­gence.

    McKit­trick was an admir­er of the new Ger­many and, like many in his social and busi­ness cir­cles at that time, had an ambiva­lent atti­tude toward Jews. After Kristall­nacht, the Ger­man pogrom of Novem­ber 1938, he used his con­tacts to help Rab­bi Israel Mat­tuck, of the Lib­er­al Jew­ish Syn­a­gogue in Lon­don, arrange the immi­gra­tion of Ger­man Jews. Mat­tuck wrote a grate­ful note thank­ing McKit­trick “most hearti­ly.” Lat­er on, in August 1942, Paul Drey­fus, a Basel banker, asked McKit­trick to write a let­ter of intro­duc­tion for him to Leland Har­ri­son, the Amer­i­can ambas­sador to Switzer­land. McKit­trick oblig­ed but made his feel­ings about Drey­fus clear in a sep­a­rate let­ter to Har­ri­son. “He is, as you will sur­mise, a Jew, but a good sort who is doing every­thing he can to help his unfor­tu­nate coun­try­men.”

    McKit­trick start­ed work in Basel in Jan­u­ary 1940. The out­break of war in Europe posed exis­ten­tial choic­es for the BIS man­age­ment. There were three options: liq­ui­date the bank, down­size and become dor­mant until the end of hos­til­i­ties, or remain as active as pos­si­ble with­in the bounds of the declared pol­i­cy of “neu­tral­i­ty.” The direc­tors were unanimous—and already think­ing ahead of the needs of transna­tion­al cap­i­tal: The BIS must be kept going to assist with post­war finan­cial recon­struc­tion. McKit­trick assured the Swiss author­i­ties that the bank would be neu­tral and the staff would not “under­take polit­i­cal activ­i­ties of any sort what­so­ev­er on behalf of any gov­ern­ments or nation­al orga­ni­za­tions.”

    The bank was indeed a bizarre island of neu­tral­i­ty. Basel is perched on the north­ern Swiss bor­der, over­look­ing both France and Ger­many. Just a few miles away, Allied and Nazi troops were fight­ing and dying. But at the BIS, nation­als of oppos­ing sides worked togeth­er in cour­te­ous har­mo­ny. Roger Auboin, the man­ag­er, was a French­man. Paul Hech­ler, the assis­tant man­ag­er, was a Ger­man, a Nazi par­ty mem­ber who signed his cor­re­spon­dence ‘Heil Hitler,’ as Ger­man law required. Rafaele Pilot­ti, the bank’s sec­re­tary, was Ital­ian. British nation­als also worked at the bank. After the fall of France, the BIS and the staff were tem­porar­i­ly evac­u­at­ed from Basel, in antic­i­pa­tion of a Nazi attack. But the Ger­man inva­sion of Switzer­land nev­er mate­ri­al­ized. Switzer­land was far more use­ful to the Nazis as a neu­tral laun­der­er of Nazi gold, a sup­pli­er of hard cur­ren­cy, and a finan­cial chan­nel to the rest of the world than as anoth­er ter­ri­to­ry under Nazi rule.

    In any case, McKittrick’s dec­la­ra­tions of neu­tral­i­ty soon proved worth­less. He and the rest of the bank’s man­age­ment turned the BIS into a de fac­to arm of the Reichs­bank. This was not a result of iner­tia, pas­siv­i­ty, or bureau­crat­ic sloth. It fol­lowed from a series of delib­er­ate pol­i­cy deci­sions. The BIS accept­ed Nazi gold loot­ed from occu­pied coun­tries such as Bel­gium until the final days of the war, when even neu­tral coun­tries refused the plun­der. The BIS rec­og­nized the forcible incor­po­ra­tion of 10 coun­tries, includ­ing France, Bel­gium, Greece, and the Nether­lands, into the Third Reich. The BIS allowed the Nazi occu­pa­tion regimes to take own­er­ship of those nations’ BIS shares, so that the Axis bloc held 64.7 per­cent of the bank’s vot­ing stock. Board meet­ings were sus­pend­ed, but Annu­al Gen­er­al Meet­ings con­tin­ued, with mem­ber banks vot­ing by proxy.

    McKit­trick was espe­cial­ly close to Emil Puhl, the Reichs­bank vice-pres­i­dent, whom McKit­trick described as his friend. Puhl, who was a direc­tor of the BIS, was a reg­u­lar vis­i­tor to Basel. In autumn 1941 McKit­trick gave Puhl a tuto­r­i­al on the Lend-Lease pro­gram, under which the Unit­ed States sup­plied the Allies with arms, ammu­ni­tion, and oth­er war materiel. The act, passed in March of that year, effec­tive­ly marked the end of the Unit­ed States’ pol­i­cy of neu­tral­i­ty. But America’s entry into the war did not affect McKittrick’s cor­dial and pro­duc­tive rela­tion­ship with the Reichs­bank. Puhl wrote of McKit­trick in Sep­tem­ber 1942, “Nei­ther his per­son­al­i­ty nor his man­ner of con­duct­ing busi­ness have been any cause for any crit­i­cism what­so­ev­er.”

    The Reichs­bank great­ly val­ued its rela­tion­ship with the BIS. Berlin con­tin­ued to pay inter­est on the BIS’s pre­war invest­ments in Ger­many, even though that inter­est con­tributed to the bank’s div­i­dends, which were paid to its share­hold­ers, includ­ing the Bank of Eng­land. Thus, through the BIS, Nazi Ger­many was con­tribut­ing to Britain’s wartime econ­o­my. It was a price worth pay­ing, Puhl believed. Some of the BIS’s div­i­dend pay­ments to share­hold­ers in Nazi-occu­pied coun­tries went through the Reichs­bank, thus giv­ing Berlin access to the for­eign exchange trans­ac­tions and allow­ing it to charge a fee for its ser­vices.

    Her­mann Schmitz, the CEO of IG Far­ben, the giant Nazi chem­i­cals con­glom­er­ate, and a BIS board mem­ber, sent his sin­cer­est New Year wish­es to McKit­trick in Jan­u­ary 1941. Schmitz wrote, “For their friend­ly wish­es for Christ­mas and the New Year, and for their good wish­es for my 60th birth­day, I am send­ing my sin­cere thanks. In response, I am send­ing you my heart­felt wish­es for a pros­per­ous year for the Bank for Inter­na­tion­al Set­tle­ments.” It would cer­tain­ly be anoth­er pros­per­ous year for IG Far­ben, one of whose sub­sidiaries man­u­fac­tured Zyk­lon B, the gas used to mur­der mil­lions of Jews.

    ***

    In the win­ter of 1942 McKit­trick trav­eled to the Unit­ed States. His return to New York was the talk of Wall Street. On Dec. 17, 1942, Leon Fras­er, an Amer­i­can banker and him­self a for­mer BIS pres­i­dent, host­ed a din­ner for McKit­trick at the Uni­ver­si­ty Club. Thir­ty-sev­en of the Unit­ed States’ most pow­er­ful financiers, indus­tri­al­ists, and busi­ness­men gath­ered in his hon­or. They includ­ed the pres­i­dents of the New York Fed­er­al Reserve, the Nation­al City Bank, the Bankers’ Trust, and Gen­er­al Elec­tric, as well as a for­mer under-sec­re­tary of the trea­sury and a for­mer U.S. ambas­sador to Ger­many. Stan­dard Oil, Gen­er­al Motors, JP Mor­gan, Brown Broth­ers Har­ri­man, sev­er­al insur­ance com­pa­nies, and Kuhn Loeb also sent exec­u­tives. It was prob­a­bly the great­est sin­gle gath­er­ing of America’s war prof­i­teers. Many of these com­pa­nies and banks had, like McKit­trick, made for­tunes from their con­nec­tions with Ger­many, con­nec­tions that car­ried on pro­duc­ing prof­its long after Hitler took pow­er in 1933 and cer­tain­ly after the out­break of war in 1939.

    But, despite McKittrick’s pow­er­ful con­nec­tions on Wall Street, the BIS was com­ing under pres­sure from the Trea­sury Depart­ment, where Hen­ry Mor­gen­thau and his aide, Har­ry Dex­ter White, were the bank’s most pow­er­ful foes. White was scathing about McKit­trick, describ­ing him as “an Amer­i­can pres­i­dent doing busi­ness with the Ger­mans while our Amer­i­can boys are fight­ing the Ger­mans.” The BIS, like all Swiss banks, need­ed a license to oper­ate in the Unit­ed States, and it had been revoked in 1941. McKit­trick hired John Fos­ter Dulles to get the license unblocked. He also met Mor­gen­thau. The encounter did not go well. Mor­gen­thau walked out after 20 min­utes and rec­om­mend­ed that McKit­trick con­sult Trea­sury experts.

    McKit­trick was then denied per­mis­sion to return to Basel. He spent his time while wait­ing for his pass­port being debriefed by OSS agents about the intel­li­gence he gleaned from his Nazi con­tacts. There was a rich haul. Hitler, McKit­trick revealed, had become inde­ci­sive. “Instead of hav­ing a def­i­nite plan laid out, and pur­su­ing it relent­less­ly, he switch­es from one plan to anoth­er,” the OSS report of McKittrick’s inter­view not­ed. There were even rumors that he had start­ed drink­ing. Despite the soar­ing casu­al­ties on the East­ern Front, and the sur­ren­der at Stal­in­grad, most Ger­mans, McKit­trick explained, still believed state pro­pa­gan­da. He relat­ed how one friend of his in the Reichs­bank said he had to get out of Ger­many every now and again or he would start to believe the pro­pa­gan­da him­self.

    Some of the most intrigu­ing mate­r­i­al the OSS obtained from McKit­trick detailed his role as a back-chan­nel between anti-Nazi Ger­mans and the Unit­ed States. McKit­trick told the OSS that he received “peace feel­ers” from non- or anti-Nazi Ger­mans twice a month. All of them, how­ev­er, argued that, even if a deal was made, Ger­many would remain the dom­i­nant Euro­pean pow­er “with a free hand in the east and a large mea­sure of eco­nom­ic con­trol in west­ern Europe.” McKit­trick also strong­ly empha­sized the BIS’s future use in plan­ning the post­war order. “While it does not con­cern itself with polit­i­cal affairs, it does offer facil­i­ties for the dis­cus­sion of post­war finan­cial and eco­nom­ic ques­tions,” wrote the author of the OSS memo, “and he thinks that a year or two can be saved in get­ting Europe back to work by infor­mal inter­na­tion­al con­ver­sa­tions under its aus­pices.”

    McKit­trick final­ly arrived back in Basel in April 1943. Despite his lob­by­ing and John Fos­ter Dulles’ legal advice, the BIS’s request for exemp­tion was denied, and the bank’s funds in the Unit­ed States remained frozen. There were many in Wash­ing­ton who asked why the State Depart­ment had renewed McKittrick’s pass­port and allowed him to return to Basel, when it was clear that the BIS was aid­ing the Nazi war effort. The answer was 60 miles south, in Berne, at Her­ren­gasse, 23.

    There, McKittrick’s old friend Allen Dulles ran the Swiss branch of the OSS. McKit­trick, also known as OSS code­name 644, reg­u­lar­ly met with Dulles and Amer­i­can Ambas­sador Leland Har­ri­son. The three men, McKit­trick recalled, talked more freely “in those meet­ings than at any oth­er time.” Dulles and Har­ri­son want­ed to know every­thing McKit­trick knew, espe­cial­ly about Nazi mon­ey chan­nels. McKit­trick, they dis­cov­ered, knew a lot. For exam­ple, the BIS held gold for the Reichs­bank, so some­times, when the inter­est was due on the bank’s invest­ments, the BIS sim­ply helped itself to the Nazi gold it held to make up the pay­ments. At oth­er times, the Ger­mans bor­rowed BIS gold for their deal­ings with Swiss banks. This cozy arrange­ment caused no con­cern at the BIS, said McKit­trick, as “we knew that they’d replace it.” McKittrick’s close rela­tion­ship with Emil Puhl, the vice pres­i­dent of the Reichs­bank, was espe­cial­ly val­ued by Dulles and the OSS.

    OSS telegram 3589–90, sent on May 25, 1944—at a time when thou­sands of Jews were still being deport­ed every day to Auschwitz, where most were imme­di­ate­ly murdered—records Puhl’s fears, not that the war was lost, but that the Reichs­bank might lose its priv­i­leged posi­tion dur­ing the recon­struc­tion:

    Not long ago our 644 [McKit­trick] had two lengthy con­ver­sa­tions with Puhl of the Reichs­bank. The lat­ter was extreme­ly depressed, not so much by the idea of Nazi defeat, but by the sit­u­a­tion, which Ger­many will have to con­tend with lat­er. The Reichs­bank has been engaged in work on plans for the recon­struc­tion, and evi­dent­ly they are unable to see where an effec­tive begin­ning can be made.

    Declas­si­fied OSS doc­u­ments reveal that McKit­trick played a cen­tral role in an Amer­i­can psy­cho­log­i­cal-war­fare oper­a­tion known as the “Har­vard Plan,” which aimed to under­mine the morale of Ger­man businessmen—and their sup­port for the Nazi regime. The Stock­holm OSS office pub­lished a wartime newslet­ter called “Infor­ma­tion for Ger­man Busi­ness,” the pur­pose of which was to sug­gest that coop­er­a­tion now would pay hand­some div­i­dends after the Allied vic­to­ry.

    On Feb. 1, 1945, David Williamson, an offi­cial in the OSS Morale Oper­a­tions depart­ment, wrote to code­name 110—Allen Dulles. Williamson sug­gest­ed to Dulles that he set up a sim­i­lar psy­cho­log­i­cal-war­fare oper­a­tion in Switzer­land. He enclosed some draft mate­r­i­al. Notably, all the mate­r­i­al had been passed by the State Depart­ment before it was to be dis­trib­uted. It revealed how McKit­trick was arrang­ing deals with Nazi indus­tri­al­ists to guar­an­tee their prof­its after the war was over. “The new agree­ment will guar­an­tee the Ger­man export inter­ests dur­ing this sec­ond peri­od an export income at least equal to their pre­war rev­enues regard­less of the expect­ed break in the Ger­man car­tel con­trol,” read the doc­u­ment. A sec­ond para­graph out­lined how, even as Allied air­men were bomb­ing Ger­many, nego­ti­a­tions were under way to “pre­serve the indus­tri­al sub­stance of the Reich.” Any­one who ques­tioned this was mere­ly a “left­ist rad­i­cal,” accord­ing to McKit­trick:

    Mr. Thomas H. McKit­trick, the Amer­i­can pres­i­dent of the BIS, has announced his deci­sion to con­tin­ue his efforts for a close coop­er­a­tion between the Allied and Ger­man busi­ness world, irre­spec­tive of the oppo­si­tion of cer­tain left­ist rad­i­cal groups; in these efforts he counts on the full assis­tance of the Amer­i­can State Depart­ment. “After the war such agree­ments will be invalu­able,” said McKit­trick.

    For Mor­gen­thau and White, such “agree­ments” were sim­ply trea­so­nous. They want­ed the coun­try to be dein­dus­tri­al­ized and the pow­er of the Ger­man car­tels bro­ken for­ev­er. For a brief moment, it seemed as though they might tri­umph. In July 1944 the Allies met at Bret­ton Woods to plan the post­war finan­cial sys­tem. There would be a new Inter­na­tion­al Mon­e­tary Fund and an Inter­na­tion­al Bank for Recon­struc­tion and Devel­op­ment. A res­o­lu­tion was passed call­ing for the dis­so­lu­tion of the BIS “at the ear­li­est pos­si­ble moment.”

    But the Dulles broth­ers and their allies, who argued that Ger­many must be rebuilt as rapid­ly as pos­si­ble as a bul­wark against the Sovi­et Union, tri­umphed over Mor­gen­thau and White. The BIS returned the loot­ed Nazi gold, and the calls for its dis­so­lu­tion fad­ed away. Today, the bank is rich­er and more invi­o­lable than ever. Last year, the BIS made a tax-free prof­it of $1.36 billion—an impres­sive sum for a bank with just 140 cus­tomers. Ulti­mate­ly, McKit­trick was proved right: The agree­ments he bro­kered were indeed “invalu­able.”

    After he stepped down as BIS pres­i­dent in 1946, McKit­trick was appoint­ed a vice pres­i­dent of Chase Nation­al Bank in New York, in charge of for­eign loans. He was even laud­ed by those whose stolen goods, in the form of loot­ed Nazi gold, he had trad­ed: That same year, McKit­trick was invit­ed to Brus­sels and dec­o­rat­ed with the Roy­al Order of the Crown of Bel­gium. The hon­or, not­ed a press release, was “in recog­ni­tion of his friend­ly atti­tude to Bel­gium and his ser­vices as Pres­i­dent of the Bank for Inter­na­tion­al Set­tle­ments dur­ing World War II.”

    Addi­tion­al research by Jay Weix­el­baum and Emmanuelle Welch.
    Adapt­ed from Tow­er of Basel: The Shad­owy His­to­ry of the Secret Bank That Runs the World, pub­lished by Pub­li­cAf­fairs.

    ***

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    Posted by Vanfield | September 8, 2013, 11:29 am

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