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Nazi Slave Labor: German Business Ethics, Past and Present
From: Columbia University
| By:
Andreas Mink |
EDITOR'S INTRODUCTION |
During World War II, Nazi Germany forced and transported millions of Jews and captured  Europeans into slave labor in a range of spheres--from domestic servitude to factory work to oppressive hard labor--all for the advancement of the German war effort. In the decades since then, political sensitivity and the overwhelming task of comprehending the atrocities carried out by the Nazis often derailed or obstructed efforts to recompense former laborers. In the summer of 2000, the German government and German companies agreed to provide former forced laborers with some compensation, but the settlement raises the questions of how much compensation is enough, what Germany can do to repair its past mistakes, and how Germany and former slaves can move beyond the past. As editor of Aufbau, the only German-Jewish publication in America, Andreas Mink was on the front lines, following the negotiations and the major figures involved. |
 he debate on Nazi slave labor touches upon the nightmare that Germans of my generation grew up with: "How could this have happened in my country--and can I consider such a country to be 'my country'?" I found the players and their moves fascinating--some very smart, strong-willed and creative people got involved in this. But I also feel uneasy: something happened in the process of translating the crimes of the past into present political and financial terms. This conflict has largely been fought by representatives and descendants of the victims and the perpetrators, and their actions were inevitably dictated by their own interests and agendas. Terms like "moral" and "justice" were overused in this process, with little contemplation of their real meaning. |
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| The German negotiator Count Otto Graf Lambsdorff. | |
Many moments during the negotiations left a deep impression on me. During a lunch break at one of the negotiations, in early December 1999, I went with some members of the Czech delegation to their embassy in Washington. We went to wake up Jiri Sitler, their chief negotiator, who had arrived from Prague in the morning. He's quite young, tall and lanky, and very smart. I followed Vice-Ambassador Antonin Hradilek and Oldrich Stransky, who's a Czech Jew, a survivor, and one of the heads of a Czech survivor organization, into the room where Sitler was resting. The Czechs have quite a sense of humor: Hradilek and Stransky started to talk about how the Germans used to wake up the prisoners in the camps. Then Stransky broke into German: "Los, ihr Hunde, los, raus, antreten!" |
I honestly don't know how to deal with moments like these. The past is still very much with us, and the history of the German crimes will shock anybody who cares to learn about them for many years to come. I'm quite sure that this shock explains the past debate about slave labor to a great extent: You learn about the crimes, you are shocked, you feel a strong urge to turn that shock into action. You want to do something to achieve justice, closure and maybe even some kind of triumph. |
The Berlin Agreement of 17 July 2000
The first class action by lawyers of former slave laborers of the Nazis was filed against German companies in 1998. In July 2000 an agreement was signed in Berlin by the German government and leaders of the German business community on one side and by representatives of five Eastern European governments, Israel, the Jewish Claims Conference, the US government and several dozen lawyers on the other. |
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| Female prisoners at forced labor in a factory owned by the Agfa camera company. | |
The German government and German industry each agreed to contribute 5 billion marks to create a fund to be divided among four groups: former slave laborers; Jews who suffered property damage by Nazi Germany; a future fund for "humanitarian projects" related to the Holocaust; and lawyers' fees and administrative costs. |
The bulk of the fund will address slave labor. Jews and other former inmates of the camps who were under the control of the SS are going to receive up to 15,000 marks each. Eastern Europeans who were deported into the Reich by the governments' organization for labor (its head, Fritz Sauckel, was hanged in Nuremberg) to work for factories, the churches and municipalities will receive up to 5,000 marks. Victims who suffered property damage or "Aryanization" will receive up to 15,000 marks. There's also a sum reserved for "other wrongs" such as medical experiments. These victims are supposed to get a similar sum, around 15,000 marks. |
Several hundred million marks out of the property damage allotment will go to the Claims Conference, to be used for unspecified humanitarian projects. Many survivors are incensed about this concept. They want all the restitution moneys to be distributed among them or used to help them as a group--for example, by buying health care for the needy ones. |
There are 125 million marks earmarked for lawyers' fees. That's not the huge windfall many people say it is, as the agreement wasn't reached as a settlement negotiated by lawyers. |
Is the agreement appropriate?
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| Prisoners at forced labor constructing the Krupp factory at Auschwitz. | |
Many people have asked me, "Is this agreement appropriate?" United States citizens of Japanese descent who were interned during World War II were granted about $23,000 from the US government in 1990. From that, it's obvious that these sums are paltry, although 15,000 marks would make a big difference to an old Jewish survivor living in Kiev. These sums are clearly not appropriate by any measure, but they are not meant to reflect withheld wages or the contribution slave laborers were forced to make to the German war effort. They also don't reflect the pain suffered. So why are they so small? What do these moneys stand for? |
The fund is by definition a "moral gesture." It does not reflect a legal obligation. For me this is the key to understanding this debate. I will therefore try to explain what the very political term "moral gesture" means in the context of slave labor restitution. |
The history
Germany could not have conducted the war and the genocide without forced labor and slave labor. By 1944, more than 10 million non-Germans were being forced to work for the German war effort. In the armament industries, they made up 40 to 50 percent of the workforce. Slave labor was so ubiquitous--people had Ukrainian maids, the churches and abbeys used slave labor in their fields and vineyards--that the Germans forgot about them the way they forgot about other ubiquitous details of the war: bombing raids, pictures of Hitler, the daily reports of the Wehrmacht on the radio. |
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| Female prisoners at forced labor digging trenches at the Ravensbrück concentration camp. | |
Of these laborers, some 2 million might be with us today. As soon as Poland was conquered, in the fall of 1939, Germany started to use Poles as cheap labor. Then they drew on French, Belgian and Dutch prisoners of war and civilians. When Germany invaded the Soviet Union, in the summer of 1941, the whole dimension of the war changed: they started a full-scale program of genocide on the Jews, but they also killed, mostly by neglect, more than 2 million Russian prisoners of war, showing that their need for labor didn't overrule their will to annihilate. Till the end of the war, factions within the regime quarreled over this: the SS wanted to kill the "Untermenschen," while the technocrats around armaments minister Albert Speer wanted to exploit them. |
By the time of Stalingrad in the winter of 1942-3, the Germans conducted slave hunts for Russians, White Russians, Ukrainians and Poles. On market days, cities were cut off and the Wehrmacht and police took all able-bodied young people and put them on trains to the Reich. Most could not even say good-bye to their families. |
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| The corpses of prisoners killed by the SS outside of Gardelegen. | |
Meanwhile, the Germans continued to kill the Jews. They were exploited as slaves while in the ghettos of Poland, but the hundreds of thousands of people there were deported to the camps at a quick rate. Only in the summer of 1944 did the Germans start to consider Jews as a source of labor to be exploited in mines and factories of the Reich, thereby sparing tens of thousands of Hungarian Jews from extermination. |
During the negotiations, Bartosz Jalowiecki of the Polish delegation told me, "The Germans made us Poles and the Russians work for them so that they could conduct war against us and kill the Jews." |
Most of these laborers received little or no pay. In lawsuits after the war, their lawyers asked for back pay and compensation for suffering, and they asked for a payout of the contribution their clients had made to the German economy. |
Although it differs widely from company to company, it is safe to say that most German companies did little to better the fate of their forced or slave laborers. But they actively competed for armament contracts, for raw materials and for forced labor. After the war, they created the myth of having been "agents of the Reich"--that they were forced to accept slaves. |
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| The defendants' dock at the IG Farben trial in 1947. | |
One of the positive outcomes of this debate is that it helps Germany realize to what extent the war had been a national project. Many of the elite in the business community shared the dream of imperialist expansion with the Nazis. That Hitler went ahead to annihilate the Jews wasn't a deal breaker for them. |
Slave labor on trial in Nuremberg and in the early Bundesrepublik
Slave labor was a main charge at Nuremberg. Fritz Sauckel was hanged, and the preparations to indict Germany's business leaders proceeded. But they quickly came to a halt when the Cold War began. Krupp, Flick and some leaders of IG Farben were sentenced, but they were set free during the early 1950s and quickly took up their old positions. |
While the people responsible for slave labor were on trial or already back at their desks, the fate of the former slaves was being discussed at a number of international conferences, starting in Potsdam in the summer of 1945 and continuing up to the famous London Debt Agreement of 1953. Two problems discussed in these negotiations were also key elements of the recent debate: reparations and individual compensation. |
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| The BMW company. | |
While discussing reparations with the Western powers, the German side always stuck to the opinion that slave labor restitution was an issue to be regarded as part of reparations--payments based on diplomatic negotiations and made from one state to the other. Michael Geier, chief of staff to German negotiator Count Otto Graf Lambsdorff, pointed out to me that the Allies had set a precedent for this after World War I. Therefore, claims for individual compensation--say, by a former slave against his employer--were deemed to be out of the question. |
But the German side also pointed to the fact that Germany had to rebuild itself before it could make any payments, even as reparations. It is a staple of the German position up to this day that the crimes were so horrendous and wide-ranging that it's not possible to appropriately compensate the victims for their suffering. Western Germany also was not about to make substantial payments to the Russians--the Cold War was on, and therefore a peace treaty and a settlement of all reparations issues (including slave labor) was deferred to some point in the future when a peace conference would resolve all the remaining questions of World War II. |
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| The US chief negotiator, Undersecretary of Finance Stuart Eizenstat. | |
Between 1950 and 1953, the Adenauer government negotiated with Israel and the Claims Conference to start the Wiedergutmachungs Law (reparations for Nazi confiscations and exile) and the BEG (Bundesentschädigungsgesetz, the West German law for the compensation of victims of Nazi persecution). In 1953, the Germans also met the Allies in London for the famous London Debt Agreement. The leading personality there was Hermann Josef Abs of Deutsche Bank, a key figure in the Nazi economy and the éminence grise of the German business community until his death in 1995. The issue at stake there wasn't slave labor: the Americans wanted Germany to repay outstanding loans made to Germany before the war. This was agreed upon, but, as a side effect, all reparations issues were deferred to the future international peace conference. Thereby the US became a part of the deferral of the slave labor issue. Only Poland rejected the idea that individual claims (as opposed to reparations) should be tabled in London. |
It is very important to note that German industry in those years lobbied the government very heavily to get protection from claims of former slaves. They developed the myth of having been forced to go along with Hitler's "insane policies" to shift their responsibility to the German government. This, in effect, was validated by the laws and decisions made in German courts ever after. |
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| A child working at a machine in a Kovno ghetto workshop. | |
But what about the slaves? Some of them got together to fight the companies. Norbert Wollheim went down in history as the one who started it all. In 1951, he sued IG Farben for profit they reaped by exploiting him under inhumane conditions (undue enrichment). Wollheim was a German Jew from Berlin and was one of the organizers of the "Kindertransporte" to send Jewish children to safety in other countries. He lost his wife and young son in Auschwitz, and he worked at the IG Farben plant there for two years. He battled IG Farben in a German court for years. When the Claims Conference got involved and the pressure mounted, IG settled out of court in 1958. The company paid some 30 million marks to several thousand former slaves. Each one of them got $1,250. |
It is important to note that the company defined these payments as a "moral gesture"--not a result of a legal obligation. For the first time, the newly established German line of defense against individual claims for compensation by former Nazi slaves had held against a very serious assault. In the years to come, German courts time and again dismissed such claims, ever strengthening the wall. Some companies (Siemens and Krupp) and the government made a few payments to former slaves, especially in Western Europe, but only after significant political pressure had been mobilized against Germany. Every time, these payments were defined as being "moral" or "humanitarian" gestures, while any legal obligation was denied. |
Resurgence and settlement
From the early '60s, the slave labor issue was dormant for many years. Once in a while, some survivor would try to challenge the companies in a German court, but they were usually turned down. The Washington lawyer Michael Hausfeld told me that he tried to sue the companies in the '70s, but to no avail. Only in the mid-1990s had things suddenly changed; in the US, an alliance of politicians, lawyers and Jewish officials started to fight the Swiss banks. In the summer of 1998 they managed to force the Swiss to return accounts to survivors and their heirs. Hausfeld, who in October 1996 had filed the most important class action against the banks, had already included profits made from slave labor in his suit against the Swiss. I asked him in March 1998 if he would also sue German companies, and he said he would. |
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| The Bayer company. | |
A few months later, the fight started in earnest. In all, some 60 lawsuits were filed by dozens of firms against a huge number of German industrial and banking firms. Lawsuits against many European insurance companies had already been filed in early 1997. |
The German companies took some time to find an answer to this surprising attack. They hired the same big law firms the Swiss had used, chief among them Wilmer, Cutler, Pickering in Washington. They managed to find a common position only after the German people had voted Helmut Kohl out of office in November 1998; prodded by the Greens, the new coalition of Social Democrats and Greens put slave labor on their agenda. It is one of the most astounding turns in this story that the Green foreign minister, Joschka Fischer, did not take over responsibility for the negotiations; after an unhappy interlude under Bodo Hombach, Otto Graf Lambsdorff managed the negotiations for the German side. |
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| Otto Graf Lambsdorff with US Secretary of State Madeleine Albright. | |
To make a long story short, the German position prevailed in the end. But the pressure put on them in the courts, by the media and, last but certainly not least, by the US government convinced them that they had to come up with significant payments--by far the biggest they had ever made for slave labor. The fund we have today is a "moral gesture," but it has a strong legal component: by accepting a payment out of the fund, Nazi victims give up any legal claim against Germany and German companies. This is somewhat puzzling, but it fulfills the US government's promise to German companies for "legal closure"--protection against any further legal threat. |
A key step to this result was the refusal of courts in New Jersey in September 1999 to accept slave labor class actions against Ford, Degussa and Siemens. On the night of September 12, one of the lawyers I talked to cried with rage and disappointment. By then, the US government had taken on a very active role and--this is mainly the historic contribution of Michael Hausfeld, who acted as their legal adviser and strategist--Poland, the Czech Republic, Ukraine, Belarus and Russia had become a part of the negotiations. The US acted together with the Germans but also strongly pushed for the 10 billion number; Bill Clinton wrote a letter to Germany's chancellor Gerhard Schröder to that effect. |
The Germans paid because they faced tremendous pressure. Suddenly, American Jews, many of them second-generation Holocaust survivors from diverse areas--local and national politics, the legal profession, Jewish organizations--had independently "found" these issues and, while they were fighting among themselves, they still managed to put it on the international agenda. With the end of the Cold War and Germany's reunification, the time for a final reckoning with the past had come. |
It took me a long time to realize how important this issue is for the German government. It is a core national interest to curb any new discussion on reparations or any material or legal dimension of the German crimes. This is not because of a moral deficiency, like not being able to deal with the past or the old urge to draw the infamous "Schlusstrich," an end to discussion of the past. In the minds of the government, the German state and the German economy were suddenly facing incalculable dangers--a new, wide-ranging debate on reparations and restitution would have weakened Germany's international position to a great extent, while its economy and social fabric could have suffered, too. By necessity, the government once again had to shield the companies to prevent a breach in the line of defense established in the early 1950s. |
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| German Chancellor Gerhard Schröder. | |
Therefore, the German government, especially including the experts in the foreign and finance ministries, has a very strong urge to control the way the new foundation works. One can gauge the importance of this issue by that. Now that the whole thing is nearly over, they don't want any more surprises or uncontrollable individuals--which is why Chancellor Schröder took it upon himself to force a member of the Green Party out of the race for an executive position on the foundation's board. |
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| The Allianz Insurance Company building, under reconstruction during the Nazi period. | |
I might have neglected the companies here. I think that many managers involved face exceedingly difficult questions; they have to protect their companies and the shareholders' interests--among them American mutual funds. They are not paid to dwell on moral questions. These men weren't involved in the crimes, but at the same time some of them feel that, as a spokesman of the insurance company Allianz once told me, "a chill grips their hearts" when they inform themselves on their firms' past. But whether that chill has enough impact to make all of the companies open their archives for research, as some of them already have done, I don't know. |
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