International Business: Germany
Holocaust Reparations: German CEOs Unlock Their Vaults
"They've decided it's better to tell the whole truch now"
Rolf Ernst Breuer, head of Frankfurt-based Deutsche Bank, had an ugly day on Feb. 1. Bank historian Manfred Pohl paid the chief executive an urgent visit to tell him that researchers hired by the bank had uncovered proof that Deutsche helped finance construction of Auschwitz, the notorious death camp, during World War II. Breuer, Pohl recalls, was stunned. But when Pohl said he planned to publish the information as soon as possible, Breuer's response was unequivocal. "He said, `Do it,"' Pohl recalls. "`We want this out in the open."'
Chances are, more German CEOs will soon be getting such visits. After years of dawdling, many of Germany's biggest financial institutions, including Dresdner Bank, Commerzbank, and insurance giant Allianz, are coming clean on their wartime doings. They are hiring prominent historians to dig into Nazi-era records and other historical data. "We have complete freedom," says Gerald D. Feldman, a University of California at Berkeley professor who is leading the project at Allianz. "They've decided it's better to tell the whole truth now than to let it come out in dribbles."MILES OF FILES. That's one reason the Germans are likely to cut a speedy reparations deal with the World Jewish Congress to aid Holocaust survivors. Four days after Pohl's Feb. 4 press conference in Frankfurt announcing his Auschwitz evidence, Breuer was off to Washington to parley with U.S. and Israeli officials, as well as the WJC. Partly, he wants to avoid a controversy that could delay his bank's $10 billion takeover of New York-based Bankers Trust. But he and other bankers also worry that if they don't act fast, the information historians find back home will become fodder for U.S. lawsuits.
Breuer predicts that details of a reparations fund will be worked out by May. Bonn has already agreed to set up an umbrella fund to cover liabilities relating to forced labor, slave labor, and financial wrongdoing by German banks and companies. Talks on the fund's size are just beginning, but analysts figure Deutsche alone may have to contribute up to $1 billion. The goal on all sides is to be paying claims by Sept. 1, the 60th anniversary of the start of World War II.
New York City Comptroller Alan G. Hevesi, who has pressured European institutions to make restitution to Holocaust survivors and their heirs, commends the German government and Deutsche Bank for being "more than cooperative" in addressing restitution issues. But Hevesi still urges U.S. bank regulators not to sign off on the Bankers Trust merger until a pact is fleshed out. Breuer contends "the merger is moving ahead absolutely undisturbed."
Why are so many German companies coming clean now? One big reason is that the generation of CEOs taking over at German companies wants to put war guilt behind them. At once-recalcitrant Dresdner Bank, "there was a 180-degree turnaround" when new CEO Bernhard Walter took over in late 1997, says Klaus-Dietmar Henke, director of the Hannah Arendt Institute for Research of Totalitarianism in Dresden, who is leading the probe of Dresdner Bank's Nazi-era activities.
Nevertheless, Dresdner is probably the most vulnerable to embarrassing revelations. "Historians know Dresdner financed concentration camps and the Aryanization of Jewish property," notes Christopher M. Kopper, a visiting history professor at the University of Minnesota whose father is chairman of Deutsche's supervisory board. "It's also known that the SS used Dresdner as a sort of house bank." After less than a year of research, Henke's team has already published a book on Dresdner's dealings in looted Nazi gold.
The main thing slowing the historians down is the sheer volume of material to be perused. Deutsche has gathered nearly six miles of files from its branches. That's how receipts showing the bank's Auschwitz dealings were discovered at the Hanover branch. "It's late, and the victims are old," says Henke. "But at least now something is being done."By Thane Peterson in Frankfurt, with Joan Warner in New York