Grey Wolf: The Escape of Adolf Hitler (13 page)

Both America and Britain placed a high priority on sustaining Spain’s neutrality. If Franco joined the Axis powers, then British Gibraltar would inevitably be captured and the western gate of the Mediterranean Sea closed, forcing Allied oil tankers to sail all the way around Africa via the Cape of Good Hope. To keep Franco amenable, the Allies provided Spain with large quantities of grain and petroleum products. Indeed, Spain’s complete tanker fleet was kept busy throughout the war transporting oil from Venezuela to Spain, courtesy of Standard Oil and the Texas Oil Company, which charged the U.S. government accordingly. For a simple agrarian society such as Spain, this traffic provided a significant surplus of oil over the country’s needs and the difference was sold on to Germany. By the end of the war, Spain had paid off all its debts to Germany and Madrid’s gold reserves had grown from $42 million in 1939 to $110 million in 1945.

PORTUGAL AND SPAIN ESPOUSED
fascist ideologies similar to Nazi Germany’s. It is more difficult to justify the wartime dealings of a liberal democracy such as neutral Sweden. Sweden possessed a mineral resource that was absolutely vital to the Nazi war machine—iron ore, the key ingredient of steel. Sweden’s vast Kiruna-Gällivare mines in Lapland held almost 90 percent of Europe’s high-grade iron ore; Swedish ore exports had underwritten the German steel industry for years and continued to do so until November 1944. One of the fundamental reasons for the German invasions of Denmark and Norway in 1940 was to protect the coastal sea-lanes carrying this continuous supply of iron ore, which amounted to some 10 million tons a year. Sweden was also a major producer of the ball bearings that were essential to every modern weapon system. U.S. intelligence calculated that the German war machine would have ground to a halt within six months if denied Swedish iron ore and the ball bearings manufactured by Svenska Kullagerfabriken (SKF)—a company owned by the Stockholms Enskilda Bank. Of the 100 million ball bearings used each year by German war industries, 60 percent were produced in the SKF subsidiary plants at Schweinfurt and Cannstatt in Germany and most of the remainder came from factories in Sweden.

All these products were paid for in gold or Swiss francs. During World War II, Sweden received 65.7 tons of gold, including 6.6 tons that came from Holocaust victims. The mechanism was simple. Looted gold was moved to Switzerland in diplomatic bags to avoid Swiss customs regulations and deposited in the Swiss National Bank in Bern, BIS, Union Bank of Switzerland, Swiss Bank Corporation, Crédit Suisse, and other financial institutions. These banks then charged commission—commonly 5 percent—for storage prior to dispatch to the central bank of the recipient country. This involved transporting the gold by aircraft, truck convoys, or ship, while insured by Swiss insurance companies. For instance, between May 1942 and February 1943, a series of convoys totaling some 280 trucks marked with Swiss national flags conveyed gold bars with a value of up to $400 million across occupied France to Spain and Portugal.

During the second half of the war, all the neutral countries came under intense pressure from the Allies not to accept payment for any goods or services in Nazi gold. A senior official at the Swiss National Bank (SNB) came up with an ingenious scheme to avoid such censure. Now the Reichsbank would simply sell its gold to Swiss banks in exchange for currency, usually Swiss francs. This money was then deposited in the account of the recipient country at the Swiss National Bank. The country in question was then at liberty to transfer these funds home or else to buy “cleansed” gold from the SNB—which, of course, took a commission on every transaction. Of the $890 million in gold that financed the Nazi war machine, $388 million was processed through the Swiss National Bank and a similar amount, $378 million, through the Bank for International Settlements.

Many other Swiss financial institutions benefited from the Nazi connection. Nazi officials and SS leaders secreted untold millions of dollars’ worth of gold, currency, and artworks in Switzerland. There, the plunder was hidden in numbered accounts that were immune to scrutiny, thanks to the Swiss banking laws originally enacted in 1934 to give anonymity to Jewish depositors fleeing the clutches of the Nazi regime. As the French writer and diplomat
François-René de Chateaubriand
(1768–1848) once observed, “The Swiss, neutral during the great revolutions in the countries surrounding them, have enriched themselves on the destitution of others, and founded a bank on the misfortune of nations.

Chapter 6

E
AGLE
F
LIGHT AND
L
AND OF
F
IRE

BY THE SUMMER OF 1943, the manufacturing capacity of the Soviet Union had recovered from the devastating effects of Hitler’s Operation Barbarossa two years earlier. In the face of the remorseless advance of the Wehrmacht in the summer of 1941, whole armaments factories were moved eastward behind the Ural Mountains and beyond the reach of the invaders. Tanks and aircraft were now being produced in unprecedented numbers while lend-lease supplies from America, Britain, and Canada added significantly to the fighting powers of the Red Army.

In July 1943, the Wehrmacht, painfully rebuilt after the losses of Stalingrad, launched a major offensive code-named
Operation Citadel
against the Kursk salient in central Ukraine, where almost two-thirds of all Soviet armored fighting vehicles, aircraft, and artillery assets were concentrated. In a grueling battle of attrition lasting eight days, the German and Soviet forces fought each other to a standstill. The German Army Groups Center and South lost nearly three hundred tanks and the Soviets three times as many—but the Red Army was left in control of the battlefield and could more easily replace such losses. Germany’s hopes of defeating the Soviet Union had finally failed. Despite German propaganda proclaiming many “defensive triumphs” in the months to come, the
Ostheer
or Eastern Army was never again to mount a major offensive on the Russian Front. From now on, the Red Army would begin its inexorable advance westward toward the borders of Germany.

In the same month as the battle of Kursk, the Western Allies made the first invasion of Europe by amphibious landings in Sicily; Operation Husky cleared the island of German troops by late August, opening the way to the Italian mainland. Reichsleiter Martin Bormann recognized that while the war would continue, these military defeats sounded the death knell of the Third Reich. It was time to plan for the formerly unthinkable—how to save something from the eventual defeat of Nazi Germany. The first requirement was money.

SINCE HE HAD JOINED THE PARTY
in 1926, Bormann had raised many millions of reichsmarks for the NSDAP and for the various funds that supported the lavish lifestyle of the Führer. It was a skill he never lost in all his many years of service to Adolf Hitler. His business acumen was legendary and he was quick to recognize any moneymaking opportunity. It was Bormann who organized some of the
sales of “degenerate art,”
of which one was an auction held on June 30, 1939, at the Grand Hotel National in the Swiss lakeside town of Lucerne. Some 126 paintings and sculptures were on offer, including works by Georges Braque, Paul Klee, Vincent van Gogh, Henri Matisse, and Pablo Picasso that had been stripped from museums in Berlin, Bremen, Cologne, Dresden, Essen, Frankfurt, and other collections. Pablo Picasso’s masterpiece from his Blue Period,
The Absinthe Drinker
, which had been looted from the Jewish Schoeps family, was auctioned for just 12,000 Swiss francs (equal to US$2,700 in 1939, equivalent to about $42,000 today; in June 2010, the Andrew Lloyd Webber Art Foundation sold it for $52.5 million). All the proceeds from this Swiss auction, about 500,000 Swiss francs, were converted into pounds sterling and deposited in the J. Henry Schröder & Co. bank in London for Bormann’s exclusive use; the German art museums did not receive a single pfennig.

With the outbreak of war, Bormann was determined that the Nazi Party should receive its fair share of any plunder from the occupied countries. Following the invasion of the Low Countries, the diamond district of Amsterdam fell into the hands of the Wehrmacht. Some 940,000 carats of cut and industrial diamonds, with a further
290,000 carats of diamonds
from Belgium, were confiscated and processed through Johann Urbanek & Co. of Nuremberg. Such high-value, low-volume items were especially useful for Bormann’s plans to spread the party’s tentacles around the world. In particular, they allowed him to exert complete control over the NSDAP Auslands-Organisation (Foreign Organization) of party members living in countries outside the German Reich, such as the Iberian Peninsula and Latin America. The Foreign Organization also provided excellent cover for intelligence-gathering and the means to manipulate or bribe foreign politicians to support the Nazi cause.

To this end, Bormann acquired his own air and shipping lines to disperse his peddlers of influence and financial assets around the world. These included the previously mentioned Spanish shipping line Compañia Naviera Levantina and the Italian airline Linee Aeree Transcontinentali Italiane (LATI). The latter had run a prewar service to South America from Rome, via Seville in Spain to Villa Cisneros in the Spanish Sahara, then on to Sal in the Portuguese Cape Verde islands, and across the Atlantic to Natal or Recife in Brazil, with final legs to Rio de Janeiro and Buenos Aires. By these means, Bormann acquired a regular pipeline for people and freight to Iberia and South America without using Luftwaffe aircraft or compromising the national airline, Lufthansa. The aircraft of choice was the trimotor Savoia-Marchetti 75 GA (for
grande autonomia
or “long range”), with a payload of a little over one ton and a range of 4,350 miles. This made it an ideal carrier for such items as artworks, gemstones, or large consignments of cash for the German embassies and consulates in South America. On their return flights the aircraft carried
high-value minerals
and other resources.

Much of the money sent to German embassies around the world to underwrite Bormann’s conspiracies was, in fact, in the form of counterfeit British five-, ten-, twenty-, and fifty-pound notes that were less likely to be identified as fakes when circulated in far-flung places. The counterfeit notes were produced from December 1942 to February 1945 during
Operation Andreas
by 142 Jewish prisoners in Blocks 18 and 19 at the Sachsenhausen concentration camp near Berlin. The program was also known as Operation Bernhard after the man in charge of the scheme, SS Maj. Bernhard Krueger. Once the requisite type of paper was finally obtained, various denomination pound notes were forged, with a face value of £134,609,945, equivalent to $377 million in 1944 or $4.6 billion today, representing some 10 percent of all British banknotes in circulation. The original scheme was to drop bundles of counterfeit notes from aircraft over the British Isles in order to destabilize the British economy, but from 1943 Germany had insufficient aircraft available for the operation. Instead, the notes were laundered through Swiss banks or foreign companies, particularly in Holland, Italy, and Hungary.

The imperative for Bormann was now to transfer monies in every shape and form—counterfeit, stolen, or even legitimate government funds—to safe havens abroad. This was achieved as part of an operation code-named Aktion Adlerflug—
Project Eagle Flight
—which involved setting up innumerable foreign bank accounts and investing funds in foreign companies that were controlled by hidden German interests. For example, between 1943 and 1945 more than two hundred German companies set up subsidiaries in Argentina. Money and other assets, such as industrial patents, were transferred through shell companies in Switzerland, Spain, and Portugal to the Argentine branches of German banks such as the Banco Alemán Transatlántico. The funds were then channeled to the German companies operating in Argentina, such as the automobile manufacturer Mercedes Benz—the first Mercedes Benz factory to be built outside Germany. These companies were in turn charged by their German head office higher production costs for products made in Argentina; for instance, the true production cost of a Mercedes truck might be $5,000, but Mercedes Benz Argentina was required to pay Mercedes Benz Germany $6,000 for the components. The difference between the actual cost and the prices paid was then secreted in Argentine bank accounts to be drawn upon after the war, without any fear of scrutiny by the Argentine authorities, let alone the Allies. These same companies became a source of employment for fleeing Nazi war criminals after 1945. For example, Adolf Eichmann worked in the Mercedes Benz factory at González Catán in the suburbs of Buenos Aires under the name of Riccardo Klement from 1959 until agents from Mossad, the Israeli national intelligence agency, abducted him on May 11, 1960.