IBM and the Holocaust (77 page)

Captain Gamzon stressed that 25,000 families were lost. But so many more were saved due to the heroism and sacrifice of the resistance. He saluted the men and women of the underground, people who had been tortured and deported to concentration camps, but never cracked. Rene Carmille was not there to hear those words. Carmille was one of the valiant who died in Dachau rather than make the punch cards work.
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It took more than a year of petitions through the State Department, but IBM was able to recover all of its French machines from across Europe. Eventually, it secured all the money in its bank accounts at Credit Lyonnais. With the Holleriths back and the money recouped, the war was over for IBM France.
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SWITZERLAND WAS
the commercial nexus of World War II. Its famous financial secrecy laws, neutrality, and willingness to trade with enemies made Switzerland the Reich's preferred repository for pilfered assets and a switch-board for Nazi-era commercial intrigue. In 1935, when talk of war in Europe became pervasive, Watson moved the company's European headquarters from Paris to Geneva. Doing business with Nazi Europe via Geneva involved a constant ebb and flow of incoherent blacklist enforcement and acquiescence by American commercial attaches. Deals and denials characterized virtually the length and breadth of IBM's presence in Geneva.
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Murky transactions were fundamentally untraceable since they could filter through a maze of banks or their branches, many of them newly created by Germany, scattered across occupied and neutral countries. New York branches of Swiss banks only complicated the trail, prompting Treasury officials in Washington to dispatch squads of investigators to Manhattan seeking evidence of trade with the enemy.
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Information even reached the Treasury that IBM might help establish its own international bank to link Nazi and American economic interests, thus only further obscuring Reich transactions and financing projects. In early 1942, the Treasury Department's Monetary Research Division moved quickly to block any such initiative. On July 13, 1942, Acting Treasury Secretary D. W. Bell took the unusual precaution of contacting Watson directly to stymie the possibility. Watson quickly declared neither he nor his company were involved in the enterprise, directly or through surrogates. For emphasis Acting Secretary Bell sent Watson an extraordinary, almost accusatory acknowledgment of his declaration: "Treasury takes note of your statement that the International Business Machines Corporation has no knowledge of any plan for the formation of an inter-continental credit bank financed jointly by American, French, and German capital. The Treasury also acknowledges your statement that the International Business Machines Corporation has not authorized and will not authorize anyone to act for it in the formation of such a bank."
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Bell added this clear warning to Watson: "You are, of course, aware that any action in connection with such a bank would be illegal unless done in conformity with the provisions of the Trading with the Enemy Act and Foreign Funds Control."
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Watson snapped back to Bell with a rare one-sentence letter: "Referring to the last paragraph of your letter of July 13, I was aware that the plans were illegal and that is why I wanted the Treasury Department to know that no one with our company had discussed or had anything to do with the proposition."
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Any illusion that IBM NY would not receive regular reports from its European agents about the most detailed operational vicissitudes was contradicted by the numerous Monthly Narratives, quarterly financial reports, and special punch card requests funneled through Sweden, Switzerland, Spain, and America's own diplomatic pouches.
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Certainly, the record was well-papered to protect IBM's legal position. From 1942 to 1945, IBM NY would wire uncharacteristically verbose and belabored instructions to its managers in neutral Europe to repossess machines, stop trading with subsidiaries in enemy countries, and terminate contracts with blacklisted firms.
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Each such instruction stood out as a veritable disquisition of deniability laced with highly patriotic rationales for obeying the law against trading with the enemy. But when blacklists arrived, Watson's most trusted managers in Sweden and Switzerland would "get strangely busy," as one IBM internal probe termed it. Or managers would ignore New York's lengthy tractates to stop direct trading with Axis nations—sometimes delaying more than a year. In the case of IBM in Sweden, a Department of Justice investigator recorded that it was not until April 1943, more than one year after Swedish manager Tag Lundberg first received instructions to "cease trading with the enemy," that the wholly-owned subsidiary complied with an explicit order from New York.
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In many instances, elaborate document trails in Europe were fabricated to demonstrate compliance when the opposite was true.
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Nonetheless, the true record would be permanently obscured.

During the war years, IBM's own internal reviews conceded that correspondence about its European business primarily through its Geneva office was often faked.
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Dates were falsified.
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Revised contract provisions were proffered to hide the true facts.
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Misleading logs and chronologies were kept.
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During the protracted delays, millions of punch cards would be hurriedly shipped by IBM's neutral country subsidiaries to enemy countries or blacklisted customers.
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At IBM, time was more than money. Time was punch cards. Once a million cards were punched, they could never be unpunched.

At the vortex of every economic masque in Switzerland was Werner Lier, IBM's European Manager in Geneva until Germany surrendered. As such, he was the company's top officer in Europe involved with virtually every transaction in every country throughout the war.
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Yet even IBM's own review at the time concluded that Lier's dates, declarations, and documentation amounted to a prolonged and elaborate series of charades.

For instance, in late March 1942, Lier negotiated contracts with two blacklisted Swiss munitions companies. Yet on April 27, 1942, Lier sent a cable to IBM NY pretending that the two newly negotiated contracts were actually signed before the war, and then openly asking New York to petition the U.S. government for a special exemption: "U.S. Commercial Attache Bern requests we cancel contracts," cabled Lier. "Can you intervene to maintain installations on basis contracts signed before war."
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But IBM's own internal review later confirmed, "This is a definitely misleading statement because, apart from the two contracts here under consideration, three other contracts had been signed by the customer after the United States had entered into the war . . . the machines were supplied and billed by Geneva, and payment accepted. Mr. Lier made thereby a deliberately misleading statement. . . . This deception is the more serious since none of the contracts signed before the war existed any longer."
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IBM also found a pattern of falsified dates. For instance, Lier sent IBM NY a cable July 21, 1942, asserting that a Type 954 Hollerith was installed at a blacklisted customer site in Switzerland on December 31, 1941. However, IBM's own fraud review, citing its Installation Report No. 22, proved the machine was actually installed on March 31, 1942, with rent beginning in April 1942.
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Foot-dragging, false logs, and contrived chronologies were commonplace at IBM Geneva. For example, Lier had created an extensive log to demonstrate how he regularly complied with American consular officials in Bern who demanded IBM cease business with blacklisted companies. Eventually, IBM had to admit in a letter: "Thus it has taken Mr. Lier thirteen days to inform Mr. Herzog [an IBM sales manager] that two of his customers appeared on the 'Black List,' when he [Lier] could have informed Mr. Herzog by telephone on the day he was in possession of this information—namely on March 25 [1942].
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In consequence," the company letter continued, "[American Commercial Attache Daniel] Reagan had pierced the mystery surrounding this case and [refused] . . . to accept Mr. Lier's . . . chronological report, inasmuch as he accuses him of having had these contracts five days after he [Lier] knew that these customers were on the Black List."
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On occasion, even IBM NY could no longer unravel the ruses its key managers were weaving. IBM's own internal review of one case confessed that after June 1942, "we lose track of the case as the correspondence relating thereto was withdrawn from the files."
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Despite IBM's own internal reviews summarizing a pattern of improprieties, Watson allowed Lier to continue at his pivotal post.

Watson himself set the stage for IBM Europe's wartime conduct. In October 1941, he circulated instructions to all subsidiaries: "In view of world conditions we cannot participate in the affairs of our companies in various countries as we did in normal times. Therefore you are advised that you will have to make your own decisions and not call on us for any advice or assistance until further notice."
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That instruction never asked IBM executives to stop trading with the Hitler regime, or place a halt on sales to the camps, the war machine, or any German occupying authority. Watson only asked his companies to stop informing the New York office about their activities.

Despite the illusion of non-involvement, IBM NY continued to play a central role in the day-to-day operations of its subsidiaries. Company subsidiaries regularly traded with Axis-linked blacklisted companies in neutral countries, and even directly with Germany and Italy.
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It was business as usual throughout the war.

As a Swiss national, Lier freely traveled to and from Germany, occupied territories, and neutral countries micro-managing company affairs for Watson.
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Six months after Watson declared IBM Headquarters to be cut off from its overseas units, Lier himself defined IBM Geneva's role not as an autonomous, detached office—but as a nexus, which simply implemented the business decisions made by IBM NY. On April 29, 1942, Lier outlined for the American Consul in Geneva exactly how IBM Geneva operated. "You will readily understand," explained Lier, "that this office is a clearing office between the local organizations in the various countries and the New York Headquarters." Lier added that IBM NY made all the decisions. His function was simply to monitor the business and keep the records. "The European Headquarters in Geneva," he explained, "are, in a way, a representative of the World Headquarters in New York, whose job it is to manage and control European affairs. . . . In short, the functions of the Geneva Office are purely administrative."
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Lier emphasized, "When the local offices require machines or material from our factories in the United States, they pass the order to the Geneva Office which, in turn, transmits it to the New York Headquarters for handling and supplying the machines direct to the local office."
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Perhaps IBM's business philosophy was best expressed by an executive of Belge Watson in an August 1939 letter to senior officers of IBM NY. The letter detailed the company's growing involvement in Japan's aircraft industry. The IBM Brussels executive declared: "It is none of our business to judge the reasons why an American corporation should or would help a foreign Government, and consequently Mr. Decker and myself have left these considerations entirely out of our line of thought. . . . we are, as IBM men, interested in the technical side of the application of our machines."
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But as European territory was liberated in late 1944 and early 1945, re-established national authorities began to hold commercial collaborators responsible. French arrests of IBM people in Paris—despite their ultimate release—were characteristic of the liberation fervor gripping Europe. Lier him self had been the center of many rumors. One story suggested that he had transported Dehomag money to Vichy in harrowing nighttime runs across occupied France.
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Another story hinted that Lier was wanted by the post-War authorities even in Switzerland for bending the financial statutes.
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