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The Art of Cloaking Ownership The Art of Cloaking Ownership The secret collaboration and protection of the German war industry by the neutrals The case of Sweden by Gerard Aalders and Cees Wiebes Amsterdam University Press Netherlands State Institute for War Documentation Cover Design: Erik Cox, Den Haag Typesetting: S&B Office Services, a member of the Boekmaat'Groep, De Meern ISBN 90 5356 179 x © Amsterdam University Press, Amsterdam 1996 All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the editors of this book. Table of Contents Introduction 1 I The Setting 7 1. THE ART OF CLOAKING. A SURVEY. 9 2. STOCKHOLMS ENSKILDA BANK AND THE WALLENBERG FAMILY. 29 II The Facts 35 3. ENSKILDA AND GERMAN BOSCH. 37 4. ENSKILDA AND IG FARBEN. 55 5. SVENSKA KULLAGER FABRIKEN (SKF). 71 6. SECURITIES AND GOLD. 93 III The Aftermath 105 7. THE U.S. EMBARGO AND THE SOVIET-SWEDISH TRADE AGREEMENT. 107 8. THE HUNT FOR THE WALLENBERG BROTHERS. 119 IV Epilogue 155 Notes 163 Sources 187 Index 205 v Abbreviations ADMF Archives Dutch Ministry of Finance, The Hague ADMJ Archives of the Dutch Ministry of Justice, The Hague ADNB Archives of De Nederlandsche Bank, Amsterdam ANMD Archives of the Norwegian Ministry of Defence, Oslo ARAB Labour Movement Archives, Stockholm ARAB/TEA Tage Erlander Archives, Stockholm CAA City Archives Amsterdam, Amsterdam COC Archives of the Chamber of Commerce, Amsterdam DDEL Dwight D. Eisenhower Library, Abilene, Kansas DEA Department of External Affairs, Ottawa DNA Dutch National Archives, The Hague FDRL Franklin D. Roosevelt Library, Hyde Park, NY HSTL Harry S. Truman Library, Independence, Missouri IFZG Institut fur Zeitgeschichte, Miinchen (Institute for Modern History) MAE Ministere des Affaires Etrangeres, Brussels (Belgian Ministry of Foreign Affairs) NA National Archives, Washington DC NMFA Netherlands Ministry of Foreign Affairs, The Hague NAC National Archives of Canada, Ottawa PRO Public Record Office, London RIOD Rijksinstituut voor Oorlogsdocumentatie, Amsterdam (State Institute for War Documentation) RLS Royal Library Stockholm SMFA Swedish Ministry of Foreign Affairs, Stockholm SNA Swedish National Archives, Stockholm SNA/BFA Bank och Fondinspektionens Arkiv, Stockholm (Bank and Stockexchange Board) SNA/FKB Flykt Kapital Byran, Stockholm (Foreign Funds Control) SNBA Swedish National Bank Archives, Stockholm UPA Unden Private Archives, Stockholm WNRC Washington National Records Center, Suitland, Maryland vi freedom of information act requests (foia) FCIA FOIA Central Intelligence Agency, Langley, Virginia FDOC FOIA Department of Commerce, Washington DC FDOD FOIA Department of Defence, Washington DC FDOS FOIA Department of State, Washington DC FDOT FOIA Department of the Treasury, Washington DC FFBI FOIA Federal Bureau of Investigation, Washington DC FINS FOIA Immigration and Naturalization Service, Washington Vll Introduction This study deals with the behaviour of large Swedish banks, corporations and in­ fluential businessmen who rendered assistance to companies and banks in Germany before and during World War II. It is also an analysis which in particu­ lar deals with one of the most powerful Swedish families, the Wallenberg family and their Stockholms Enskilda Bank, nowadays called the Skandinaviska Enskilda Banken. This family, and especially the brothers Jacob and Marcus, were the most prominent representatives of the Swedish business community and are still looked upon very favourably by many in Scandinavia. And specifically services which they rendered to Sweden during the period 1939-1945 were and are still highly appreciated. For instance, an important former Swedish diplomat once stated: "That the Wallenberg brothers sacrificed a large part of their time and energy in order to operate to the benefit of their country, can be traced back to their responsi­ bility and understanding that they could be of real significance to Sweden if they would use to the full extent their large and long-time experience and, not least, would also fully utilize their many longtime contacts abroad in the service of their country."1 However, there is also the unrevealed side regarding the war-time activities of the Wallenberg brothers and their bank. It is the story of how important captains of Swedish finance and their financial institutions acted on behalf of, and closely cooperated with their counterparts in Nazi-Germany. Or as expressed in an American document: "The method whereby the SEB (Enskilda) has succeeded in remaining in the good graces of leaders of both Allied and Axis nations throughout five years of war is in­ teresting, if not unique."2 We will therefore concentrate mainly on their help in the hiding of Nazi interests in the Allied countries, which also can be described as the "cloaking" or the "art" of hiding proper ownership from the authorities. In other words, subsidiaries of important German corporations were "transformed" into neutral Swedish firms. Nominally, the ownership was no longer German but Swedish. An outstanding example was the case of the electronic giant, German Bosch, in Stuttgart which was an important cog in the German war-industry. We also examine the manner in which the Nazi's, with the help of neutral banks, disposed of assets, diamonds, gold, jewels and other belongings which had been looted in occupied countries or were taken away from Jewish and other 1 Introduction deportees. We will show that neutral banks, among them Enskilda, played an im­ portant role in helping Germany to dispose of this booty. We will also reveal the astounding role of Svenska Kullager Fabriken (SKF). During the war this giant Swedish ball-bearing company pursued a rather peculiar policy with respect to the sale of ball bearings in the United States. Finally, we will focus our attention on the ultimate outcome of all these trans­ actions, with what happened when they were discovered by the Allies, in parti­ cular by the American and British authorities. An outcome which in the end resulted in the vesting of the holdings of Enskilda in the United States by the Alien Property Custodian. Both Wallenberg brothers were placed on the "blacklist of blocked nationals" and could no longer operate in the United States. We will show that in the end they were able to arrange for the release of all their and Enskilda's holdings. We will reveal that the circumstances surrounding this release were rather strange and explain the probable conditions under which both brothers were pardoned by American officials. We want to emphasize that the case of Wallenberg and that of Sweden serve only as an example. Cloaking operations were cetainly not restricted to Sweden but were carried out in all neutral countries. We could just as well have taken Switzerland which played an even more striking role than Sweden. Why the Wallenberg case was selected is explained below. We became interested in the Wallenberg family and Enskilda more than 10 years ago. On 20 February 1979 we read an article in the Swedish newspaper Dagens Nyheter, written by Professor Dr Gunnar Adler-Karlsson. Its title: "Sweden, neutrality and the Soviet embargo. Did the USA remove Jacob Wallenberg?" In his article Dr Adler-Karlsson asserted that the American authorities com­ pelled Jacob to leave the board of Enskilda as a result of its wartime economic cooperation with the Nazi's. He also maintained that Washington forced both brothers and Enskilda to collaborate in their embargo policy towards the Soviets. This cooperation consisted of the sabotage by the Wallenbergs and their affilia­ ted companies of a Swedish credit of 1 billion crowns. The loan was extended by the government in Stockholm to the Soviet Union in 1946. The sabotage and Enskilda's cooperation in the looming cold war was of course an act contrary to the official Swedish neutrality policy. Due to insufficient evidence, Adler-Karlsson remained rather vague about the nature of these economic wartime transactions. He was not able to locate any documents with respect to this case and had to work with the statements of leading Swedish diplomats, politicians and business­ men, all of whom wished to remain anonymous. Because we were working on the topics of postwar Swedish foreign policy and the formation of post-war European military alliances, the binding element with the Wallenberg-Enskilda affair was the Cold War. We decided in 1979 to start our research into this affair as a by-product of our main research topics. What also stimulated us was the fact that we were interested in the economic aspects of 2 Introduction World War II, a war which was also a major conflict about the partition of the economic and financial interests and markets of the world. For several years it has been known that large American corporations coope­ rated intimately before and during the war with important German industrial conglomerations in the division of worldmarkets and the distribution of essen­ tial raw materials. Researchers such as Kolko, Bower, Reiman, Borkrn, Martin and others produced several interesting publications on this subject. In Scandinavia extensive research was carried out into the export of ball bearings and other merchandise vital to Nazi-Germany, which was published in several excellent art­ icles and books. However, we quickly discovered that Adler-Karlsson was right in his assertion that the whole affair was very complicated. One day we even started to compare our research work with putting together a gigantic "jigsawpuzzle", consisting of more than 1000 little pieces of almost the same colour. We travelled to more than 25 major archives in 7 countries in order to find these small pieces. Generally speaking we consider the "war-puzzle-part" as finished, although we have to admit that the "postwar-puzzle-part" is still not yet fully complete.

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