It's been a tough road to hoe for Deutsche Bank these past few years. This paradigm of German high finance has been through the regulatory wringer, forced to suffer the wrath of the SEC and Department of Justice over a number of sticky/questionable financial deals. They shelled out some $55 million to settle a case brought by the SEC in a derivatives inquiry; hunkered down as allegations flew like shells from a German 88 accusing the bank of hiding 12 billion in losses and paid out a whopping $2.5 billion to settle charges of Libor rate-rigging . Current inquiries, reportedly, are targeting the bank's use of so-called "dark pool" trading and possible money laundering in Russia.
Cries of "Ach du lieber Himmel" must resonate through the halls at head office in Frankfurt with each new revelation.
While other mega-banks have suffered the slings and arrows of regulatory retaliation there's something unique about Deutsche's problems and for me it's personal. I was born in Lubeck in Deutschland's north a few years after the war. Both my late parents spent time in Camp Auschwitz (much of my family was exterminated) so when I hear anything with the prefix "Deutsche" I get all jittery. Brain flashes of storm troopers marching to the marital strains of Deutschland über alles suddenly appear and it's not a pretty picture (I grew up hearing about all this stuff from those who were there, on the receiving end).
Not too long ago I stumbled upon two New York Times articles, dated August 1, 1998 and Feb. 5th, 1999, which surfaced the fact that Deutsche Bank had profited by Hitler's murderous adventurism. As Stuka dive bombers rained terror down on Polish cities and the full weight of the Nazi blitzkrieg was crushing any resistance the German banking community was plotting and planning how to take advantage of any newly acquired spoils of war. Jews in the occupied areas of Poland were closing out accounts and fleeing with assets so it became a race against time to move in and stake a claim. This was a gold rush, literally, and Deutsche wasn't the only one taking part. Arch-competitor Dresdner also had financial malice on their corporate mind and for both banks this included trading in gold bullion re-cast from wedding rings, tooth fillings and other property seized from Jews destined for death camp gas chambers.
This grim but fascinating bit of Holocaust history remains largely unknown to the general public and even among Holocaust historians there seems to be a distinct lack of knowledge (two Holocaust specialists I queried didn't know much of the story). It was up to a team of historians -- ironically, brought together by Deutsche Bank -- to begin the process of rock-kicking. One of the investigators, Princeton University Professor, Harold James, did some commanding research in the mid-1990s and later compiled his findings in a 2004 book, The Nazi Dictatorship and the Deutsche Bank. It's a fascinating read and one that demonstrates that the devil is in the details and given the Nazi penchant for record-keeping the details of banking transactions were preserved with Teutonic passion.
While written in somewhat of a dry academic style, The Nazi Dictatorship and the Deutsche Bank, highlights some stories that are downright tragicomic. For instance when Deutsche and Dresdner decided to open up major branch offices in the newly occupied Polish town of Lodz competition grew so keen and cutthroat that Deutsche's bankers complained to the Reich Economics Ministry that Dresdner was seducing local industrialists -- some presumably Deutsche customers -- by hosting a "beer party with food" at the local Grand Hotel.
BTW: The Lodz reference struck a resonant chord given my late father -- a teenager in Lodz -- was confined to the notorious ghetto established by the Nazis. My grandfather, who owned a small construction company, died in the ghetto and his assets, I imagine, were spirited away by German bankers. Once the ghetto was liquidated in 1943 my father was spirited off to Auschwitz.
The most damning revelations that emerge from the historical record regard the complicity of Deutsche's Katowice branch in helping to grease the gears of Hitler's killing machinery. When the Waffen SS, charged with running the death camp at Auschwitz needed to build barracks, Deutsche Bank was the go-to financier. When the IG Farben chemical works -- manufacturer of the mass-killing poison Zyklon B -- needed to expand its facilities at Auschwitz, Deutsche Bank was there to extend credit.
A spokesperson for Deutsche Bank didn't shy away from this dark legacy; in fact, she responded to queries by sending numerous links regarding research carried out including that of Professor James but wanted to highlight the bank's involvement in the creation of a foundation: "Remembrance, Responsibility and the Future," which has provided compensation for those that suffered under their watch and funding for on-going research.
World War II and the Third Reich never fails to provide new material for "All Hitler... All the Time" cable networks bent on finding some new wrinkle whether it be Nazis and the Occult or Hitler's collusion with space aliens. It's all sexy stuff; much more compelling than focusing on the mundane world of the German Bankers enthusiastically supporting the policies of the Third Reich while counting up seized assets from dead Jews. It gives new meaning to what Hannah Arendt termed the "banality of evil."
Professor James thinks further investigation is required to uncover the full story of the Third Reich's economic war against the Jews. He also believes that Deutsche Bank's wartime legacy speaks to us in profoundly relevant ways.
It seems to me that there are powerful lessons for corporate behavior today especially in regards to business relations with politically problematic regimes.
Joel Sucher is a writer/filmmaker with Pacific Street Films. He's written on a variety of subjects for publications that include American Banker, In These Times and Huffington Post. He's also the co-producer of the documentary, From Swastika to Jim Crow, which details the story of Jewish refugee scholars who fled Nazi Germany and ended up teaching at Black Colleges.