Posts Tagged ‘German academia’

The Thyssen Art of Tax Avoidance . . . and Philanthropic Feudalism

During our research for ‘The Thyssen Art Macabre’, we became witnesses to the art of what is now being called ‘aggressive’ tax avoidance, as a result of our participation in a lengthy masterclass with one of the world’s leading exponents. It was Heini Thyssen himself who admitted to us that his primary mission in life had not been the collecting of art or the maintenance of an industrial fortune, but the avoidance of paying tax. Indeed on page 319 of our book we quoted his astonishingly frank statement word for word: ‘I am a tax evader by profession. If you wanted to be correct, I should be in jail’.

The most intensive part of this masterclass came when Heini chose to take his son Heini Junior (Georg Thyssen) to court, in order to break up a Bermudan trust and regain control of the family fortune. This was not only a structure that had been designed to make such disassembly as difficult as possible and thus protect the fortune from alimony claims, irresponsible siblings and, in Heini’s case, his own extravagance, but it was also meant to minimise its exposure to tax liabilities.

I was astonished that, considering the financial importance of this process to the Thyssen-Bornemiszas, the cost of which, one way or another, they would all be contributing to, not one member of the family displayed any interest in visiting the island, to see if their legal and financial representatives were handling the task with due diligence; a process that would eventually result in a legal bill of some $150,000,000. So I offered to go on their behalf, in the knowledge that the very rich rarely do anything for themselves, even collect art; preferring to have others do things on their behalf.

It was in Bermuda that Caroline and I got to know Heini’s barristers, Queen’s Counsellors Michael Crystal and Robert Ham and their local solicitors, Appleby Spurling & Kempe; experts in tax efficient, financial logistics – and in whose gardens we would complete each day’s activities with refreshing bottles of chilled champagne. Then, more recently, I was reminded once again of their existence when a vast cache of their highly privileged clients’ records were mysteriously leaked to the International Consortium of Investigative Journalists from the offices of what had now been rebranded as simply Appleby. This resulted in a spectacular media exposure which has come to be known as the ‘Paradise Papers’.

Around the same time that this financial pasta was beginning to slide off the edge of the plate, the less financially privileged were starting to realise just how iniquitous the super rich really can be. There is increasingly a perceived imbalance reminiscent of feudal conditions, which seem to be favoured not least by those whose marriage has led them to co-opt scions of defunct aristocratic dynasties. The highly paid advisors, meanwhile, had started putting strategies into place in order to meet the PR-challenges of the forced increase in transparency now being applied to offshore financial instruments and their wealthy users.

With this backdrop, Heini Thyssen’s daughter, ’The Archduchess’ Francesca von Habsburg, whose name featured prominently in the ‘Paradise Papers’, wasted no time in announcing to the world her own seemingly admirable ‘mission statement’. This was to use part of her estimated $350,000,000 personal fortune, – inherited from her father, some of which was provided by the Spanish tax payers, when he sold them half his art collection – to save the world’s oceans from pollution.

She also began referring to herself as an ‘executive producer’ and ‘agent of change’.

Soon her London-based organisation TBA21-Academy was said to be ‘curating a top level conference at the Bonn Art Museum’ (a publicly funded organisation!) at the 23rd session of the Conference of the Parties (COP23) to the United Nations Convention on Climate Change (UNFCCC). But in truth this was but a one-day coming together of some of the privileged recipients of her ‘altruism’.

In order to assist her in such an intellectually complex activity, she had recruited the services of a major Broadway-based public relations organisation called Resnicow and Associates, which specialises in ‘online strategy’, ‘core missions’ and ‘sponsorship“; though considering her exceptional wealth one would not have thought that Francesca Habsburg-Thyssen needed the latter. But I know from my own experience that she has invariably asked others to contribute financially to her various socio-cultural activities over the years. And this has also included those in control of public funds.

Meanwhile, I noticed that she still had her British Virgin Islands-based Fragonard art sub-trust in place, into which her inherited Thyssen-Bornemisza art collection share had been placed in 1993 and which was said to have engendered a presumably Cayman Islands-based trust with the assistance of Appleby Trust Cayman Limited in 2008. Then there is the Alligator Head Foundation Jamaica. She also continues to enjoy the amenities of Thyssen Bornemisza Group (TBG) AG Zurich, TBG Holdings Limited Bermuda, Favorita Investment Limited Malta and other such tax-efficient facilities.

The apple seemed not to have fallen far from the tree and her father’s influence possibly continued to affect Francesca Thyssen’s exposure – or not, as the case may be – to tax in Austria, Switzerland, the Czech Republic, the United Kingdom, Jamaica or anywhere else she may see fit to lay her head.

And it looks as if even a supra-national entity such as the United Nations may be ‘endorsing’ her enterprise in philanthropic feudalism, which would be viewed with a distinct lack of sympathy by polemicists, such as myself and my collaborator. Indeed the latter told me: ‘Aggressively avoiding the payment of tax can hardly be considered helpful to governmental agencies who are responsible for the protection of the environment. Using tax payers’ money to fund one’s own, indulgent self-promotion is even less so’.

But presumably Resnicow is intending to garner sufficient public enthusiasm for Francesca Habsburg’s cultural endeavours in the months ahead to successfully persuade those who care, that should she indeed be aggressively minimising her exposure to the payment of tax, she will nevertheless be perceived as a true philanthropist, acting only in the public’s cultural and environmental interests.

And Resnicow will surely be able to help with disaster management advice, if German academia and the media is ever obliged to accept the truth of our account of where Francesca Thyssen’s fortune comes from. Or if she is held accountable for fulfilling her promise of assisting in locating the graves of one hundred and eighty Jewish slave labourers put to death by the SS ‘guests’ of her Aunt Margit Batthyany-Thyssen in the grounds of the family’s Rechnitz castle in 1945.

Meanwhile, one should perhaps be reminded that the last time there was a Thyssen financial interest on Broadway was during the Second World War, when it was the location of the Thyssen family’s Union Banking Corporation in which they and, so it was rumoured, a number of prominent Nazi party members kept a few million emergency dollars, and Prescott Bush, grandfather of George W Bush, was a director!

 

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Book Review: Thyssen in the 20th century – Volume 1: „The United Steelworks under National Socialism, Concern Politics between Market Economy and State Economy“, by Alexander Donges, published by Schöningh Verlag, Germany, 2014.

This book begins with the author expressing his „astonishment“ at the fact that the entrepreneurial, Nazi period history of the United Steelworks (Vereinigte Stahlwerke, VSt) – a conglomerate which included Thyssen works – has not so far been properly researched by academia. Obviously, the independent scholarly information contained in our book has not been considered worthy of acknowledgment, regardless of the fact that it was as a direct result of its publication that Dr Donges and his fellow academic authors have been commissioned and funded to rewrite the Thyssens’ history.

Not until half way through the 400-page tome does he finally acknowledge that VSt was massively involved in armaments manufacture, but that, instead of perceiving this adequately, academia until now has rather viewed VSt as a mere raw iron and raw steel producer – in stark contrast to the Krupp-concern.

While it is difficult to know how to react to such obviously manipulated claims, this reviewer wonders whether it might ever occur to Dr Donges that the dimensions of previous mis-representations are such that it takes minimal intelligence to conclude that they must have been the result of intent rather than accident.

Considering that by the onset of Hitler’s dictatorship, the Thyssens, together with the German state, controlled 72,5% of VSt, and VSt’s output was three times the size of that of its biggest competitor, it was always illogical that Alfried Krupp was sentenced to prison at the Nuremberg Trials while the Thyssens got off scot-free. But for many and various reasons, explained at length in our book, they did, and there the myth of their quasi-heroic immaculacy began to be established.

It is apparent that German academia and the German media were prepared to follow this myth instead of, as we did, questioning it. In their defense they might argue that they were not able to view certain archives and that this has hampered their research. But while the Thyssen-Bornemiszas’ files have indeed been unavailable to academia until recently, for the past 53 years of their existence the ThyssenKrupp archives – officially at least (the truth is another matter) – have not been subject to such restrictions.

When at some point around 2006/7 Georg Thyssen-Bornemisza created the Thyssen Industrial History Foundation and placed in it his father’s archives (which we had previously viewed in private, first in Madrid and later in Monte Carlo), he effectively placed them under the questionable curatorship of Prof. Manfred Rasch, head archivist of ThyssenKrupp AG, and even, it seems, in the same building as the ThyssenKrupp archives in Duisburg.

This move did the extraordinary thing of symbolically uniting the files of Fritz Thyssen’s side with those of Heinrich Thyssen-Bornemisza’s side of the family; a momentous act, since it was a crucial element of the Thyssen historical myth that the two sides always pretended to have nothing to do with one another, a myth that the first three books in this series are nonetheless still trying to propagate.

Upon closer inspection of the contents lists, however, curious internal restructurings of files appear to be going on in these two archives. There are important files, which we know used to be in the archives of ThyssenKrupp, such as, surprisingly, the estate of Wilhelm Roelen (main war-time manager of Heinrich Thyssen-Bornemisza) or, unsurprisingly, the estate of Robert Ellscheid (main lawyer of Fritz and Amélie Thyssen), and which are now said to be in the new Thyssen Industrial History Foundation archives.

But what is most noticeable from the footnotes is that time and time again, when reference is made to armaments in particular, the files in question tend to allegedly have been sourced in the archives of the newly created Thyssen Industrial History Foundation, rather than the archives of ThyssenKrupp AG, giving the impression of a possible damage limitation aspect in respect of this already ailing giant of German heavy industry.

In any case, one of the few major admissions made in this book is that Fritz Thyssen’s flight from Germany to Switzerland at the onset of World War Two might have had less to do with heroic opposition to Adolf Hitler and more with the fact that he had contravened foreign exchange regulations and committed tax evasion on a massive scale, as we first revealed (though they say nothing of the other reasons for his flight, including Hitler’s humiliating accusations of self-interest).

While presenting the actual figures of Fritz Thyssen’s misdemeanours, namely 31 million Reichsmark in evaded tax plus 17 million Reichsmark Reich Flight Tax, equalling a total of 48 million RM payable to the German State, Dr Donges quickly attenuates the claim by explaining that the denazification board of 1948 did not come to the conclusion that this had played a role in Fritz Thyssen’s flight. But what he fails to mention – although another author in the same series of books does – is how any genuine Aufarbeitung by these courts stalled once the Cold War began.

It is also noticeable that the author alleges the critical tax investigation into Fritz Thyssen’s affairs to have begun in the late 1920s, when in actual fact it had started almost immediately after the end of World War One.

The book manages to reveal that the retiring Joseph Thyssen branch of the dynasty (deriving from the brother of old August Thyssen) indirectly profited from the persecution of the Jews, as the Reich paid out their 54 million RM shares in VSt after Fritz Thyssen’s flight and the confiscation of his assets, by handing them shares previously owned by Jews and taken from them as part of the Jewish Assets Levy (Judenvermögensabgabe).

But it was Fritz Thyssen, whose anti-semitism was most overt, as he was prominently involved in forcing the Jewish members Paul Silverberg, Jakob Goldschmidt, Kurt Martin Hirschland, Henry Nathan, Georg Solmssen and Ottmar E Strauss to vacate their seats on the supervisory board of VSt in 1933/4. And no matter how often in this series they will try to tell us that Fritz Thyssen “gradually denazified himself” starting in 1934 and that his anti-Semitism was not of the vicious, murderous kind, we need to remember that forcing Jews out of their jobs was the first step in their disenfranchisement and on the road to the Holocaust.

When the Simon Hirschland Bank in Essen was „aryanised“ in 1938 by a banking consortium including Deutsche Bank and Essener National-Bank AG, Fritz Thyssen bought a share of 0.5 million RM, yet his role is said to be „unclear“ and „explained unsatisfactorily by reseachers“, which is the academics’ way of sowing doubt over established facts, especially when these are detrimental to the Thyssens’ image, and especially when they have been funded by Thyssen institutions to rewrite their history.

Of course generally the all important finance and banking side of things remains as much in the dark as it was at the time in question. Dr Donges mentions anonymous holdings in Holland, Switzerland and the USA; the Reich’s camouflaging of armaments financing through Metallurgische Forschungsanstalt; and Faminta AG of Glarus, Switzerland, which he alleges to have been a foreign vessel for Thyssen & Co. rather than for Fritz Thyssen personally. He leaves US bond creditors unnamed and states that „the role of the Finance Ministry within the Third Reich has not been sufficiently studied yet“.

And while on page 28 Dr Donges admits, albeit in the most superficial of ways, that after the death of the patriarch August Thyssen in 1926, Fritz Thyssen had to relinquish “part of the VSt shares” to his brother Heinrich, he does not tell us how long this stock [not just a few shares, but an initial 55 million RM, no less, and for which Fritz received shares in the family’s Dutch bank Bank voor Handel en Scheepvaart in Rotterdam in return, which was controlled by Heinrich] might have remained under Heinrich Thyssen-Bornemisza’s ownership and whether any of it was still in his possession at the time of the confiscation of Fritz’s fortune in 1939/40 (and if so, what happened to it after this date).

Instead the author concentrates on looking at the „use of political, legal and social options to further economic success….during the Nazi period“. He concludes that „entrepreneurial advantages were to be gained from the development of the armaments enterprises“ and that „although the freedom of action was hampered through many restrictions compared to the time of the Weimar Republic, the leadership of VSt could still pursue a long-term investment strategy.“

Thus this work ends with the earth-shattering conclusion that „if one looks at the development lines of the German steel industry in the 20th century, the long-term trend was that the steel manufacturers moved towards further processing. So VSt in the 1930s would probably have chosen that way even under another political regime“.

So presumably that was the main purpose of this book; to save the image of ThyssenKrupp AG and the conscience of surviving members of the Thyssen family, who have profited, and continue to do so, from the part Vereinigte Stahlwerke AG played in the death of 80 million people as a result of World War Two.

It is very difficult to see how Dr Donges’s doctoral thesis could possibly “close the gap” in research on the subject of the history of the United Steelworks during the Nazi period, as has been the claim made at the outset of this series “Family – Enterprise – Public. Thyssen in the 20th century”.

But whether anyone outside his immediate circle of overtly Thyssen-financed researchers will now wake up from their “great unquestioning slumber” and decide to pursue a more forthcoming research on the subject remains to be seen. Academic book reviews so far (by Tobias Birken at Sehepunkte and by Tim Schanetzky at H-Soz-Kult) suggest that they will not. In any case, how dissident academics would be received when knocking on the doors of “Professor Rasch’s archives”, remains an altogether different question.

Political economist (Dr.) Alexander Donges, gaining his title by being a Thyssen academic mercenary at Mannheim University

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