Descent into corporate darkness.

Hell's Cartel: IG Farben and the Making of Hitler's War Machine

By Diarmuid Jeffreys

Metropolitan Books

2008, $32, pp. 496

[ILLUSTRATION OMITTED]

One of the distinguishing characteristics and advantages of a corporation is the separation of ownership from management. As a result, owners are not liable for the organization's misbehavior, and managers can generally escape unscathed. Lawyers like to say that corporations have "neither a soul to damn nor a body to kick."

In pursuit of profit, companies are expected to bite and scratch a bit. That's the free market. What they're not supposed to do, among other things, is kill people. In Hell's Cartel: IG Farben and the Making of Hitler's War Machine, Diarmuid Jeffreys brilliantly explains, step by painful step, how one seemingly ordinary company came to do just that. It's a harrowing tale, with a frightening subtext: the inherently amoral nature of the corporation.

In the spring of 1941, the chemical cartel known as IG Farben decided to build a huge plant in occupied Poland to produce synthetic rubber and fuel, both of which were desperately needed by the Nazi military. The chief roadblock was a shortage of workers. IG solved that problem by paying the SS for the labor of prisoners in the nearby Auschwitz concentration camp--four reichmarks a day for skilled workers, three for unskilled. The SS provided kapos, prisoner guards, to keep inmates in line. Company executives assured each other that kapos would be cherry-picked for their ruthless efficiency.

This is how one prisoner described the work site: "Men ran and fell, were kicked and shot. Wild-eyed kapos drove their bloodstained path through rucks of prisoners, while SS men shot from the hip, like television cowboys ... adding a ghastly note of incongruity to the bedlam were groups of quiet men in impeccable civilian clothes, picking their way through corpses they did not want to see, measuring timbers with bright yellow folding rules, making neat little notes in black leather books, oblivious to the bloodbath."

These were the IG men, dutiful employees just doing their job. Occasionally they would complain to SS officers about the slow pace of the work, inspiring yet more kickings and beatings. Part of the problem, company managers determined, was that the prisoners had to walk four miles from the Auschwitz camp to the construction site and were already exhausted by the time they arrived. Eventually, an ingenious solution was found: The company established its own concentration camp close to the site.

Meals at the IG camp consisted of a small quantity of bread and margarine in the morning and watery soup for lunch and supper. Most inmates were able to work no more than three months on that near-starvation diet; they were then "selected" for extermination. In 1943 alone, more than 25,000 IG slaves met that fate.

Did I mention that the company's scientists used Auschwitz inmates as guinea pigs for testing new drugs? In one such transaction, IG paid the SS 170 reichmarks apiece for 150 women, and later reported: "The experiments were performed. All test persons died." IG also provided steady financial support for Dr. Josef Mengele's grotesque, vicious studies.

How could an enterprise the size and importance of an IG Farben--the fourth largest company in the world, source of dozens of breakthrough chemical products and not a few Nobel Prizes, business partner of leading U.S. and European corporations--stoop so low? The first big step down that path, Jeffreys suggests, came in 1914, before there was an IG Farben.

Fearful of losing World War I because of a shortage of strategic raw materials, the German government turned to Walter von Rathenau, a Jewish businessman, for a solution. He turned to Fritz Haber, a brilliant Jewish scientist, who had invented a process to synthesize ammonia, a key step toward making nitrates available for use in fertilizers and explosives.

With the help of the BASF chemical company, Haber produced a new weapon to use against the French: poison gas. It was a violation of the Hague Convention, of course, but the only person who seemed truly upset about that was Haber's wife. She pleaded with him not to develop the stuff, and after he unleashed it on the Western Front, with a huge loss of life, she committed suicide. The poison gas episode, the author points out, "brought the chemical industry right to the heart of Germany's war effort."

After the armistice, the exhausted German economy went into a tailspin. The leading chemical companies were struggling, and foreign rivals began to threaten their supremacy. In 1925, the companies decided to transform what had been a loose confederation into a single giant chemical cartel. They called it IG Farbenindustrie Aktiengesellschaft--IG Farben, or IG, for short.

IG's first operating manager was Carl Bosch. He had earned his spurs by using a process called hydrogenation to mass-produce synthetic ammonia. Germany's early monopoly on the process helped rebuild the chemical industry in the early 1920s, but overseas competitors were muscling in. Bosch looked about for some other use for IG's massive hydrogenation factories. He found it in the manufacture of synthetic oil from coal. The problem was that the ersatz oil was far more costly than the natural stuff.

Enter Adolf Hitler. He and Bosch didn't hit it off at first: Hitler's minions constantly attacked IG because several of its leading executives were Jewish. Then Hitler became chancellor and called for new elections. If he won, he said, he would create a climate of stability in which businesses could flourish; if he lost, he would launch all-out civil war. Faced with that threat, the major industries acceded to the Nazis' demand for campaign funds, and IG Farben's contribution was the biggest of all.

Meanwhile, Bosch had concluded that his synthetic fuel program was not economically viable without a government subsidy. As it happened, a triumphant Hitler, who was laying plans for the conquest of Europe, was determined to make Germany self-sufficient in strategic raw materials, including oil and rubber. He was delighted to help underwrite Bosch's synthetic oil and rubber operations. Of course, part of this "Faustian bargain," as the author calls it, was IG's acceptance of the whole Nazi program. In short order, Hell's Cartel was Juden-frei, its foreign branches spread Nazi propaganda, and it arranged to use slave labor.

On August 27, 1947, in the Palace of Justice in Nuremberg, General Telford Taylor, the chief prosecutor, opened the trial of 23 wartime executives of IG Farben. He accused them of "major responsibility for visiting on mankind the most searing and catastrophic war in modern history" and of "wholesale enslavement, plunder, and murder." The defendants insisted that they had been doing nothing more than any patriotic businessmen would have done.

Eleven months later, the four American judges delivered their verdict. In essence, they rejected much of the prosecution's evidence. They acquitted 10 executives. The others were given sentences from 18 months to 8 years. Within 4 years, all 23 defendants were free, and most went on to hold top positions in postwar German industry. They never publicly apologized for their role in the war and the Holocaust.

In 1951, most of IG Farben's assets were split among three of its biggest original founders--Bayer, Hoechst, and BASF--and six smaller companies. Today, Bayer is among the world's 10 largest pharmaceutical and chemical companies; Hoechst is part of Sanofi-Aventis, the world's third-largest pharmaceutical company; and BASF is simply the world's largest chemical company. The few remaining IG assets went into a trust, which in due time was sued by survivors of the IG camp. They won some judgments, too, though the largest individual payout was a pittance of $1,250.

In his prologue, Jeffreys says that the tale of IG Farben "contains a clear warning about the risks inherent in any close relationship between business and state and what can go wrong when political objectives and the pursuit of profit become dangerously entwined." But we have seen in recent years how the pursuit of profit, all by itself, can lead corporations to mislead and cheat their customers, promote goods they know to be dangerous, and test potentially injurious products on unsuspecting children. There were no states or political objectives involved.

As companies grow ever larger and more powerful in order to compete in a global economy, one question takes on ever-greater importance: How much longer are we going to simply shrug and accept the evil that some corporations do? The example of IG Farben, presented with such great skill in this book, should inspire us to start finding ways to control these potential monsters.

Robert W. Stock, a former New York Times travel editor, is a freelance writer and editor in New York City.