Business History

The Devil’s Chemist and the Legacy of Evil

Why did a Nazi chemical conglomerate indicted for forced labor, murder, and genocide stay open until 2011?

In 1925, a group of German industrial giants came together to form a national conglomerate that would grow to dominate German manufacturing.With the rise of Adolf Hitler and his Nazi Party in the 1930s, the conglometate, known as IG Farben, quickly became one of the Third Reich’s favored collaborators, building a rubber factory in Auschwitz that used Jewish slave labor to support the German war effort. The most notable of the company’s contributions to Hitler’s administration was the production of Zyklon B, the pesticide gas used to murder over 1.1 million people in German concentration camps before the end of the war. In the years following the German surrender, IG Farben was broken apart, its pieces used to reconstitute the companies that had formed it twenty years earlier. The giant that made use of slave labor and produced Zyklon B now became BASF, Hoechst AG, the Agfa-Gevaert Group, and Bayer Pharmaceutical. The company officially known as IG Farben would stay open a little longer, not completely closing its doors until 2011, 66 years after the end of World War II.

It started as a set of corporate mergers in the German industrial sector. Chemical giants Hoechst AG and Cassella AG united in 1904, leading rivals BASF and Bayer to follow with their own merger, later also absorbing industrial giant Agfa. The two firms remained separate and maintained a business rivalry until the middle years of World War I, when they joined together with a group of other industrial organizations to form the Interessengemeinschaft der Deutschen Teerfarbenfabriken, or the “Syndicate of German Coal-Tar Dye Manufacturers”.

At the time, Encyclopedia Britannica describes the newly-organized industrial group as “little more than a loose association” of manufacturers. Seven years after the war’s end, in 1925, the syndicate would formally reorganize as a cartel, with holding company BASF officially changing its name to IG Farbenindustrie AG. The resettled organization would establish a new headquarters in Frankfurt and put together a new management team from leaders of the constituent companies.

Eight years later, in 1933, Adolf Hitler rose to power as Chancellor, and later Führer, of Germany. After a series of anti-Jewish legislation and the state-sponsored Kristallnacht riots against Jewish citizens and Jewish-owned businesses in 1939, the Nazi German government formally initiated the Jewish extermination campaign later known as the Holocaust in 1941.

Meanwhile, having opened the European theater of World War II in 1939 with its invasion of Poland, the German Third Reich found itself in need of increased industrial power for the production of war materiel. IG Farben stepped up to the task. Following the beginning of the War, the cartel built a synthetic oil and rubber plant in the occupied Polish city of Oświęcim, better known by its German name, Auschwitz. There, IG Farben would accept the use of thousands of slave laborers from the neighboring German extermination camp. According to the New York Times, the company later built a concentration camp of its own in the name of improved efficiency. Writing for the Christian Science Monitor, sociologist Patricia Clough claims that 25,000 people would die there.

Alongside the oil and rubber produced at the Auschwitz plant, one of IG Farben’s constituent chemical companies would come to fill a government order for the mass production of Zyklon B, the cyanide-based pesticide used to kill over 1.1 million concentration camp prisoners, with most killings occurring next door at Auschwitz.

By the end of the War and the allied liberation of the German concentration camps, the New York Times claims that IG Farben’s factories “exploited more than 35,000 slave laborers, many from Auschwitz”. According to Britannica, the company was also proven to have “conducted drug experiments on live inmates” sourced from the camps.

IG Farben’s contributions to the atrocities committed by the Axis powers of World War II were considered significant enough to warrant a full military tribunal, one of thirteen such tribunals collectively known as the Nuremberg Trials. 

Many of the company’s executives would stand trial for crimes committed during the war. Among them, Fritz ter Meer, the operator in charge of the Auschwitz chemical plant, was convicted of mass murder, slavery, and plundering. His sentence was seven years in prison, five of which he would serve before securing an early release. The longest sentence handed out at the IG Farben Trial, levied against Walter Dürrfeld, the man in charge of the Auschwitz plant and Monowitz concentration camp, was eight years.

Following the 1945 German surrender, the Allied Powers expressed authority over IG Farben and determined that its operations were to be redistributed to its constituent companies. Early plans to split the giant into six or more smaller companies were shelved with the development of the cold war, and Farben was allowed to divide its resources between three industrial organizations: Hoechst, BASF, and Bayer.

Despite the successful transfer of operations to these new companies, IG Farben did not cease to exist. Instead, the organization’s remnant renamed itself “IG Farben in Liquidation” and remained open in order to pay employee pensions, settle legal arguments, and tie up loose ends. To that end, the lasting shell company was recorded to have paid out settlement money to survivors of IG Farben’s slave labor program (5,000 Deutsche Marks, according to historian Peter Heuss, quoted in Deutsche Welle, $26 million in total according to the New York Times). 

But IG Farben’s post-war years were filled with more than dutiful busywork; the company’s shares continued to be traded on the German stock exchange, and executives regularly filed claims against international bodies in possession of assets once linked to the chemical giant. Repeated claims against a Swiss bank left Farben bankrupt and without any cash reserves for employee pension payments. 

After German reunification in 1990, the company attempted to request payment for assets seized by the Soviet Union and East Germany. The German government denied the requests. Indeed, after finalizing its payments to victims of its forced labor program, New York Times writer Edmund Andrews noted that Farben “adamantly refused to recognize further legal responsibility for decades afterward”.

Decades. While the war ended in 1945 and IG Farben was formally divided shortly afterward, operations at the remaining shell company would not end until 2011, more than sixty-six years after Hitler’s suicide and the collapse of the Third Reich. IG Farben’s stock was officially delisted, and the company shut down for good.

BASF SE, one of Farben’s successor companies, is the world’s largest chemical producer. Its current total value, according to Forbes, is $76.6 billion.

Hoechst AG was merged with the French firm Sanofi-Synthélabo in 2004. Today, it’s worth $102 billion. Sanofi products include Allegra, Aspercreme, Cortizone-10, Dulcolax, GoldBond, IcyHot, Xyzal, and Zantac.

Bayer Pharmaceutical named Fritz ter Meer, the IG Farben executive charged with mass murder, slavery, and plundering, chairman of its board of directors in 1956. He held that position until 1964. Today, the company is worth $64.1 billion. Its pharmaceutical brands include Aspirin, Aleve, Alka-Seltzer, Claritin, Levitra, MiraLAX, and Xarelto. 

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Image: German Federal Archives (Bundesarchiv; Public domain)

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