IBM: Haunted by Nazi-Era Activities?

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Author Edwin Black holds a copy of a Nazi-era IBM contract

Edwin Black has thrown the book at IBM.

The American researcher's controversial new volume, "IBM and the Holocaust: The Strategic Alliance Between Nazi Germany and America's Most Powerful Corporation," raises startling questions about the technology giant's involvement with Nazi government officials — and throws the company's wartime ethics into serious doubt.

And now IBM's troubles are expanding into the legal sphere: Saturday, five Holocaust survivors filed a class action suit against the company, demanding that IBM open its archives and pay for any "ill-gotten gains... from its conduct during World War II." Lawyers for the plaintiffs estimate those gains to be about $10 million in 1940 dollars, or roughly $120 million today.

IBM, according to Black's book and the lawsuit, was responsible for punch card technology used by Nazi demographers in the years leading up to World War II — and eventually by the SS, which was charged with rounding up Europe's Jews. Although it has long been known that IBM's German arm, which was taken over by the Nazis, had cooperated with the regime — and, indeed, was in a consortium of companies making payments to survivors and victims' families — Black says that the American parent was fully aware of the use to which the technology was put. And after the Germans surrendered, Black says, IBM's U.S. office was quick to collect profits made during the war by the subsidiary, called Dehomag.

A custom-designed database?

The punch cards and counting machines, says Black, were provided to Hitler's government as early as 1933, and were probably used in the Nazis' first official census that year. The technology came in handy again in 1939 when the government conducted another census, this time with the explicit goal of identifying and locating German Jews — and finally, Black alleges, in tracking records at Nazi concentration camps.

It's this specificity of purpose, says William Seltzer, an expert in demographic statistics at Fordham University, that provides the most damning evidence. "Microsoft is not responsible for every spreadsheet made with Excel," Seltzer told "But if someone is doing custom designing of a database, they have to know what's going on. With these punch cards, Dehomag had to design a card for every piece of new information that the government wanted."

The charges against IBM are hardly unique. Many U.S.-based multinationals, including Ford Motor Company, Coca-Cola and Colgate-Palmolive, have weathered charges of aiding and/or operating for profits under the Nazi regime. A few years ago, when a lawsuit was brought against Ford, the company fought (and won) for a dismissal, but not before it acknowledged that its German subsidiary used labor from the Buchenwald concentration camp to build vehicles. Ford's U.S. offices maintain they were not responsible for what went on after its assets were seized in 1941 — a claim many companies, including IBM, make in the face of such accusations.

In Seltzer's mind, IBM's claims that they "lost control" of the German affiliate during the war don't ring true at all. "IBM says they lost control during the war, but that depends on what you mean by 'war,'" he says. "Certainly after Germany invaded Poland in 1939, they were still very much in control, and even coordinated transfer of equipment from occupied Poland to Romania. Then, after the U.S. and Germany entered a state of war in 1941, IBM arranged to have conservators run the German subsidiary — with the understanding that the profits would be turned over to IBM. So IBM had control in spirit but not in law."

IBM says it's nothing new

Seltzer believes, as does Black, that the Germans could not have operated IBM's machines without the company's help; the technology was just too new.

Of course, not everyone agrees with Seltzer's assessment — least of all IBM. Last week, the company released a statement: "If this book points to new and verifiable information that advances understanding of this tragic era, IBM will examine it and ask that appropriate scholars do the same." But company spokespeople insist that Black's allegations are not new, that historians have long been aware that the Nazis used IBM's tabulating machines. And, spokespeople insist, the company is paying for its mistakes: IBM Germany, formerly Dehomag, has already paid into Germany's government-sponsored initiative to compensate citizens forced to work for the Nazis.

Ironically, the lawsuit filed last week against IBM could mean yet another delay for those seeking reparations; German firms participating in the compensation effort have demanded protection against future claims on behalf of victims of the Nazis, and IBM's apparent vulnerability may invigorate those demands.

In the meantime, says Seltzer, there are two lessons to be learned from Black's book, both of which apply just as easily to today's business climate as to that of 50 years ago. "One, we have to recognize that technology is morally neutral, but how we use it is not. Two, professional zeal and bureaucratic opportunism can easily blind people. IBM wasn't interested in ideology or patriotism; when they developed those punch cards, the company had something they were very proud of. And so they closed their eyes and jumped in. They pretended not to see anything but the business opportunities ahead of them."