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Please send in any articles note worthy on the subject illegal
property seizures.
Further information, please contact:
Ms. Alexandra Mareschi
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The first seizure by the Soviet Union, 1945-49
Following the defeat of Nazi Germany in World War II the Soviet Union’s occupation forces seized over three million hectares (7,4million acres) of land and some 100,000 factories, businesses and residential buildings in eastern zone of the country. The confiscations were based on Marxist doctrine of seizing means of production and killing, arresting or driving out industrialists, aristocrats, Mittlestand (small and medium sized) business owners and large farm owners. Property was seized regardless of whether it had belonged to Nazis, anti-Nazis or even formerly to Jews.
The Soviet propaganda line was” Junkerland in Bauernhand” (Junker Lands in Peasant Hands) but in reality only 8 per cent of all property seized came from aristocratic Junkers. All farms over 100 hectares were seized and many thousands of smaller farms were taken. Much of this land was, indeed, divided up among peasants and communist party members – but in 1950s and 1960s it was collectivized creating the massive Agricultural Production Cooperatives which still dominate eastern German farming. In just a few years the entire rural society and infrastructure, built up over hundred years, was destroyed. In still little noted acts of cultural vandalism hundreds of castles and manor houses were blown up after the war by communist functionaries as symbols of the old order.
The non-land seizures of factories, business and homes wiped out eastern German professional, entrepreneurial and middle class. As the historian and publisher Wolf Jobst Siedler has noted in his book, ”Farewell to Prussia” eastern Germany has been bled white since the 1930’s. First to go, of course, were the Jews who were murdered by the Nazis in the Holocaust or else fled. From 1945 the Soviet forces seized industry. In following years ever smaller businesses were confiscated and million of people who had been the region’s elite fled the Soviet zone – subsequently East Germany – to the West.
German unification – 1989-90
The Berlin Wall was opened on November 9, 1989 and on October 3, 1990 East and West Germany were unified. In reality East Germany was dissolved on unity day and taken over by a victorious West Germany. Although unification talks were held under the 2+4 formula (East and West Germany plus the four occupation powers: Britain, France the United States and the Soviet Union) real negotiation were between Bonn and Moscow. East Germany’s communists had imploded after the Wall’s opening and East Berlin caretaker government, elected in March 1990, was put in office with a mandate for fast-track unification with West Germany.
The second expropriation by the Federal Republic of Germany, 1990
Property has become hotly disputed aspect of Germany’s unification. German Chancellor Helmut Kohl said repeatedly in 1990 and thereafter that the Soviet Union made non-reversal of the 1945-49 confiscations a precondition for allowing unity to go ahead. Kohl told the German parliament in Bonn on January 30,1991:
“The Soviet Union made the continuation of measures taken between 1945 and 1949a precondition for unification. I firmly state that the unification of Germany could not be allowed to fail over this question”.
This view was backed by all key members of Kohl’s cabinet including the justice minister and subsequently foreign minister, Klaus Kinkel, and Finance Minister Theo Waigel.
Nevertheless, many members of the chamber were deeply unhappy with decision and more than 100 Bundestag deputies formally declared they opposed not giving back property and only voted for the unification treaty so as not to endanger the historic chance to reunite the nation. They did so on Kohl’s word and the two-thirds majority required would not have been achieved without their votes.
But it appears that Kohl lied.
Former Soviet leader Mikhail Gorbachev himself has repeatedly dismissed the idea that he set such terms for unification.
“The issue of restitution of expropriated property was never discussed at the highest levels. It is absurd to impute that I made this demand as a precondition for my approval of reunification,” declared Gorbachev during a visit to Germany in 1998.
What Gorbachev did want was to ensure that all acts carried out during the Soviet administration of eastern Germany were not declared “null and void” says the British historian Norman Stone who interviewed Gorbachev on this issue. Stone published an article in the British magazine The Spectator in 1995 also quoting Gorbachev as denying that non-return of property had been a condition for unification.
Eduard Schevardnadse, the former Soviet Union’s foreign minister, says much the same thing.
“During the negotiations over the unification question this issue was never discussed. Neither in Gorbachev’s staff nor at the foreign ministry … we did not set preconditions with regard to German unity. No. There was no discussion over the process of expropriation and over the non-reversal of this process, said Schevardnadse in a 1994 interview Germany’s Spiegel TV.
Former U.S. President George Bush was asked whether non-return of property had been a precondition for unification at a 1995 conference in the German city of Aachen. Bush answered with a single word: “No”.
The refusal to return property seized from 1945 to 1949 contrasts sharply with the unification treaty’s terms for property seized between 1949 (the year the East German state was created) and the 1989 collapse of the Berlin Wall. These properties are being or have been returned. In addition, eastern German properties seized under the Third Reich from 1933 to 1945 are also being returned mainly to former Jewish owners but in a few cases to aristocrats involved in the failed 1944 plot to kill Adolf Hitler.
As a symbolic gesture the Kohl government agreed to pay minimal compensation to those whose property was seized from 1945 to 1949. This sum will only be paid starting in 2004 a date by which many of the now elderly people who lost property will have died. In any case the amounts of money involved are tiny.
The value of the property is set at its market price from1990. But for a property worth between 100,000 marks and 500,000 marks (45,000 dollars to 227,000 dollars) the claimants will get just 30 per cent of the 1990 value. But most property confiscated at this time would be worth millions today. For any property worth over 3 million marks in 1990 the former owners will receive a mere 5 per cent of the 1990 value.
Crucially, under Kohl’s decision all property seized from 1945 to 1949- which had been East German state property – became property of Federal Republic of Germany as of the 1990 unification. This unprecedented land-grab put about one-third of eastern Germany at the chancellor’s disposal. And the German state has been selling it and keeping the proceeds ever since.
It is beyond the scope of this survey but it should be noted that Kohl has also been caught in a series of public lies regarding the massive finance scandal which has engulfed his Christian Democratic Union since 1999. The CDU has admitted to over 50 million marks in illicit funds. (Actual amounts involved are probably far higher). Money from still unknown sources was stashed in Swiss bank accounts and smuggled into Germany to pay things like election costs.
Kohl initially denied any knowledge of the slush funds but was then force to admit that he personally took 2.1 million marks in cash. Despite efforts of both states prosecutors and a separate parliamentary probe the former German leader refuses to say who gave him the money. This has led to speculations the funds were kickbacks or bribes in connection with a Saudi Arabian arms deal and/or the sale in 1990s of eastern German assets including an oil refinery.
Why did Kohl block return of property?
There appear to have been two main reasons. First and most obvious is that the financially strapped government believed it could sell off the property to pay the massive unification bills and avoid raising taxes. During the 1990s the German state transferred some 150 billion marks (68 billion dollars) annually from the prosperous west to the struggling east.
At the time of unification some estimates put value of the 1945-49 property at over 600 billion marks. This was a radical over-estimate given that most East German factories were later found to be worthless. Nevertheless, last year the German government received 654 million marks from the sale of confiscated property and this year expects to raise over 700 million marks.
The second reason was political. Kohl faced the first all-German general election at the end of 1990 and calls for returning the seized property were –to put it mildly– deeply unpopular in eastern Germany. Although easterners wanted fast benefits from western Germany’s economic strength there were little sense that respect for private property played a big role the West German economic miracle. Much of Germany’s media and Kohl himself portrayed the issue on class lines in that the seizures were dismissed as “the Junker question”. By barring the return of property Kohl picked up much needed support in eastern Germany and few people in the western German social welfare state seemed to object.
Why wasn’t there a stronger protest over the move?
Politically there was an unholy alliance. The conservative parties, which normally should have backed return of property, sanctioned the seizure through their policies. Kohl’s Christian Democrats and their Bavarian sister party, the Christian Social Union, were the main architects of the second confiscation. A notable accessory was the Free Democratic Party (FDP), which served as Kohl’s junior partner. The FDP, which has long been Germany’s civil liberties, anti-tax and pro business party, should have raised major concerns over the move. But co-opted by power the few FDP doubters were swiftly silenced.
The second part of the unholy alliance were the opposition parties. The leftist Social Democrats (SPD) and the Greens both fiercely opposed to any property returns and even fought the return of smaller properties after 1949.
Thus, those disposed could expect no help from any party in government or the opposition.
Why didn’t Germany’s court overturn the decision?
The highest court in Germany, the Federal Constitutional Court in Karlsruhe, tends to be more political than the United States Supreme Court. Its 16 justices (serving in two separate chamber) are selected not by Germany’s chancellor or the mainly ceremonial federal president but rather by the political parties in both houses of parliament. Curiously, the justices are not even elected by the full Bundestag and Bundesrat but rather by a small election committee in each house. Each chamber of parliament elects eight judges. Within the respective election committees two-thirds of the votes are needed to put a judge on the high court bench. There are no public hearings for candidate judges as in the United Sates system.
Roman Herzog was chief justice of the Constitutional Court which ruled that non-return of property seized from 1945 to 1949 was legal. Herzog is a close friend of Kohl and the two men use the informal “du” when addressing each other instead of the formal “Sie”. In one of Germany’s most stunning conflicts of interest.
Herzog served as an adviser to members of East German Volkskammer – the rubber stamp parliament – on property matters in late 1989, says Heiko Peter, a Hamburg businessman and member of Kohl’s CDU who has been one of the most active figures in Germany fighting the property seizures.
Herzog warned the Volkskammer to secure the legal status of the 1945-49 seizures in the constitution so as not to face an avalanche of lawsuits. Herzog subsequently saw no reason to declare himself biased or prejudiced in any way when ruling on whether the confiscations were legal.
In a strange admission hinting at his failure to investigate the Kohl government claims brought to his court, Herzog has stated: “Historians will have to look into the accusation that the German government deceived the Federal Constitutional Court.” Critics reply that this was supposed to have been Herzog’s job.
There have been three Constitutional Court rulings over the confiscations:
1) 1991: The first ruling said that while the mass seizures of property from 1945-49 had been wrong they could not be reversed. This decision was especially based on testimony by Klaus Kinkel, who was then Germany’s justice minister, and Lothar de Maziere, the first and last democratically elected East German prime minister. Both Kinkel and de Maziere told the court the Soviet Union made non-return of property a condition for unification.
2) 1996: The second ruling confirmed the court’s initial findings despite subsequent public statements by Gorbachev, Shevardnadse, Bush and others that keeping the seized property had never been a precondition for unity.
3) 2000: this ruling rejected a claim that non-return of property violated the German constitution with regard to its equity clause. The claimants said they suffered discrimination given that people who lost property from 1949 to 1989 had it returned or were compensated for the full market value. But this was also rejected by the court in a close vote of four justices against four other justices. The justices who lost had sought to at least increase the amount of compensation which would be paid to those who lost a typical house. But the judges who prevailed said that not only property owners suffered injustice in eastern Germany but also all people who had their careers blocked or were otherwise persecuted by communist officials.
Another high court ruling still needed?
Strange as it may seem yet another high court ruling may be in the pipeline for Germany’s former property owners.
In recent years Russia has started to rehabilitate many people who were arrested, tried and executed or else forced to flee the Soviet Occupation Zone. The initial response of German authorities to rehabilitation was to stonewall. It was declared this had no bearing on the return of property. The problem with this tactic, however, is that property seized from 1945 to 1949 was taken on the basis of Soviet documents or declarations that individuals disposed had been Nazis or war criminals. People who have been rehabilitated by Moscow, or their heirs, have launched a series of lawsuits now going through German courts.
The case of Fritz Hoefig, a small industrialist who owned a drop-forge mill in the city of Erfurt, has given up hope to those have lost property. Hoefig was declared, “a war criminal and Nazi activist” by the Soviet secret police in 1945. He was sentenced to death and the loss of all property and shortly thereafter shot. In 1994 Hoefig was rehabilitated by the Russian government. Moscow issued a certificate saying his conviction had been “arbitrary” and was a miscarriage of Justice.
Hoefig’s wife died in 1981 and his 63-year-old daughter began legal action to recover his property. A state court in Weimar ruled on April 31, 2001 that the daughter had to be given back property –or in case– the exact amount paid for the property in 1992 by the person who brought it from the German state. This ruling cannot be appealed but federal authorities are attempting to stop payment.
A federal court in Berlin also ruled the same way on April 17, 2001 in the case of three children of an industrialist whose property was seized and who has now been rehabilitated.
Thus, almost 12 years after German unification yet another Constitutional Court ruling will be needed to decide whether the families of people wrongly persecuted during the Soviet occupation of eastern Germany should get back their property which was taken a second time by the Kohl government in what historian Norman Stone has called “the swindle of the century”.
Compiled by Leon Mangasarian
Leon Mangasarian received Ph. D. from the London School of Economic and has been a journalist based in Germany since 1989
Copyright 2001 by Leon Mangasarian
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