Follow the money
By ERIC SHULTZ
Your position now is that the Allies’ position is in no respect morally superior to Germany’s, and in fact you even go further by implication and apparently take the view that Germany’s position is morally superior to that of the Allies.
to John Foster Dulles, October 25, 1939
The impetus to write this series began with my consternation upon witnessing the Santa Fe Opera’s production of Menotti’s The Last Savage last summer. Racist and imperialist content in that modern-day orientalist mish-mash smacked of fascism: a movement and a mentality with which Menotti had life-long involvement, as I was soon to find out. I decided to broaden my inquiry to ask if something in the Santa Fe Opera’s institutional history might cause it to be fascism-friendly, and if there was something about Santa Fe itself that would engender such an institution. With respect to this last question, I discovered that Santa Fe adoptee Bronson Cutting, influential both as publisher of the New Mexican and as our U.S. Senator, actively propagated the fascistic voices of Ezra Pound and C.H. Douglas, while a decade earlier, proto-fascist D.H. Lawrence had left his mark on Taos and Santa Fe’s cultural canvas thanks to the hospitality of Mabel Dodge and Witter Bynner.
As our story reaches the Santa Fe Opera’s birth, fittingly this is my fifth column in the series, since it involves perhaps America’s greatest fifth-columnist, the redoubtable John Foster Dulles. By no stretch can we call him a father of the Santa Fe Opera, but it is almost literally true to call him the Opera’s great uncle. The story that follows is a bit of a wild ride, so hold on to your hat.
We are right to remember Dulles for his record as Secretary of State under Eisenhower. Together with his younger brother Allen as head of CIA, Foster snuffed out the flame of democracy and installed fascistic dictatorships in countries across the globe. According to a 1976 statement by Martin Ennals, then Secretary General of Amnesty International, “No country in the world has a worse record in human rights than Iran,” a phenomenal accomplishment due in no small part to the Dulles brothers for installing the Shah in place of a democratic government in 1953. The much maligned current regime in Tehran isn’t even in the same human rights violators’ league. Then in 1954, the Dulles brothers put into motion a scheme that toppled the democratic government of Guatemala and brought that country’s army to power: by the late 1980s, its genocidal attacks on indigenous communities had left hundreds of thousands dead and millions displaced. Such were their brilliant successes. As their final legacy to the free world, Foster and Allen plotted to overthrow the Cuban revolution, which had toppled the fascistic dictator and U.S. darling Fulgencio Batista, but Foster died before the Bay of Pigs fiasco and so was spared a stain on his otherwise stunning lifetime record.
The reader will recall that Foster Dulles extinguished democracy in Guatemala in connivance with the United Fruit Company, to which he already had connections through his private law practice. It is to his years in the old firm that we must now attend, since that is where he forged his links to the fascist fatherland.
The Wall Street law firm of Sullivan & Cromwell was a perfect place for Dulles to cultivate the art of violating foreign sovereignty. Its founding partner, William Nelson Cromwell, had lawyered the deal whereby the United States took over the half-dug Panama canal at the turn of the 20th century. Panama was then part of Colombia, and when the Colombian Senate refused to ratify the transfer treaty, Cromwell devised a solution. “The only way around Colombia’s obstinacy, Cromwell decided,” we learn from journalists Nancy Lisagor and Frank Lipsius,
was a revolution in Panama. [Cromwell] was the conduit between Washington and the revolutionaries, who were led by officials of the Panama Railroad Company, Cromwell’s client. The organizers of the revolution, who later became the top officials in the Panamanian government, included the railroad’s general superintendent, assistant superintendent, freight agent, land agent, and even company surgeon.
The newborn country granted the United States, not a 99-year lease as Cromwell had been asking of Colombia, but a Canal Zone ten miles wide,
in perpetuity as if [the United States] were the sovereign of the territory… to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority.
This insult and injury to the national interest by Panama’s first government remained in effect until the Torrijos-Carter Treaties restored Panama’s territorial integrity in 1977. In any event, such was the level of the practice at Sullivan & Cromwell.
In 1911, former Secretary of State John Watson Foster imposed on William Cromwell to hire a promising George Washington University Law School graduate just back from a year at the Sorbonne, his grandson and namesake John Foster Dulles. Young Dulles advanced quickly. At the end of WWI, he had become counsel for the U.S. Reparations Board at the Paris peace negotiations and “participated in redrawing the world’s boundaries.” His conviction that the Versailles Treaty saddled Germany with unfair obligations would mark a decisive turn in his career.
In 1927, Dulles became Sullivan & Cromwell’s one and only managing partner with considerable discretion to set priorities. Between 1924 and 1931, he arranged for over $1 billion in loans to Germany through private investment in government and commercial paper drawn up by S&C. This remarkable run began with a bond issue for the steel giant Krupp. Dulles pointedly avoided seeking the required State Department approval, knowing “the department had no authority to stop the transaction” and wanting “to avoid State Department scrutiny of whether the German factories were producing military hardware in violation of the Versailles Treaty.”
After the Nazis took power in 1933, Dulles redoubled his efforts on behalf of his German clients. Although he justified Nazi aggressions in Foreign Affairs and Atlantic Monthly, not to mention his 1939 book War, Peace, and Change, his support went far beyond public relations. Of particular note were his actions for the International Nickel Company (Inco), a client for which he was also a director and member of the executive committee.
Without Dulles, Germany would have lacked any negotiating strength with Inco, which controlled the world’s supply of nickel, a crucial ingredient in stainless steel and armor plate…. In a Foreign Affairs article, Dulles… led the assault on Canada’s effort to restrict the export of nickel as a strategic war material…. Legislation prohibiting Canadian export of nickel was never enacted, and Dulles assured the Germans of a steady supply….
Not only did Dulles assist the Nazis in their armaments buildup, he took steps that hampered Allied military production during the war.
The client in this case was the Robert Bosch Company subsidiary American Bosch, “the exclusive licensee… for one of Germany’s most valuable” and strategically important “patents – for fuel injection in diesel motors.” To protect American Bosch against seizure by the U.S. Alien Property Custodian, the Reich arranged its sale to members of neutral Sweden’s wealthiest family, the Wallenbergs – likely historical model for the Nazi-ridden Vanger family in Stieg Larson’s The Girl with the Dragon Tattoo – with a secret agreement to sell the company back to its German parent after the war.
Dulles devised an intricate network of companies that seemed American without transferring power out of Germany. He had the Wallenbergs put their shares in a Delaware company, Providentia, Ltd., of which Dulles was the sole voting trustee. Under the terms of the irrevocable trust, Dulles had full authority to handle or dispose of the shares.
The subterfuge ultimately failed and in May of 1942, the Alien Property Custodian confiscated American Bosch. More than a year after the United States had entered the war,
on December 29, 1942, a court order in an antitrust suit against American Bosch forced the company to cancel its agreements with the German parent company and license all Bosch patents “to American manufacturers without royalties for the duration of the war.”
Lisagor and Lipsius quote an internal government document from October 11, 1944 noting that “Dulles, as attorney for Wallenberg, and with considerable experience in the international field certainly must have known that American Bosch Company was German owned.” While his actions affecting strategic areas of industry and trade amounted to collaborationist heavy lifting, he didn’t ignore the lighter tasks. At the behest of a banking client, Edwin S. Webster, Jr., Dulles helped to organize America First, a putative expression of isolationism that also gave Axis sympathizers cover to oppose U.S. entry into the war. Unlike his brother, Allen Dulles displayed exemplary loyalty to his country during the war, though he and Foster clearly operated in the same world. “It was a source of permanent envy to his older brother that Allen had met Hitler but Foster never did.”
When the World War had ended and the Cold War begun, the Dulles brothers toiled shoulder to shoulder, as indicated at the start of this section. Though historically a pragmatist and a deal-maker, Foster made “dogmatic” anti-Communism the guiding principle at State for several reasons, not least because it offered “the easiest way to rehabilitate Germany, as a bulwark against the enemy in Eastern Europe.” Under Allen, the CIA grew into a complex organization capable of organizing ballet performances and Jackson Pollock exhibitions in Europe while dismantling democratic movements with torture and political murder regimes in places such as Iran and Guatemala. But riding high on the swell of America’s post-WWII strength, Foster and Allen took on a challenge that proved too much for their seasoned abilities.
It was enthusiasm over Guatemala and the CIA operation there which encouraged Mr. [Foster] Dulles, General Eisenhower and Richard Nixon to believe the Agency could rid the United States of the “threat” of Fidel Castro by duplicating “Operation Success,” as the plot to overthrow [Guatemalan president] Arbenz was code-named.
The 1959 Cuban revolution presented a difficult challenge, but Foster and Allen could count on the help of a third brother, this one a brother from their Sullivan & Cromwell family.
The planning for the invasion started in the Eisenhower administration, when the Dulles brothers had access to information about Castro through Laurence A. Crosby. Crosby was a Sullivan & Cromwell partner who had resigned from the firm in 1946 to live in Cuba, where he held a number of executive positions in sugar companies and was the chairman of the U.S. Cuban Sugar Council from 1954 to 1960.
Laurence Crosby appears “of counsel” on S&C cases dating back to 1917 (Schirmer v. Kline, et al.). In other words, Crosby had made his career just a step behind John Foster Dulles.
The complex 1936 case, Havana Electric Railway, Light and Power Company v. Commissioner of Internal Revenue, would have made Crosby something of an expert in both Cuban and American tax law. And through his work on the 1943 Unites States Cane Sugar Refiners’ Ass’n et al. v. McNutt, he would have broadened his contacts in the sugar industry. In short, during his three decades at S&C, Crosby would have accumulated the specialized knowledge and personal contacts to be a leader of the specific U.S. business interests the Batista dictatorship was being propped up to serve. In other words, his was but another typical biography in the Sullivan & Cromwell tradition.
The U.S. Cuban Sugar Council represented the central problem the revolution intended to solve. The arrangement worked like this: through direct investment in Cuban plantations and sugar mills, U.S. business interests benefited; by importing Cuban sugar on favorable terms, U.S. interests benefited again; with sugar as its leading export and source of foreign exchange, having virtually no domestic manufacturing, Cuba spent its sugar income on manufactured goods overwhelmingly from the United States, thus benefitting other sectors of the U.S. economy; and to keep Cuba impoverished and dependent, with policies ranging from blocking tariffs intended to encourage domestic manufacturing to smashing labor unions among cane cutters and mill workers, Cuban governments – often brutal torture states such as the second Batista regime – served at the pleasure of Washington and U.S. business interests represented by organizations such as the U.S. Cuban Sugar Council. Although the brutality and corruption of the Batista dictatorship, along with the general atmosphere of moral degradation engendered by the mob-infested tourism industry, were conspicuous evils the revolution sought to extirpate, at the nexus of Cuba’s deep socio-economic predicament sat Laurence A. Crosby (one imagines him in white shoes and a freshly laundered guayabera, unbesmirched by the blood and filth of his surroundings).
His niche in U.S.-Cuban relations, and maybe loyalty to the old firm, would explain Crosby’s willingness to assist the Dulles brothers in plotting a profoundly illegal and grotesquely immoral act of violent international subversion that extended the long Sullivan & Cromwell (and U.S, government) tradition of violating foreign sovereignty.
Laurence A. Crosby was the father of John O. Crosby, founder of the Santa Fe Opera. It would, of course, be inappropriate to suggest that Crosby the younger be viewed in the light (or shadow) of Crosby the elder’s activities and associations connected to fascism. Sins of the father, and all that. But my interest is not so much with John Crosby as it is with the Santa Fe Opera. Crosby the younger was the Opera’s founder, but Crosby the elder was its first financial backer, putting up nearly a quarter million dollars of his personal fortune to purchase the Opera’s site and build the original theater. It would be journalistic dereliction of duty not to follow the money, and in the case of the Santa Fe Opera, the money leads through Laurence A. Crosby to Cuba under Batista and Nazi Germany. “Sullivan & Cromwell thrived on its cartels and collusion” with the Third Reich. As a partner, Laurence A. Crosby got his share of Nazi gold, some of which eventually became part of an opera house in New Mexico.
In our next installment, efforts to put the newborn Santa Fe Opera on the map score big with help from the 20th Century’s most famous composer, but what were his politics like? Take a wild guess!
 Lisagor, Nancy and Frank Lipsius. A Law unto Itself: the untold story of the law firm Sullivan and Cromwell. New York: Paragon House 1989, p. 339.
 Quoted in Reza Baraheni. “Persian Today: No Magic Carpet Rides.” Matchbox (Amnesty International), Fall 1976.
 Manz, Beatriz. Refugees of a Hidden War: the Aftermath of Counterinsurgency in Guatemala. Albany: State University of New York Press, 1988.
 Schlesinger, Stephen and Stephen Kinzer. Bitter Fruit: The Untold Story of the American Coup in Guatemala. New York: Anchor Books 1983, p. 106, to wit: Dulles’s actual client was J. Henry Schroder Banking Corporation, financial adviser to International Railways of Central America (IRCA), whose Guatemalan interests United Fruit wanted to take over. “Dulles, as general counsel to Schroder, handled the negotiations, arranging a cozy deal with United Fruit at the expense of his putative client, IRCA, and reaping a tidy profit for the Schroder Banking Corporation.”
 Lisagor and Lipsius, p. 47.
 Text of the Panama Canal Treaty, quoted in Ibid., p. 49.
 Ibid., p. 61.
 Ibid., p. 70.
 Ibid., p. 101.
 Ibid., pp. 90-92.
 Ibid., pp. 125-26.
 Ibid., p. 147.
 Ibid., p. 150.
 Ibid., p. 151.
 Ibid., p.137.
 Ibid., p. 129.
 Ibid., p. 208.
 Ibid., pp. xii-xiii.
 Ibid., p. 214.
 McGillivray, Gillian. Blazing Cane: sugar communities, class and state formation in Cuba, 1868-1959. Durham: Duke University Press 2009. Situating in-depth case studies within their national and international contexts, this book explores Cuba’s sugar economy with unprecedented detail and clear understanding.
 The senior Crosby’s largesse in funding the Opera is proudly featured in both official histories: See Scott, Eleanor. The First Twenty Years of the Santa Fe Opera. The Opera Association of New Mexico 1976, and Huscher, Phillip. The Santa Fe Opera: an American pioneer. Santa Fe: The Santa Fe Opera 2006.
 Lisagor and Lipsius, p. 125.