Authors: Frederick Taylor
KoKo in its most refined form was the creation of Alexander Schalck-Golodkowski. Born in Berlin in 1932 to stateless Russian immigrants, he was adopted at the age of eight by a German couple named Schalck, leading to his hyphenated name. He began work in a state-owned export company before rapidly switching to the GDR Ministry of Foreign Trade and Inner-German Relations. Clever, charming and politically reliable, with the face of a jolly medieval bishop and the mind of a highly efficient calculating machine, he scaled the ladder with extraordinary speed.
Schalck-Golodkowski rose to the key position of First Secretary of the SED party organisation in the Ministry of Foreign Trade, link man between the party and the export-orientated technocrats. In 1966, still not yet thirty-five years old, he was put in charge of KoKo, which even then was envisaged as a covert channel through which the state’s financial solvency could be assured. In 1967, tellingly, he was given the rank of
Stasi
colonel and the title of ‘Officer in Special Mission’ (i.e. secret agent). To the outside world, he became Deputy Minister for Foreign Trade and later State Secretary in the Foreign-Trade Ministry.
By the mid-1970s, Schalck-Golodkowski was in charge of a personal empire unlike any other, East or West. He was certainly more powerful than the minister who was technically his superior, and operating on an equal level with Politburo members.
KoKo built up a labyrinthine network of more than 220 mailbox and front companies and more than a thousand bank accounts in East and West. It sold arms to the Third World-most successfully trading with both Iran and Iraq during the war that begin in 1980-and through front companies secretly imported high-tech goods from the West that had
been placed on the banned list by NATO. In some cases these illicit imports were put directly into service, in others the prototypes were simply copied in East German factories and manufactured in the required quantities. This particularly applied to sophisticated electronic equipment coveted by the
Stasi
.
KoKo also exported large quantities of valuable antiques and artworks to the West, where they were sold for hard currency. In many cases these treasures were confiscated from their owners, who had previously been presented with huge and mostly fictitious tax bills. In some cases, owners were imprisoned until they agreed to cede their possessions to the state.
A final, blatantly criminal source of foreign currency, whose proceeds were ultimately disposed of by KoKo, came from the GDR’s sale of its political prisoners to the West. Political prisoners as ‘export items’.
The trade in prisoners began in 1964, when Axel Springer cut a deal by which church and other oppositional figures were freed after payment of substantial sums of hard currency. This group included Klaus Schulz-Ladegast’s father, though not Klaus himself. At least 200,000 East Germans were convicted of political crimes of some kind in the forty years of the GDR’s existence. About 34,000 of those prisoners were released, usually to the West, on payment by the West German government. In the 1960s, the price per head was around DM 40,000, while by the 1980s the West Germans were paying almost DM 100,000 for each human being set free.
Prior to the ‘sale’, prisoners were transferred to a holding prison at Chemnitz (then Karl-Marx-Stadt). A West German bus contractor supplied specially modified buses, which were fitted with revolving number plates-East German ones for the trip from the border to the prison and back, and West German ones from the time they crossed into the West.
The official proceeds of prisoner-trading amounted to at least DM 3.4 billion; Schalck-Golodkowski more recently put the figure at around DM 8 billion.
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There were cases when an individual lodged a (perfectly legal) visa application and was promptly arrested on a political charge, after which they could be ‘sold on’ to the West Germans. If they really wanted to leave, the East German authorities’ reasoning went, the state might as well earn something from it.
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Add to this the agreements between East and West Germany on maintenance of the transit highways between Berlin and West Germany, blatantly exploitative visa and currency-exchange agreements, lucrative deals involving disposal of ‘special waste’ from West Germany in the East, and the manipulation of Western grants for the rebuilding and repair of Catholic and Protestant churches in East Germany, and the sums routinely transferred from West to East were enormous. They were thought to total between one and two billion per year in rock-solid West marks.
Honecker’s regime always drove a hard bargain. And the West always paid up. No one believed that reunification was possible, but at least the Easterners’ sufferings could be alleviated. For the quarter-century that followed the building of the Wall, this was the chief priority for the Easterners’ richer, guilty Western cousins.
The final triumph—if that is what it was—of this ruthlessly hardnosed begging-bowl diplomacy on the part of the East German regime came with the big West German credit agreement of the 1980s.
The spike in the oil price around 1980/1 caused a crisis, but soon found East Germany’s economic bureaucrats playing a clever game, importing oil and gas products from the USSR at favoured-nation Eastern prices, then re-exporting these to the West, where they could be sold for much higher prices, with the GDR pocketing the difference in hard currency. To make this system work, expensive, ultra-sophisticated refining equipment had to be purchased from the West and Japan, but it was worth it. The sale of these mineral oil products made up about a third of the entire export earnings of the GDR in the early 1980s.
The problem was that these products had to be removed from the domestic market. Soon, with a shortage of oil-derived asphalt, East German roads began falling into disrepair. With East Germany unable to afford Polish black coal to replace oil, the country fell back on its own supplies of brown coal, also called lignite. The mining and burning of this dirty and inefficient fuel increased dramatically during the 1980s, as did the accompanying pollution. And, as part of a general export and foreign-currency drive, goods that normally supplied the domestic market were sold abroad, from eggs and butter to furniture and bicycles. In 1982, imports fell 30 per cent and exports rose by just over 9 per cent.
Honecker’s bargain with his people, guaranteeing their standard of living in exchange for their compliance, was on the brink of collapse. Then the price of oil began to fall, which it would continue to do throughout the 1980s. Western lenders, who had seen East Germany as a reliable client, began to draw back from further lending.
The East German government was forced to make a drastic move. With the help of Schalck-Golodkowski and some surprising friends, the GDR enlisted a huge Western credit in order to keep going in the style to which it had become accustomed.
The particularly surprising friend was Franz-Josef Strauss, the bull-like, aggressively conservative Bavarian political boss who had been Defence Minister when the Berlin Wall was built. Strauss, vilified twenty years previously by East German propaganda as an ultra-reactionary warmonger who was trying to get his hands on a nuclear bomb for West Germany, now emerged as middleman. He arranged a deal between a consortium of West German banks and the East German government—or rather, a small group within the GDR leadership consisting of Honecker, chief planner Günter Mittag, and the ubiquitous Schalck-Golodkowski.
The GDR gained credit facilities on favourable terms, amounting to a billion in 1982 and almost as much in 1983. The East German government did not draw on the money, but used the fact of the credit’s existence to restore faith in its own solvency. In return it had, for once, to pay a political price. In 1984, 35,000 East Germans were allowed to emigrate to the West.
Money talked. That had become a given in relations between Bonn and East Berlin. But the East-West situation was subjected to some seismic shifts in the 1970s and early 1980s, and it was not clear where they were leading. One moment there was a relaxation of tension, an intergovernmental visit or a credits deal, the next moment the great powers were stationing missiles aggressively close to each others’ borders.
Out of this confusing scenario emerged, gradually, an endgame to the Cold War. The Western triumphalists claim it was the West’s superior economic and military power that proved decisive. Others point to the inch-by-inch liberalisation that was quietly forced on the East by world
opinion and changes in the desires and hopes of ordinary people in the Communist countries.
In other words, some point to the triumph of the Hawks, the others to the triumph of Helsinki.
Perhaps it was both.
THE VERY FIRST AND
very last victims of the Berlin Wall died by falling: the first in August 1961 after a desperate plunge from a window high on a block in the Bernauer Strasse; and the last in March 1989 when a homemade balloon crashed to the ground in the West Berlin suburbs, inflicting fatal injuries upon the man travelling in the basket beneath. The balloon’s pilot and builder was a young East German who had planned to sail over the by now impregnable Wall. He actually succeeded, but almost immediately ran into bad luck, in the shape of a power line on the Western side. Had his wife not lost her nerve in the last moments before take-off, she and their small child would have perished with him.
It might be said that one died because at the beginning the jump to the West seemed fatally easy; the other because at the end of the Wall’s life it seemed so terribly difficult.
And the Wall felt so permanent, to all but a few.
On 1 December 1978,
Stasi
observers at the border-crossing complex facing Checkpoint Charlie observed unusual activity on the Western side. An unknown man and a woman were being filmed by a TV crew outside the US army’s checkpoint shack. When the filming finished, at 10.40, it was reported that they left the area. However, about four hours later they returned in a black Plymouth sedan with US Mission licence plates. An army sergeant drove them through the checkpoint and into East Berlin.
Only when they presented their passports were the couple in the back of the Plymouth identified as two Americans, a man of sixty-seven and a woman ten years younger. Their names were Ronald and Nancy Reagan.
The Reagans took an hour’s drive around East Berlin, like any tourists, and then returned to the West. The East German authorities had for the
first time laid eyes on the man who, many say, would prove to be the nemesis of their regime and all it represented. However, the
Stasi
observers do not, at that point, even seem to have realised who the man and his wife were.
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This would change very soon.
The former governor of California and soon Republican candidate for the presidency would present a great challenge to the East. However, there was another challenge present that had already been there for several years but whose significance grew quietly, almost stealthily.
This one came in the form of a piece of paper, a document known as the Final Act of the Conference on Security and Co-operation in Europe, also known as the Helsinki Accord. The section dealing with human rights read in part:
The participating States will respect fully human rights and fundamental freedoms, including the freedom of thought, conscience, religion or belief, for all without distinction as to race, sex, language or religion.
They will promote and encourage the effective exercise of civil, political, economic, social, cultural and other rights and freedoms all of which derive from the inherent dignity of the human person and are essential for his free and full development.
Other clauses dealt specifically with promoting freedom of movement and of thought, and the reunification of families.
This ringing declaration was signed on 1 August 1975, after two years of negotiations, by the representatives of thirty-five nations from East and West, including the German Federal Republic and the German Democratic Republic. At the signing ceremony in the Finnish capital, Erich Honecker sat proudly between Chancellor Helmut Schmidt of West Germany and President Gerald Ford of the United States. Honecker was a legitimate, recognised international figure, and the GDR no longer a pariah regime.
There is a price for everything. The East German leadership, expert practitioners of
realpolitik
, none the less did not seem to suspect that what they had signed went against almost every practice of their regime, and most spectacularly against the atrocity that was their fortified Wall through the middle of Berlin.
Ordinary East Germans were, not for the first time, quicker on the uptake. On 10 July 1976, a 46-year-old doctor from the town of Riesa in Saxony, Karl-Heinz Nitschke, composed a ‘Petition for the full attainment of human rights’. Referring to the Helsinki document, he and thirty-three other GDR citizens signed this petition with full names and addresses, demanding from the government that it comply with the treaty’s guaranteed ‘right to free choice of place of work and residence’ and allow them to travel freely to the West. They delivered this petition to the State Council of the GDR, to the UN Human Rights Commission in Geneva and to the Western media.
Other citizens from the area around Riesa and Karl-Marx-Stadt (Chemnitz) soon gave their support to the document. Many were arrested by the
Stasi
and sentenced under the catch-all laws forbidding ‘anti-state agitation’ and ‘anti-state connections’. Nitschke himself was imprisoned and interrogated over a period of two years until August 1977, when he was bought out by the West German authorities.
Far from discouraging the emigration movement, Nitschke’s case acted as a spur. Collective applications for exit visas became more common, especially in the early 1980s. Western organisations such as ‘Helsinki Watch’ (which later changed its name to Human Rights Watch) publicised the persecution of such people. In 1984 East German citizens demanding the right to travel outside the GDR occupied Western embassies in East Berlin.