Those who clandestinely profit from the war

Image: Lio Voo


European arms companies in alliance with the United States and the lucrative proxy war

German arms manufacturer Rheinmetall once profitably served Kaiser Wilhelm and Adolf Hitler in World Wars I and II. In the Federal Republic of Germany, with founding Chancellor Konrad Adenauer, it resurfaced with the help of the United States: the company produced for the latter during the Korean War.

Today, it produces armored vehicles on tracks, air defense and unmanned aerial systems, submarine equipment, military propulsion systems, turret artillery systems, large and medium caliber weapons and ammunition for the main combat vehicle "Leopard", as well as for others. The company is also developing its own KFS1 “Panther” tank.[I] Production is for Ukraine, but for some time now the global arms business has been flourishing on all continents, with the presence of the US military.

“A mobility company, with respect for the environment”

Publicly, as presented on its website, Rheinmetall does not mention armaments. Interestingly, an armament manufacturer does not appear to produce any armament. Instead, it says, “Rheinmetall is an integrated technology company for eco-friendly mobility.”

And what does this company do? It develops “innovative solutions for a safe and livable future”. And Rheinmetall promises: by 2035 we will reach the zero carbon mark (“we will be CO neutral2”)! On the stock exchange, Rheinmetall is hidden under the commercial rubric: “Industrial Products”.

Thus, the corporation is an operator of peace, according to a new type of capitalism.[II] Externally painted green,[III] environmentally friendly, sustainable and innovative, focused on a future worth living: down to the last Ukrainian soldier! Calm! Something is missing. The Ukrainian army wants to be guided by western values. So likewise: to the last Ukrainian female fighter!

Anonymous and “unidentified” shareholders only

Besides being a company painted green, its most important characteristic is that, as a “German” arms manufacturer, Rheinmetall is not German at all. It is largely owned by American investors. But this is not stated anywhere on the group's website or in its annual reports. Officially, Rheinmetall presents its owners as anonymous.

Thus, the company anonymously summarizes its shareholders in the form of a number of “institutional shareholders”. According to the last published annual report of 2021, most of these anonymous are in the United States, namely 42 of them. Next, 23 are in “Europe” and three in “rest of the world”, making a total of 68 anonymous.

And those 68 unnamed people are followed by another 31 shareholders who still appear or disappear under other forms of anonymity. It starts with 17 “private shareholders”. Then three shareholders are listed as “other shareholders”, also unnamed. And then there are eleven shareholders: they again form a category of their own and are called “unidentified”. This actually violates German business corporation law. But then again, the German Securities and Exchange Commission doesn't care to notice.

Saying something like that sounds like the stuff of “conspiracy theorists” or, even worse, conspiracy theorists, doesn't it? And citizens in peace demonstrations, subject to police repression, could they now also simply identify themselves as “other” citizens, as “private citizens” or as “unidentified” citizens?…

Rheinmetall, owned by leading US investors

However, Rheinmetall's top ten shareholders are easy to identify from stock market sources: nine of the top ten shareholders are headquartered in the United States. Their names are, in this order: Harris Associates, Wellington, Capital World, Fidelity, LSV, Vanguard, BlackRock, Dimensional, BKF. They are among the top money managers in the US-led financial system. Of the largest shareholders, only Norges, the largest sovereign wealth fund, financed by Norwegian oil, is not American. In Germany, BlackRock & Co is also the main shareholder of the largest companies and important banks, eg Bayer, BASF, Siemens, Deutsche Bank. In this range, there are some other shareholders from Germany, Qatar, Singapore, Kuwait and China, but none of them in Rheinmetall.

This North American dominance, however, is even greater. Most of Rheinmetall's major shareholders are also interconnected. And that's still not enough: at the same time, shareholders such as Capital, Fidelity, Vanguard, Dimensional and BlackRock, as well as other US investors such as John Hancock and SEI, have additional stakes in Rheinmetall through smaller special funds. Capital's other fund, for example, is called Europacific Growth Fund.

Unnamed Super Rich Clients of BlackRock & Co

Wellington, BlackRock, Capital & Co pass most of Rheinmetall's profits on to their super-rich capital providers.

Wellington owns 5,09% of Rheinmetall shares. They are currently worth around €500 million. Wellington raised the capital to buy these shares from some 115 super-rich capital providers. Wellington manages its capital and transfers its annual Rheinmetall profits – after deducting a fee – to shell companies in tax havens. In this way, investors remain nameless and faceless. In the Cayman Islands of the Caribbean, for example, offshore High Haith Investors (Cayman) II Ltd, Strategies Master Fund (Cayman) LP and Elbe Investors (Cayman) as well as Wellington Management Hong Kong Ltd.

BlackRock owns 8,28% of the group's shares. They are worth around 800 million euros. BlackRock raised the capital to buy these shares from around 155 super-wealthy investors. The shell companies to which the profits of these depersonalized super-rich are transferred are called, for example, BlackRock Jersey International Holdings LP in the British Isle of Jersey, SAE Liquidity Fund in the Cayman Islands, and BlackRock Luxembourg Holdco in Luxembourg , the main tax haven in the European Union.

In this way, those who profit clandestinely from weaponry and war become incognito to the public, tax regulators and financial supervisory authorities. The tax evasion that this produces impoverishes the States, which spend more and more money on rearmament and wars, as in Afghanistan and Ukraine, thus becoming even more over-indebted.

Would any party represented in the German parliament or the US Congress be brave enough to at least raise official inquiry into the organized tax evasion and other activities of Rheinmetall shareholders?

Endorsed by the German co-management law

Several German front men ensure that everything retains its traditional German appearance. Well-paid, they make up the Executive Board and the Fiscal Council. Unlike shareholders, they are all named in the annual report.

The Chairman of the Board of Directors is Armin Pappberger (Executive Director). Other members of the Board of Directors: Dagmar Steinen (CFO), Michael Salzmann (Director of “compliance”), Philipp von Brandenstein (Head of Corporate Communications), Peter-Sebastian Krause (Board of Directors), Drik Winkels (Head of Investor Relations) and Dr. Rolf Giebeler (General Counsel).

The Chairman of the Supervisory Board is Ulrich Grillo, head of Grillo-Werke and Rheinzink GmbH, and also a member of the Supervisory Board of the energy group Eon. The other representatives of the capital part are: Dr. Susanne Hannemann, from Bochum University, and president of Pfeiffer Vacuum Technologie, and Dr. Andreas Georgi of the University of Munich. Engineer Dr Klaus Dräger comes from the BMW Board of Directors, and former Minister of Defense (from the Christian Democrats), Dr. Franz-Josef Jung, also fits the bill. Academic titles galore!

Trade unions and workers' councils are also represented on the Supervisory Board, in equal numbers. So there was theoretically no union repression at Rheinmetall, a principle adhered to by many other US companies and corporations in Germany, such as Amazon, and those in which BlackRock and Wellington & Co are also major shareholders. But, curious: at Rheinmetall, in particular, the co-management regime, in the best “German” style, is exemplary.

A corporation without borders and without law

“We are all over the world”. This Rheinmetall motto follows the logic of its North American owners. Even though the US military does not conduct wars, maneuvers and special operations, it is permanently active around the world, with 857 bases overseas, in ten NATO states such as Germany, in annexed or separate territories such as Hawaii, Guantánamo, Guam, Kosovo, as well as dozens of other states and territories, with cruisers, aircraft carriers and submarines, transports and fighters, bombers, drones, satellite stations, tanks, jeeps and trucks.

For on-time and local delivery, Rheinmetall says it operates 133 points in 33 countries, with 42 in Germany and another 45 in the rest of Europe. With the declaration of hostility against China, under the presidency of Barack Obama, the Americanization of the company expanded. To date, Rheinmetall has established 18 outlets in Japan, South Korea, Australia and New Zealand. In 2014, Rheinmetall hired the former German Minister for Economic Cooperation and Development, Dirk Niebel (Liberal Democratic Party - FDP) as an advisor. Since then, branches have been opened in South Africa, Qatar, Saudi Arabia and the United Arab Emirates.

Rheinmetall has gained experience in circumventing arms export controls under Chancellor Angela Merkel, through, for example, branches in other countries such as the United States, Italy and Austria. But now, in any case, global supply goes without borders.

European arms companies in alliance with the United States

On the American continent, Rheinmetall operates 15 points, ten of them in the United States (more than in any other country outside Germany). This is where technical innovations are driven: American Rheinmetall Vehicles (ARV) worked with Allison Transmission to develop the eGenForce electric drive system for the new generation of the US main battle tank, the Abrams. The engine, if necessary, can be switched to CO-free propulsion2. Thus, it is “green” and does not make noise, does not emit heat and is more difficult to be detected by drones enemies.

At the same time, Rheinmetall became an important partner of another US defense company. Together with Lockheed, Rheinmetall is now building the 6,5 meter long center section between the cockpit and the tail, from the F-35 fighter. The German Defense Ministry, for the first time, and on the occasion of the war in Ukraine, ordered 35 of them. Rheinmetall is thus expanding its order volume. The calculations, both on the German and American sides, also seek to make more European NATO members give up their own fighters, in favor of buying the super-expensive US stealth fighter.

Rheinmetall's shareholders, BlackRock & Co, are also leading shareholders in major European Union defense contractors such as Leonardo (Italy) and BAE Systems (UK) and, of course, the top ten US companies such as Boeing, Lockheed and Raytheon. In addition, BlackRock is present, with two of its managers, in the US government and, therefore, is also a political party of war – as it once was in Afghanistan and now in Ukraine.

Ukraine: the lucrative proxy war

Rheinmetall accelerated its rise to war in Ukraine. In 2021, Spanish ammunition manufacturer Expal was purchased. A new factory is being built in Hungary. Added cooperative ventures with the two North American advocacy groups. CEO Armin Pappberger is pushing for new orders from the German government for that country's armed forces, and expects additional orders from the United States and its deepening military alliances in Asia as well.

The “German” Rheinmetall Group is an integral part of US politics. Finally, Rheinmetall, together with Leonardo and Lockheed, in addition to Climate Neutrality Foundation, headquartered in Berlin, and Climate Imperative Foundation, based in San Francisco, were among the sponsors of the February 2023 Munich Security Conference. Weapons and wars now have to serve the “environment”.

Corrupt, over-indebted and before the war completely impoverished Ukraine is carrying out a long-prepared proxy war against Russia for the United States. Since last year, BlackRock has been the official adviser to the Ukrainian government for the “reconstruction” of the country. The longer the war lasts and the more Ukrainian women and men are killed, the more profitable the business becomes. Since 2014, tens of thousands of those Ukrainians have been sacrificed on the altar of “Western values”.

*Werner Rugemer, journalist and writer, he is a professor at the Louis and Maximilien University of Munich. Author, among other books, of BlackRock & Co. enteignen!: Auf den Spuren einer unbekannten Weltmacht (Nomen Verlag).

Translation: Ricardo Cavalcanti-Schiel.

Originally published on Strategic Culture Foundation.

Translator's notes

[I] Even if the Panther tank project is still purely conceptual, Rheinmetall announced, on February 9 last, its intention to offer it to Ukraine, to engage it in the ongoing combats. The proposal seemed unusually cynical until, less than a month later, on March 4th, Rheinmetall announced its intention to set up a factory in Ukraine to produce it, without even considering further estimates of the course and consequences of the current conflict. This lightning expansion operation by Rheinmetall tends to endorse the assessment of several international analysts, for whom Ukraine turned out to be, in effect, a testing ground for weapons and tactics, especially valuable to the United States (but also, collaterally, for Russia), in particular for the exercise of new and dense ISR operations (“intelligence, surveillance and reconnaissance”), which extend from satellites to electronic warfare (EW), and which suggest US preparation for a large-scale conflict with China. It is speculated that the increasing density of a veiled cooperation between China and Russia, exactly in the field of ISR, has to do with the recognition of this potential and of North American intentions.

[II] This reference to a “new capitalism” implicitly points to what the president of the World Economic Forum in Davos, Klaus Schwab, in his Great Reset project, defined as stakeholder capitalism (“stakeholder capitalism”).

[III] The expression “painted green” is analogous to the expression greenwashed (“washed in green”), a trait that makes up the range of strategies of the stakeholder capitalism. For a critical appreciation of this idea, see, for example, this article.

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