Introduction
After World War II, Swedish neutrality was formulated as nonalignment in peacetime, aiming at neutrality in the event of war.Footnote 1 Without formal military allies the country relied on its own military capacity to deter aggressors. At the height of the Cold War, Sweden, with its around eight million inhabitants, had the fourth largest air force in the world, could mobilize 850,000 soldiers, produced tanks, fighter-jets, and submarines, and planned for a nuclear weapons program.Footnote 2 No other country except for Switzerland spent as much in terms of GDP per capita preparing for the economic consequences of an armed conflict.Footnote 3 All this required an exceptionally close partnership between the state and the private arms industry in what can be labelled as a “neutrality-industrial complex” (NIC). As previous research has noted, it was not only the welfare state that grew significantly in the postwar decades; so did the warfare state.Footnote 4
The most important business group in Sweden’s neutrality-industrial complex was the Wallenbergs. Family-controlled firms such as Saab-Scania, Ericsson, ASEA, and Hägglunds were major suppliers of defense material, and the most influential family member during the Cold War, Marcus Wallenberg, had longstanding connections with both the defense and political establishments.Footnote 5 However, the family’s economic dominance stretched way beyond arms production. In the late 1950s, Marcus Wallenberg was chairman of an astounding 33 companies and a board member in another 31. About a decade later, almost a quarter of Sweden’s industrial workforce was employed in a Wallenberg company.Footnote 6 The family’s unique economic and political influence has been recognized by earlier research, but the deep cooperation between the Wallenberg group and Swedish military intelligence has been missing.
In corporatist Sweden, the relationship between the business and intelligence communities was close. This article studies the cooperation between big business in Sweden, especially Stockholms Enskilda Bank (SEB, from 1971 Skandinaviska Enskilda Banken) and other companies controlled by the Wallenberg family, and military intelligence during the Cold War. It will show SEB’s previously unknown role as an information provider, financial contributor, and facilitator of banking services to the to the intelligence agencies and how the bank played a central role in the establishment and development of the economic intelligence organization Öst Ekonomiska Byrån (the East Economic Bureau, EEB/ÖEB) that provided state and military agencies as well as private business with economic information about the Communist bloc. The study adds to the (sparse) literature on cooperation between intelligence agencies and the business community. This literature has shown how secret services have used corporate camouflage with spies posing as businesspeople abroad, and information sharing could lead to commercial gains for both state and private actors.Footnote 7 Although there is a growing body of literature on economic intelligence, researchers have pointed to it as the missing field of intelligence history, and that the economic aspects of the Cold War are understudied.Footnote 8
The article’s aim is to increase our understanding of how the Wallenberg family’s exceptional position in Sweden’s neutrality-industrial complex made it a vital partner to the intelligence community. By studying this cooperation, the article will answer how the family supported secret Swedish military intelligence from 1945 until the Berlin Wall came down in 1989. It will also discuss the reasons the family had for doing so.
The rest of the article is structured as follows. First, there is a summary of the concept “military-industrial complex” (MIC) from a business historic perspective and how it relates to the Swedish context before presenting earlier research on the Wallenberg family’s involvement in Sweden’s post-1945 warfare state and how big business supported the development of a separate and semi-secret organization for economic intelligence. The introduction ends with a discussion on sources and methods. Then follow two longer empirical sections. Lastly, findings are discussed in the conclusion.
A Neutrality-Industrial Complex
In his 1961 farewell address, US President Dwight Eisenhower warned of a “military-industrial complex” that could give rise to a “disastrous rise of misplaced power” and threaten society’s ability to commit resources to other programs than the “huge industrial and military machinery.”Footnote 9 As historians Michael Bernstein and Mark Wilson note in a special issue of Enterprise and Society on the historical developments of the MIC as both an empirical and theoretical phenomenon, just a few years earlier sociologist C. Wright Mills had published The Power Elite that described the rise of a massive Cold War-era alliance between government and industry, shielded from both democratic oversight and market competition.Footnote 10 Critical research on the MIC grew until after the Vietnam War, when military spending in the United States declined and American academia became more interested in other issues. But as Bernstein and Wilson note, the subject remained interesting for business and economic historians with published studies on the MIC’s impact on regional development, technological innovation, and its history and development outside of the United States. More recent studies have focused on the growth of privatization of military manpower. Present researchers also tend to use the term “national security state,” rather than military-industrial complex.Footnote 11
Political scientist Masako Ikegami-Andersson has summarized MIC theories in two categories. The first group of models see the MIC as determined by domestic factors and driven by people with institutional and economic interest in high military expenditure: The “Power Elite” Model described above, The “Weberian bureaucracy” model in which an ever expanding state capitalistic administrative bureaucracy is the root of the MIC, and a Marxist Model in which the MIC is a profit-making device for monopolistic capitalists to suppress socialism abroad. The second group of models focus on other dimensions: The “Techno-Industrial” Model acknowledges industrial development and technological innovation within the arms industry as the basic driver of the MIC, The Resource Mobilization Model which suggests that the MIC develops as a response to national security issues and external military threats where the arms industry is vital for quick mobilization and self-reliance; and finally the Big Science Mobilization Model in which the MIC is a function of the ability to mobilize advanced technology and scientific knowledge on a very large scale (e.g., the Manhattan Project).Footnote 12
In the Swedish case, neutrality, in combination with a domestic private arms industry and a political wish for credible military deterrence, formed a version of the MIC that thus can be labeled as a neutrality-industrial complex. Ikegami-Andersson concludes that World War II drove the arms industry’s modernization as the state took a crucial role in planning and financing, but as business historian Ulf Olsson has noted, captains of industry gained great influence in a highly centralized organization for military acquisition. After the war, the basic organization feature of the NIC remained as military R&D spending (in terms of percentage of total R&D spending) approached that of the great powers.Footnote 13 Ikegami-Andersson concludes that the “arms industry was a ‘successful’ example of Swedish corporatism since World War II in which the government, industries and well-organized trade unions cooperated and coordinated their interests.”Footnote 14
Earlier research has described the 1950s and 1960s as the zenith of Swedish corporatism, where organized interests established rules for the functioning of the labor market, collective wage bargaining, and were invited to take an active part in the political decision-making process.Footnote 15 Political scientist Peter Katzenstein argues that the country’s democratic corporatist institutions (in contrast to the fascist alternatives in Germany and Italy) were born in the 1930s but with long historical roots. In small European states that relied on access to global markets, truces between business and labor were translated into durable peace, leading these countries to specialize and seek economies of scale in export markets. According to Katzenstein, a specific trait of democratic corporatism was the development of an ideology of social partnership between influential interest groups where a “‘culture of compromise’ […] manages to couple narrowly conceived group interests with shared interpretations of the collective good.”Footnote 16
Economic historians Niklas Stenlås and Per Lundin write that even though the Social Democrats and the Wallenberg family were ideologically opposed, their big business industrialism cooperation was so effective that it is “justified to speak of a state-industry alliance during the Social democratic era.”Footnote 17 The corporatist political culture ensured major investments in military technology as politicians from left to right, business and union leaders, and the defense establishment, agreed on maintaining a strong military capability. In practice, this was achieved through a state buyer that lowered risks by covering development and production costs, while private contractors (earlier research has labelled this a “development pair”) with the necessary know-how were ensured predictable profits on really big projects, such as building fighter jets. As Stenlås and Lundin note, the military production was often complemented with civilian products as in the case of Saab (fighter jets—cars), Ericsson (radar systems—telecommunications), and Volvo (aircraft engines for the air force—cars).Footnote 18 In order to achieve economies of scale and to show the world Sweden’s military capabilities it was important that the private arms producers were allowed to export.Footnote 19
The Wallenbergs and the Warfare State
The Wallenberg family’s connections to the government, and especially the Social Democrats during the party’s long rule in the twentieth century, are well-known, but recent research has also shown the family’s more hidden attempts to support the center-right parties and political projects that ultimately aimed at getting the nonsocialists back to power.Footnote 20 The relationship to military intelligence has been alluded to but not described or analyzed at any depth. Intelligence historian Wilhelm Agrell writes that Marcus Wallenberg’s “finance empire disposed of the best intelligence apparatus in Swedish business” and journalist Enn Kokk mentions the good connections between spy-chief Birger Elmér and the family patriarch, who was also held in high regard by the Commander-in-Chief of the armed forces, Stig Synnergren, and the Social democratic Minister of Finance, Gunnar Sträng, with whom Wallenberg shared a nationalistic outlook.Footnote 21 Journalist Mikael Holmström mentions the SEB director Karl-Arvid Norlin as “a sort of intelligence chief for the Wallenberg sphere.”Footnote 22 Political scientist Ola Tunander states that both Marcus Wallenberg and, later, his son Peter functioned as liaisons between Swedish top military commanders and American political leadership. The Wallenberg family also gave money to the Swedish Defense Staff for the establishment of a Stay Behind group in case of occupation.Footnote 23 As a continuation of his conscription, Marcus Wallenberg became a reserve artillery officer, but according to his biographer Ulf Olsson, his own enthusiasm for military life remained limited.Footnote 24
Marcus Wallenberg’s network spread far beyond Sweden’s borders. During the 1930s and 1940s, he was sent abroad by the government to negotiate trade deals that would secure imports and Sweden’s economic relations with the Western powers. As Olsson notes, many of the companies controlled by the family were also of strategic importance for Swedish armament, and Marcus Wallenberg did not “embarrass himself to promote their interests” while at the same time negotiating on behalf of the country. Through his positions in both domestic and international business associations, including as chair of the International Chamber of Commerce, he became seen as the number one representative of Swedish industry.Footnote 25 Within the Wallenberg group, Marcus shared power with his older brother Jacob. Following the so-called Bosch affair, Marcus took over the reins from his brother as managing director of SEB in 1946, and Jacob then became chairman of the family’s investment company, Investor.
When World War II broke out, the world leading German electromechanical firm, Bosch, feared that its foreign subsidiaries in Allied countries would be seized. The Bosch group, with long-standing relations to the Wallenbergs, sought a buyer in a neutral country, and in 1939, a deal was struck in which the Swedes acquired ownership over parts of Bosch’s foreign assets, including its American division. The deal entailed an understanding that Bosch would be able to buy back the assets after the war, something which the Wallenberg brothers had not been transparent about to either American or Swedish authorities. In 1945, the affair leaked to the American press, and the Treasury Department banned the brothers and SEB from conducting business in the United States. In 1947, their status as “special blocked nationals” was removed as part of the larger so-called Safehaven negotiations on German assets, and in 1950, a settlement was reached with US authorities that normalized relations. Jacob then returned to SEB, this time as chairman, but the rift between brothers created by the Bosch affair was never fully bridged as he felt that his brother had made him the scapegoat. Although he had also been negotiating on the government’s behalf in the 1930s and 1940s, he did not continue to nurture contacts with the Swedish defense and political establishments in the same manner as his brother.Footnote 26
For the Wallenberg group, the 1950s and 1960s were a period of rapid expansion with ownership in successful engineering companies with global aspirations such as Electrolux, Ericsson, SKF, Swedish Match, Atlas Copco, and Alfa Laval.Footnote 27
In the early 1970s, Wallenberg-controlled companies produced almost 40 per cent of the armed forces’ military equipment. But Swedish companies could not produce everything, and already in the 1950s, there was far-reaching cooperation with the Western defense industry. Especially the air force and navy relied on access to advanced technology from other Western powers, particularly the United States, and as weapons systems became more complex so did the reliance on acquiring foreign technology. The self-sufficiency degree decreased by around 20 percent from the 1960s to the 1980s.Footnote 28 These close but of course secret links between NATO countries and supposedly neutral Sweden regarding military cooperation have been quite extensively covered by scholars and journalists.Footnote 29
The Wallenbergs and Swedish Economic Intelligence
The industrialized warfare of World War I made it obvious that superior economic resources were a deciding factor for military outcome and in World War II both sides worked systematically to undermine their opponents’ productive capacities. The importance of economic intelligence continued to grow during the Cold War and keeping track of the Soviet economy became, as a Central Intelligence Agency analyst in the United States put it, “the largest single project in social science research ever undertaken.”Footnote 30 So too in Sweden, where national security policy was closely connected to estimations of the Soviet Union’s intentions and military capabilities.Footnote 31
As this article will show, SEB and other firms controlled by the Wallenberg family were instrumental in establishing the part of Sweden’s secret military intelligence, the East Economic Bureau, that analyzed economic developments in the Communist bloc as a public-private cooperation. This should perhaps not come as a surprise; being well-informed is key for both banks and intelligence agencies. After all, the economist George Stigler concluded already in 1961 that “one should hardly have to tell academicians that information is a valuable resource: knowledge is power.”Footnote 32
A very recent study by economic historian Hans Jörgensen thoroughly describes the events leading up to the foundation of EEB in 1959. He ascribes the unique private-public cooperation that made EEB possible as a consequence of Swedish neutrality and corporatism.Footnote 33 Other scholars have acknowledged the existence of the bureau but have not given it any deeper attention or analyzed it in the greater Cold War context.Footnote 34 What has been lacking is a study that analyzes the role of the country’s most important business family in the establishment and development of EEB, especially after 1959 until it was turned into an academic institute thirty years later.
A recent book by Jan Leijonhielm gives an insider’s and practitioner’s perspective on the bureau. The Russian-speaking Leijonhielm first worked as assistant at EEB and was later recruited as an intelligence officer at the secret military intelligence agency Informationsbyrån. In 1981, he returned to EEB as director. He writes that EEB deserves more attention as an example of an unconventional and successful Swedish solution for analyzing Russian developments. Although the secret material available for EEB was not the main source it gave the analysis “an extra sharpness” and a competitive advantage for Swedish firms.Footnote 35
Sources and Method
This study is based on primary sources and follows standard historical method as explained by business scholar Matthias Kipping et al.Footnote 36 Source criticism is achieved by validation, establishing credibility and ensuring verifiability, and is complemented by the use of multiple sources, so-called triangulation. Through a hermeneutic approach the historical actors studied in this article, and the sources used to analyze them, are contextualized in their own time.
Records have mainly been collected at two archival institutions: the Swedish Military Archives (Krigsarkivet, KrA) and SEB’s archives. At Krigsarkivet, the archives belonging to EEB and Sweden’s spy-chief Thede Palm between 1945 and 1964 have been particularly useful. Intelligence historian Wilhelm Agrell has pointed out that access to records is a well-known problem in intelligence research, partly due to the secretive nature of these organizations. Much of the most interesting material does not make it into the archive at all.Footnote 37 This is only partly true for this study as both Palm and the director of EEB, Jan Rydström, wrote extensive diaries. The diaries give a unique insight into Swedish Cold War military and economic intelligence. Full of details about meetings, contemporary issues, what they thought of friends of foes alike, gossip, and private matters, the diaries are rare historical sources but should of course be considered as curated by these two men with the purpose of being read by future researchers. As Palm and Rydström also ended up in bitter feud in the latter half of the 1950s that lasted for the rest of their lives, their respective diaries should also be seen as ways of justifying their own behavior and discrediting the other. At SEB’s archives Marcus Wallenberg’s correspondence has been valuable as has the archive of SEB director Karl-Arvid Norlin who cooperated closely with Palm during his entire tenure.
Access to archival records becomes less rich after 1964 when Palm quit as spy-chief. We know that SEB remained house bank for Sweden’s military and economic intelligence agencies but Palm’s successor, Birger Elmér, did not keep a diary. When Elmérs organization Informationsbyrån was exposed in the media in 1973 he most likely destroyed its archives. However, he did make microfilm copies of his predecessor’s records, and these are available at Krigsarkivet.Footnote 38 Informationsbyrån’s successor organizations (the name has changed over the years and is now called Kontoret för särskild inhämtning—The Office for Special Acquisition) archives are—if they exist—not available for research.
Other archives containing material relating to EBB have turned out to be rather disappointing. Records from two of the founding banks, Svenska Handelsbanken and Skandinaviska Banken at the Center for Business History in Stockholm contained little of interest, as did Erik Dahmén’s archive at the Stockholm School of Economics. Lastly, I have interviewed intelligence officer Jan Leijonhielm, assistant at the EEB 1965-1970 and director 1981-1989.
The Firm and Its Bank
Sweden organized its military intelligence during World War II in a secret organization called C-byrån (the C-bureau, where the C referred to “central”). After the war, Swedish newspapers reported that C-bureau operatives had pocketed money by selling machine guns from Finland to Norwegian and Danish police troops trained in Sweden. It also turned out that the C-bureau had been involved in some less flattering cooperation with German authorities, especially during the war’s early phases. A restart was needed, and the government’s choice fell on the low-key C-bureau officer and former academic Thede Palm who had a clean sheet. As he put it in his memoirs, within the Defense Staff he was the “unknown librarian from Lund in charge of a department that did not exist.”Footnote 39 C-byrån changed name to T-kontoret (the T-office, where the T stood for “tekniska”) but just as with intelligence agencies abroad insiders such as Palm referred to it as “the Firm” (“firman”). The main task was to gather human intelligence in Sweden’s near abroad to assess military threats, something which was becoming more important as the country’s geostrategic position deteriorated during the first decade of the Cold War. Finland was independent but under Soviet influence through the 1948 “Friendship Agreement,” the Baltic States were no more, and Soviet troops were stationed in Poland and East Germany. When Denmark and Norway joined NATO in 1949 the idea of a Scandinavian defense union that the Swedes had wanted was abandoned.Footnote 40
Palm describes how accommodating Marcus Wallenberg was when they first met in the late 1940s:
SEB undertook to handle the Riksbank [Sweden’s central bank] and other things, if needed. I did not know Marcus Wallenberg when he met me the first time and I could understand if I seemed unfamiliar. To SEB I could not possibly send anyone else. He also arranged, without me asking, for a director to take me on whenever I wanted. I sometimes needed to see a CEO in some company – it could concern issues related to persons. It was then easy to get an appointment and a good result.Footnote 41
The director was Karl-Arvid Norlin, responsible for SEB’s contacts with the armed forces, and with a background in aviation and the air force.Footnote 42 He was also well connected with the US military, especially its air force, and later in life was awarded the Distinguished Service Medal—a decoration given to “to members of the United States Air Force who distinguished themselves by exceptionally meritorious service to the government in a duty of great responsibility, in combat or otherwise.”Footnote 43 He considered his line of work dangerous enough to sometimes walk around armed with a gun.Footnote 44
Palm first met with Norlin in February 1948. They agreed on how to cooperate (“it can be a good thing, if handled well”) and Palm also noted in his diary that Norlin was already working with the senior leadership at the Defense Staff.Footnote 45 As Table 1 shows, Norlin and Palm would meet almost 200 times until 1964 when Palm was replaced as spy-chief. The meetings usually took place at the bank but sometimes also at T-kontoret, at restaurants, or in private. Palm also met Marcus Wallenberg on occasion.
Thede Palm’s meetings with Karl-Arvid Norlin and Marcus Wallenberg 1948–1964
Palm also met Marc Wallenberg (Marcus Wallenberg’s son) once in 1962 and in 1963.
Source: Palm’s diary.
Norlin quickly gained Palm’s trust. At a dinner in Palm’s home in July 1949 they discussed “the position of the firm [i.e. Swedish intelligence] quite thoroughly.” Norlin argued that Palm should try to grow T-kontoret and get a bigger grant from the government and suggested a meeting with Marcus Wallenberg for further discussion.Footnote 46 When they met a few weeks later, Palm got the impression that Wallenberg tested him by asking various questions. The meeting went on for more than an hour past the appointed time, something which Palm considered a good sign.Footnote 47 According to Palm’s own account he was one of the few persons who talked back to the imposing Wallenberg, recalling a dinner organized by the Commander-in-Chief Nils Swedlund:
One gets the impression that everyone listened somewhat reverent when Wallenberg told the simplest story, and it was with some atmosphere of horror that they heard me answer back on one occasion.Footnote 48
His overall impression of Marcus Wallenberg was good, and he concluded in April 1950 that he was “making progress in the relationship with Enskilda Banken.”Footnote 49 A concrete thing that SEB helped with was the T-office’s access to foreign exchange. The bank notified the Riksbank which in turn arranged with a clerk that made sure that Palm got the currency he needed.Footnote 50 This was at least true for Western currencies. Russian rubles were harder to come by and had to be acquired through the black market in Helsinki.Footnote 51
The Wallenbergs were also large owners in the Scandinavian airline company SAS and Palm was eager to use the company for acquiring information from abroad. If war broke out, he also wanted to have an established relationship. Norlin, whose brother Per (“Pelle”) was CEO of SAS, put Palm in contact with the company which agreed to relay information about the Soviet satellite states, to warn if anything special was happening at airports around the world, and to have SAS staff pass on interesting information to the T-office.Footnote 52 The cooperation seems not to have run as smooth as Palm had wanted, however, and therefore followed up with a request to have specific contact man at Stockholm’s Bromma airport.Footnote 53
With Norlin and Wallenberg on his side Palm had powerful allies that proved useful in many ways. For example, in 1954 Norlin suggested to the Commander-in-Chief that the T-office and Swedish signals intelligence (the National Defence Radio Establishment, Försvarets radioanstalt) should be merged with Palm as director. This never happened but indicates the trust that the Wallenbergs had in Palm.Footnote 54
Financial Contributions
In the late 1940s and early 1950s the T-office recruited agents among Balts that had fled to Sweden and gave them training in weapons handling, radio transmission (the transponders were provided by Palm’s CIA-contact in Stockholm), and coding. The equipment included German weapons and suicide pills. The agents were then infiltrated back into the Baltic states using fast boats, in some instances in collaboration with the British secret intelligence service MI6 as part of its larger “Operation Jungle,” where they were to send information on Soviet military activity back to the T-office. What was not known then but became painstakingly clear after the Soviets exposed the operations in 1957 through an official note to Sweden and by publishing news stories about the agents in Russian media was that the KGB most likely knew about many, if not all, of the expeditions through their own spies among the Baltic diaspora in Stockholm. Most of the agents were likely captured or killed as soon as they landed.Footnote 55
Palm kept Norlin informed about the Baltic agents and Marcus Wallenberg showed great interest and expressed his willingness to help.Footnote 56 On September 3, 1951, Palm told Norlin that “Operation Erik” (where Erik stood for Estonia) had been successful and a week later Norlin reported back that his boss “has an active interest in that these kinds of things get done.” Palm noted that he should not have any difficulties in making another expedition, with which he meant that Marcus Wallenberg was willing to assist financially.Footnote 57 Norlin’s message was reiterated the following year:
I [Palm] thanked him [Norlin] for his offer of a contribution, and we agreed to have it paid out no later than June 15. However, I told him that I had brought up the entire matter at my office and shared with him the memorandum on the Baltic issue that had been prepared there. I said that I didn’t want him to have any misconceptions about how the money might potentially be used. He, however, wanted me to conduct an entirely different investigation. According to him, there are several options. The first is that we continue on our own. The second is that we more or less align ourselves with others, and the third is that we not only continue on our own but also penetrate further into the country. He believed that we cannot forgo the first option, as it is connected to our own sovereignty. The third option, he wanted me to assess. In his opinion, I should not shy away from six-figure sums.Footnote 58
Norlin is pushing not only for the operation to continue but also to investigate the possibility of sending agents deeper into the Soviet Union than just the Baltic states and for this the Wallenbergs would be willing to pay “six-figure sums,” i.e., over a million Swedish crowns. In current money value this equals around 18.7 million crowns or 1.7 million euros, a very large sum by any standards in 1950s Sweden. Whether or not amounts like that were paid out is not clear (the T-office’s accounts were, unlike other units in the Defense Staff, burnt after a yearly revision by the Commander-in-Chief), but the quote above shows that financial contributions were given by the bank to the T-office.Footnote 59
In intelligence circles it was known that the bank was financing Palm’s activities. Jan Rydström writes in his diary that economist Torsten Gårdlund had told him in 1955 that Wallenberg and Palm were close and that Enskilda Banken would be “ready to throw in hundred thousand from time to time to get the information they need.”Footnote 60 In early 1964, Rydström wrote in his diary about gossip he heard from Palm’s soon-to-be successor, Birger Elmér, regarding the Wallenbergs’ influence on Swedish military authorities:
Elmér said that Norlin was in and out of the Defense Staff and fit in perfectly there. The Staff received a lot of information from him via Washington, and they were very pleased about this. On the other hand, they gave Enskilda Banken all the information about the armed forces orders and planned new projects regarding weapons and equipment. “Enskilda Banken is Swedish defense,” he said. “The government and the Wallenberg family support each other, so what can one do? There is no force in Sweden that can change this at the moment. It is an open secret in informed circles that the government and the Wallenbergs meet at least once a month for more serious discussions about how they want things to be and to sort things out together.”Footnote 61
Rydström then continued to reason in the same diary entry about how big business and the government also sidestepped parliament more openly by fraternizing with each other at the Prime Minister’s estate, Harpsund.
Others were also skeptical of Norlin’s close involvement with Swedish intelligence. Holger Henning, head of intelligence (Sektion II) at the Defense Staff, privately called him “the intelligence service’s problem child” (underrättelsetjänstens problembarn) in conversations with Palm. Palm did not tell Norlin this but advised him to stay clear of Henning and instead go directly to the Commander-in-Chief or the Head of the Defense Staff if he had issues to discuss.Footnote 62
Networking and Information Sharing
Karl-Arvid Norlin and Marcus Wallenberg had contacts with the top military establishment in both Washington, D.C., and at the American Wiesbaden military base in West Germany that played a significant strategic and operational role for the United States and NATO during the Cold War. Among other things it was used for the Berlin Airlift in 1948–1949 and as an intelligence hub.Footnote 63 Norlin travelled regularly to both places and met Palm before and after his trips to discuss what to bring up with the Americans and report back.Footnote 64 Norlin was not the only Swede with military connections that went to Wiesbaden and he and Palm agreed that there ought to be better control over the many Swedish officers who went there “to get information and soon will be treading on each other’s toes,” a quote that illustrates the deep connections between supposedly neutral Sweden and NATO.Footnote 65
The information sharing was not one-sided. Palm would also brief Norlin about his trips who would pass on the information about these “valuable visits” to Marcus Wallenberg.Footnote 66 In 1959, Palm was under the impression that SEB’s rival Svenska Handelsbanken was about to offer him a job. Norlin then wrote to his boss that “P. has his greatest value in the position he has now [and] at the same time it is of course undesirable that he goes to Handelsbanken.”Footnote 67
Palm was very impressed with how informed Norlin was: “God knows where he gets everything from.”Footnote 68 For example, in 1950 Palm got information that the Americans would not sell radar equipment to Sweden due to the war in Korea.Footnote 69 In 1957, Norlin reported back to Palm (what in hindsight must be regarded as extraordinary information) that Sweden was likely to receive nuclear weapons from the United States the following year:
The trip has gone well. Setbacks must be allowed to happen, and we still haven’t received any atomic bombs, suspension devices, or rockets. But we had been assured that we would get them at the same time as NATO, which could mean next year.Footnote 70
It is difficult to assess how realistic these plans were as Sweden shortly thereafter decided to not acquire nuclear weapons. In April 1959 Palm had dinner with the commander-in-chief and Norlin, and Palm noted in his diary that there would be no Swedish nuclear weapons with the social democrat Östen Undén as Foreign Minister.Footnote 71
Norlin was a friend of General Millard Lewis, Director of Intelligence for the joint U.S. European Command and the highest-ranking intelligence officer in the US Air Force, and introduced Lewis and other senior officials to Palm.Footnote 72 Palm understood the value of these connections. This was especially apparent during the 1956 Hungarian Uprising:
I should have had dinner with Karl Arvid, but he called and explained that he had been sent to Wiesbaden. I was pretty upset as such a trump card as he is should not be played unnecessarily. To coordinate somewhat I decided however to send Lindberg [Palm’s number two at the T-office] to Munich.Footnote 73
Norlin called Palm the following day and reported that “he had gotten the ten divisions increased to 14 in addition to a big wish from the American side to deploy the strategic bomb command.”Footnote 74 It is not clear who had sent Norlin to Germany, but it was most likely Marcus Wallenberg. It is also difficult to know if Norlin’s influence in Wiesbaden was such that he actually managed to get the Americans to both put another four divisions and the US strategic bomb command on alert or if he was exaggerating to Palm. If he was, Palm did not note it in the diary.
Palm was also introduced to the Wallenberg contacts in the United States. For example, before Palm’s trip there in 1951 he had “a long conversation with M.W., who gave me advise on the persons I was to meet. He also promised to help me if needed, if I wrote in time from Washington.”Footnote 75 Palm also sat down with Wallenberg for long talks on negotiation strategy. His main take away from these discussions, which he found very useful, was to never decide beforehand to come home with a good result. One should always be ready to walk away from the negotiation table.Footnote 76
In 1955, Palm, Norlin, and the Commander-in-Chief, Nils Swedlund, made a four-week-long journey together to visit military establishments, arms producers, and hold meetings with senior-ranking military and intelligence officials, including the Deputy Secretary of Defense.Footnote 77 For Palm, the most important of these contacts was Allen Dulles, Director of the CIA between 1951 and 1963, and brother to President Eisenhower’s Secretary of State John Foster Dulles between 1953 and 1959. The Dulles brothers had long careers within public service and as lawyers at the New York law firm Sullivan & Cromwell they had also functioned as legal advisors to the Wallenberg’s American businesses, which included handling of the complicated and sensitive Bosch-affair.Footnote 78 Allen Dulles and Marcus Wallenberg became friends, corresponded regularly, and met on occasion in both Sweden and the United States during Dulles’ tenure as CIA director. On several occasions, Wallenberg helped get Swedish scientists, military chiefs, and businessmen access to Dulles who in turn made sure that his friend had direct contact with the CIA in Stockholm.Footnote 79 In 1960 Dulles wrote Wallenberg to tell him that there would be a change of personnel at the embassy in Stockholm and that the new CIA representative, Jack Kaufman, “is a man of wide experience and complete discretion and if at any time there is any word that you might wish to pass to me, you could safely entrust him.”Footnote 80
Like Palm, Allen Dulles was the first civilian in charge of his country’s spy-organization and over the years they met several times. During Dulles visit to Stockholm in 1958 he had a joint meeting with Palm and Norlin.Footnote 81 Palm was also appreciative of the visits to Washington and that he “if necessary could reach you and ask for advise.”Footnote 82
What Palm mainly could offer Dulles (and other Western services) was maritime intelligence on Soviet naval vessels and ports, but their discussions covered many topics, including the Baltic operations and how the T-office could help the CIA get information about China through Swedish businessmen. The CIA also provided Palm with radio transmission crystals to be used for direct communication with Dulles if war broke out.Footnote 83 Norlin reported back that Dulles had praised Palm in conversations with Marcus Wallenberg.Footnote 84
There is no doubt that Palm valued his relationship with Marcus Wallenberg. When Wallenberg stepped down as SEB’s CEO in 1958 and his son Marc took over, Palm wrote to him that:
In connection with your departure, I would like to thank you for what you have done for my firm during your time as managing director at the bank! I am glad that you are staying on, even if in a different position, and I hope that I will still be able to speak with you now and then about one thing or another. I do not know your son, but someday, if the opportunity arises, I would very much like to meet him.Footnote 85
Wallenberg replied the next day and made sure to communicate that his interest in Palm’s work remained unchanged
Heartfelt thanks for your kindness in writing to me in connection with my departure from the CEO position. My interest remains unchanged, no matter what position I hold. My son and I hope that you will come and have lunch with us some day at the bank.Footnote 86
They continued to be in contact after Palm had retired from T-kontoret in 1964. Palm wrote to Wallenberg to ask for donations to various conservative media projects that he was involved in and then took the opportunity to thank for the cooperation they once had: “I would also have liked to thank you in person for the trust you showed me over the years; but it is difficult to put into words.”Footnote 87
Organizing Economic Intelligence
The Wallenbergs, SEB, and the family-controlled companies also played a key role in the development of Swedish economic intelligence. In the same way as American and British intelligence services, the C-bureau began to analyze the warring countries’ economic ability during World War II by using domestic expertise, forming Industriutredningen (the Industrial Committee) in April 1943, renamed after the war as Ekonomiska utredningen (the Economic Committee).Footnote 88 Ekonomiska utredningen functioned as a network held together by a committee secretary. From 1953 this was Jan Rydström’s job. He had served as an intelligence officer for C-byrån during the war and according to his diary he had never left the intelligence service after becoming employed in 1941, although he had at times held other jobs.Footnote 89 Rydström wanted the Committee to remain close to business and instead of being placed within the Defense Staff, to which the T-office belonged, he established his office at Jernkontoret, the Swedish Iron and Steel Producers’ Association, which functioned as cover organization.Footnote 90
Rydström’s unit was called Detalj II, to separate it from the rest of the T-office, known as Detalj I. Detalj II’s task was to “supply the leadership of the Defense Staff with economic material as a basis for its strategic assessments [---] the ultimate aim for the detail is to give summaries and overall assessment on issues related to war potential.” Among the issues to report on were raw materials, transports, processing, finance and trade, technical research, and demographics and manpower and its relation to consumption.Footnote 91 The unit had access to open and clandestine sources, the latter consisting mainly of foreign intelligence services’ reports.Footnote 92
In the mid-1950s, Rydström and Palm ended up in a bitter conflict over how to organize the economic intelligence. Rydström had misgivings about how Palm ran the T-office, especially regarding hiring practices, and wanted to deepen the cooperation with business.Footnote 93 By including business in monitoring economic developments in the East both the military and the companies would gain. In practice, this would be a way of formalizing the cooperation that had been in place since the war and to make sure that intelligence material that could be useful for business did not “lie idle” in the archives.Footnote 94 Through his good connections with Birger Elmér, Rydström got to meet both the Defense Minister and later also the Prime Minister to air his criticism of Palm.Footnote 95 Palm considered Rydström disloyal and was afraid that the corporate partners could start making demands that would tie down the intelligence service.Footnote 96
Erik Dahmén, a friend of Rydström’s, member of the Economic Committee, and professor at the Stockholm School of Economics, also worked as advisor to Marcus Wallenberg and SEB. When Dahmén presented the idea of a closer cooperation between business and the Defense Staff to Marcus Wallenberg, he immediately guaranteed 30,000 SEK where the bank would pay 10,000 and the rest would come from the family-controlled firms ASEA, Atlas Copco, Kopparbergs, and Scania Vabis.Footnote 97
To Curt Göransson, head of the Defense Staff, Rydström stressed the total defense aspects of why cooperating with business would ensure better economic intelligence and benefit the country at large. Sharing information was not to make
individual companies become fatter and richer by being able to exploit this material in their business policies. Rather, it is done for the country. It is done for the companies as an essential and integrated part of our economic potential, our war potential, and our military readiness. It is done so that these important parts of our readiness and defense will, to some extent, become familiar with the fundamentally defense-political issues that are reflected in the economic intelligence material. The individuals within the companies with whom we will have contact should be trained to open their eyes and, from a defense-policy perspective, be able to assess what they see and hear in these respects. In other words, they should be trained to become a subsidiary economic intelligence unit – all while they themselves bear the cost of it. It won’t succeed with everyone. But if we can succeed with ¼, much will have been gained from it.Footnote 98
Rydström finally had his way and in 1960 the East Economic Bureau got started. By then Palm was so tired of Rydström that he was pleased to get rid of him, although this meant less control over the economic intelligence.Footnote 99
EEB was organized in the form of a foundation (Stiftelsen för utredningar rörande öst-väst frågor) with financial support from the three big banks and some larger exporting firms. Of the banks it was SEB that took the lead by handling the accounts.Footnote 100 Erik Dahmén was appointed as liaison between T-office, the Defense Staff, and the new organization to make sure that the cooperation ran smoothly.Footnote 101 Rydström would later praise Dahmén for his role in getting EEB started, especially in relation to the Wallenbergs and their bank:
Professor Erik Dahmén was also strongly active in anchoring the bureau’s operations within the business community, in which his position as an economic advisor at what was then Stockholms Enskilda Bank and his close personal connection with Dr. Marcus Wallenberg played a major role.Footnote 102
By the last of January 1960, EEB had 19 subscribers (17 companies plus the Defense Staff and the Swedish Iron and Steel Association). As shown in Table 2, in nine of these the Wallenberg group had ownership stakes. In eight of the nine the group was either a sole majority owner or in majority together with one other owner. With Dahmén as the liaison to the military authorities and SEB as financial services provider, the Wallenbergs were the dominating private entity behind EEB.
EEB subscribers in the founding year 1960
Source: Kassabok 1960–1962, G1:1, ÖEB:s arkiv, KrA. For Wallenberg ownership, see Olsson, Bank, familj och företagande, 232.
The subscribing organizations were to treat all material from the bureau as confidential and appoint a “contact man” with which EEB communicated.Footnote 103 To compile the reports, EEB had had access to five types of sources: 1) public records and publications, 2) less accessible material of the “confidential type,” 3) reports from the Ministry of Foreign Affairs, 4) secret but already processed material from abroad, and 5) secret reports from spies and the like. The first type was by far the most important; when Rydström was questioned by the Defense Committee in parliament in 1973 he said that around 90 percent of the information came from open sources in the Eastern bloc.Footnote 104
Rydström’s organization produced around 20 reports per year. The first five were titled The Eastern Bloc’s Economic Offensive, Finland’s Economic Relations with the Soviet Union, Memo Regarding the Czechoslovakian Perspective Plan (1961-1975), Memo Regarding Rumor About the Soviet Union Converting to Gold Standard. Footnote 105 For Swedish exporting firms the reports gave specific information on, e.g., to what extent Soviet products such as oil, steel, and timber would be available on the world markets. The information supposedly proved useful in trade negotiations with Eastern states.Footnote 106 Figure 1 shows an excerpt from a report about Soviet oil pipelines detailing existing and planned pipelines and refineries.
Excerpt from the report Oljeledningar i Sovjet (Oil Pipelines in the Soviet Union), 1960.
Source: Direktionens dossier, serie III, F1C, 3803, Öst Ekonomiska Byrån, SEB.
Palm’s Exit
The government replaced Palm with Birger Elmér in 1964. Palm attributed this to politics—a new generation of politicians and senior military commanders wanted to get rid of the conservative spy-chief who had served for 19 years. There were other reasons too including the scandal surrounding Air Force Colonel Stig Wennerström who had supplied the Russians with thousands of classified documents (he had no direct connections to Palm, but it gave the Soviets insight into Sweden’s cooperation with NATO and increased the government’s uneasiness about the Western connections). The same day as the Minister for Defense notified Palm about losing his job he met Karl-Arvid Norlin in the evening and “told him everything.”Footnote 107 Norlin, who very much had sided with Palm in the conflict with Rydström, did not have the same type of close connection to Elmér but continued to nurture his military contacts in Washington and Wiesbaden, including with General James Caroll, the first Director of the Defense Intelligence Agency (who thought highly of Swedish intelligence) and General Joseph Randall Holzapple, Commander-in-Chief for the US Air Force in Europe.Footnote 108 Norlin retired in 1975.Footnote 109
With Elmér in charge Swedish military intelligence got broader tasks than under Palm. Elmér had overseen the Defense Staff’s security service Group B which kept track of communists and communist sympathizers within industry and areas of military interest. In the early 1960s, it expanded to a more general defense of Swedish democracy against perceived communist threats. To collect intelligence, Group B worked with active Social Democrats that had good knowledge and experience of the unions. With the merger of the T-office and Group B in 1965, foreign intelligence and domestic security were consolidated in one organization, IB (Informationsbyrån).Footnote 110
At Elmérs initiative, he, Rydström, and Dahmén bought a property at Drakens gränd 1 in Stockholm’s old town in 1967. The apartments were divided between EEB, the Dahmén family, and Birger Elmér.Footnote 111 SEB remained IB’s house bank. The two organizations also had a joint account at the bankFootnote 112 and SEB accounts were also used to pay sources abroad,Footnote 113 labelled in EEB’s records as “special subscriptions.”Footnote 114 Money was also sent from IB to EEB for when Rydström or his staff had travelled abroad working with reports that were of use for IBFootnote 115 and to pay for Elmér’s apartments at Drakens Gränd.Footnote 116
EEB kept growing. In 1970, there were 28 paying members which now included, e.g., several military agencies and the Employers’ Confederation.Footnote 117 Over the years the secrecy became less strict. It now had its own sign on the door and when Rydström traveled abroad he did so as EEB’s director.Footnote 118 Its name was in the press when foreign dignitaries gave talks at the annual meeting, including former Minister for Defense in the UK, Dennis Healy, Austrian former Federal Chancellor Bruno Kreisky, and former French Prime Minster, Maurice Couve de Murville.Footnote 119
Wallenberg’s Commitment to the East Economic Bureau
In 1973, the leftist magazine Folket i Bild/Kulturfront published one of the largest scoops in Swedish history when it exposed IB. A secret military intelligence service that had spies abroad and at home, broke into foreign embassies and leftist organizations, cooperated closely with Western and Israeli intelligence, and kept unlawful registers over thousands of Swedish communists did not rime well with the official policy of neutrality.Footnote 120 The source was an insider named Håkan Isacson who had worked for both EEB and IB. One of his many claims (which seems credible given intelligence services’ use of corporate camouflage to retrieve information) regarding his former employers was that IB had informants at every large Swedish firm that wrote reports on trips abroad.Footnote 121 The articles were highly critical of the close connections between Swedish business and military intelligence:
The military and the industry often have the same goals: the Defense Staff wants, for example, knowledge about suitable Soviet bomb targets and the industry wants knowledge that can serve as basis for doing business with the Soviet Union – then the parties share the spies.Footnote 122
Rydström was called to a closed-door hearing with the Defense Committee in parliament in November, where he was asked about EEB’s relation to IB. The committee published its conclusions about Swedish military intelligence in a report that stated that EEB “occupies a unique position among the agencies involved in intelligence operations. It is run by the state and Swedish industry.” The formal ties to the defense should be cut:
The committee believes that the activities of EEB are not primarily a defense interest. Therefore, the special expertise that the bureau represents should not receive government support that implies an organizational connection to the defense.Footnote 123
In practice, this meant that Rydström’s formal position was transferred from the Defense Staff to the National Board of Trade (Kommerskollegium).
Despite the turmoil, EEB received backing from its subscribers including, most importantly, Marcus Wallenberg, who agreed to support higher subscription fees as Rydström feared that there would be less funds coming from Swedish defense after the negative press.Footnote 124 Erik Dahmén also spoke to Wallenberg about the EEB’s role in the IB-affair, to which Wallenberg supposedly replied that “it will not affect our companies’ attitude the least.” He also said that “I can’t care less, and the Russians will not react either.”Footnote 125 Other subscribers also expressed their satisfaction with the EEB’s reports and agreed to an increase in the fee.Footnote 126
The 1979 Government Inquiry
In 1978, the Government decided to make a new inquiry into the future of EEB which then had 25 commercial and six government agencies as subscribers.Footnote 127 The inquiry noted that the subscribes were satisfied with EEB’s reporting. The government agencies, including Swedish embassies in the Eastern bloc, considered the reports to “fill their needs and their high demand for reliability and information value.”Footnote 128
The reports were also relevant for the military authorities. In a secret memo to the inquiry committee, the Commander-in-Chief certified that he was very positive. Similar information was given by senior colonel Bengt Wallroth at the Defense Staff, who stressed how the reports were used to trade information with other intelligence agencies: “apart from the significance that ÖEB has for the Defense Staff’s monitoring of military economic conditions in the near abroad, its products hold a certain direct value as exchange items.”Footnote 129
Commercial subscribers were also positive; the reports gave them an overall economic assessment and occasionally also aspects on e.g., competition conditions, technological development, and countries’ credit standing. However, it was rare that the reports led to direct business deals. Some firms considered their subscriptions more as a way of supporting a vital national interest rather than something that would give them a commercial advantage.
The inquiry concluded that EEB filled Sweden’s need for economic information about the state trading countries (statshandelsländerna) at a low cost and functioned as an educational facility for young academics with an interest in Eastern economic issues. Still, it could not be denied that the organization’s judicial forms were somewhat “peculiar” (egenartade) and the following year a new agreement was struck that gave the state more influence over EEB’s governance.Footnote 130
Remodeling EEB
After the exposure in 1973, Elmér was replaced and IB reorganized as Gemensamma Byrån för Underrättelser (Joint Intelligence Agency, GBU). When Rydström stepped down as director of EEB in 1981 he was replaced by GBU operative Jan Leijonhielm who had also served at IB and EEB. Leijonhielm thought that his predecessor had done a good job in getting senior representatives from business, state, and academia to join the board. Being a board member was both prestigious and gave access to a unique network in business, politics, and defense (see Appendix 1). Having both the Wallenberg and Johnson business groups represented on the board was useful.Footnote 131
In the latter half of the 1980s the EEB board wanted to deepen the capacity for analysis while military information became less interesting and decided to remodel EEB as an academic institute at the Stockholm School of Economics with which had long ties.Footnote 132 A reorganized EEB would be able to expand by receiving more funding from both the state and businesses. The School’s President and EEB board member, Staffan Burenstam-Linder, also stressed that the economic and political development in the East demanded more expertise and greater cooperation with universities. On June 30, 1989, the old foundation was dissolved and a new one—Östekonomiska Institutet—was established with Professor Anders Åslund in charge.Footnote 133 Today, it lives on as the Stockholm Institute of Transitional Economics (SITE). Just as in 1960, SEB is one of the companies that provides funding and holds a board position.Footnote 134
Conclusion
The aim of this article has been to increase our understanding of how the Wallenberg family’s exceptional position in Sweden’s neutrality-industrial complex (NIC) made it a vital partner to the intelligence community during the Cold War. This concluding section will discuss both business- and nonbusiness-related reasons behind this cooperation while acknowledging that, whereas the archival material used for this study gives ample evidence of the how, it is more silent on why. There are (at least not that I have found) no records of, e.g., the family patriarch Marcus Wallenberg explaining his willingness to letting the intelligence agency use the family bank SEB for financial transactions or provide the same agency with money, contacts, and negotiation tactics. This concluding discussion is therefore an interpretive analysis of the empirical section seen through the lens of the family’s position within the neutrality-industrial complex.
The NIC as a Response to Soviet Military Threats
All of the theories on the emergence and development of military-industrial complexes discussed earlier in the article can be used to understand how and why the Wallenberg family’s position in the Swedish NIC made it a vital partner to the intelligence community. I argue, however, that the so-called Resource Mobilization Model fits this case the best. Ideologically, this model is underpinned by ideas of arms industrial self-reliance for quick war time mobilization. The MIC thus develops as an institutional answer to national security issues and military threats. The Swedish NIC was established during World War II and then matured during the Cold War, made possible by a shared corporatist understanding among the country’s political, military, and business elites that a strong Swedish defense with a domestic capacity for both mass production but also advanced weapon systems was the best deterrent against Soviet military threats and if an actual war broke out. For the Wallenbergs, the most important private business group in the NIC, cooperating with the military authorities was a way of leveraging informational power in a way that could be beneficial for both national security and the business group’s strategic positioning.
Business-Related Reasons
When World War II ended Sweden had already been nonaligned for almost 150 years. As earlier research as pointed out, the price of a credible neutrality was a strong defense that would deter potential aggressors. Advanced military systems were developed by the state and the private arms industry in tandem; long-term contracts guaranteed profit and in practice monopolistic production. In this golden era of corporatism, where cooperation between organized business and the state went far beyond arms production, it was the Wallenbergs who dominated industry. In the early 1970s, family-controlled companies produced almost 40 per cent of the military equipment delivered to the Swedish armed forces. Many of the advanced weapon systems needed for the NIC also required technological cooperation with NATO countries. NATO cooperation was of course not in accordance with the neutrality policy and had to be conducted secretly. An important institution in this secret game was Sweden’s military intelligence service, the T-office, which collaborated with Western intelligence agencies. For SEB and the Wallenberg group, having a good working relation with the T-office and its director Thede Palm was a way to deepen its already good connections with the Western military establishment, especially in the United States. The family also provided Palm with important American contacts, such as the CIA director Allen Dulles, who had previously been the family lawyer in the United States. Also, the same was true domestically. As major suppliers to the Swedish military, the family was deeply connected to the Defense Staff, the Commander-in-Chief, and the government.
The point is, as economist George Stigler once pointed out, that knowledge is a form of power. For a business group centered around a bank and that was deeply integrated into the country’s military-industrial complex, being well-informed was an important part of the business model. Given how much information flowed between the bank and the military authorities, it is perhaps not strange that the spy-chief from 1964, Birger Elmér, supposedly stated that “Enskilda Banken is Swedish defense” and that in return for information from Washington the bank got information about planned orders to the armed forces and new weapons projects.
Both parties gained from this exchange. SEB and other Wallenberg-controlled companies could potentially use the information to make better business decisions while the intelligence service got better opportunities to assess military threats, partly by trading it with friendly services abroad.
Other Reasons
When the T-office infiltrated agents from the Baltic diaspora back to their native countries, Marcus Wallenberg was eager to help financially, guaranteeing large sums for the operations to proceed, in addition to the already existing donations to the T-office. It is hard to see any business-related reasons for the Wallenbergs to support operations like these. Rather, the support should be regarded in light of Marcus Wallenberg’s nationalism, anti-socialism (which however did not stop him from nurturing very good contacts with leading Swedish social democrats), and the type of democratic corporatism described by Katzenstein where elites share interpretations of the collective good—in this case the defense of Sweden. In letters to the T-office director Thede Palm, Marcus Wallenberg expressed a genuine interest in Palm’s work.
This article has also shown how the Wallenbergs in the early 1960s were key in the establishment of the East Economic Bureau (EEB), a semi-secret organization sprung out of the T-office for economic analysis of the Communist bloc. Wallenberg-controlled companies provided much of the funding, SEB handled the accounts, and Marcus Wallenberg’s advisor Professor Erik Dahmén at the Stockholm School of Economics functioned as liaison between business, academia, and the military authorities. EEB provided a network opportunity for the Swedish business elite, but it is hard to argue, based on the 1979 government inquiry of EEB, that its reports had any major commercial value for Swedish firms. Instead, business involvement should be attributed to a wider corporatist support of Sweden’s total defense.
Lastly, a potential reason to assist the Swedish intelligence service with contacts, especially in the United States, could be to convince American defense and military authorities of the family’s commitment to Western strategic interests after the soiled Bosch affair. Although the business embargo against the Wallenberg brothers had been lifted in 1947, a final settlement with the US authorities was not reached until 1950.
An open question for future research is whether other neutral countries—such as Finland, Austria, and Switzerland—had private business groups with ties to the military establishment, including intelligence agencies, comparable to those of the Wallenbergs, or whether Sweden was unique in this regard.
Appendix 1: EEB board members 1959–1989
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