00 – A western company doing business in East Germany

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Account donated by Giorgio Tassi
 

(1)When I was 12 years old

I was 12 years old in 1956 when the revolution in Hungary took place in September.

The Hungarians wanted to be free from Soviet domination. At that time – no television yet – we would listen to the radio for the news.
We were hearing of the insurgents winning ground and control of the streets in Budapest. The Hungarian Radio would start broadcasting their declarations and we were cheering for
them.

Then, all of a sudden, the Russian tanks surrounded Budapest and progressively re-conquered the lost ground and control, until they got closer and closer to the town center and the Radio
building in Budapest. In those days I was listening to the announcements of the Hungarian insurgents asking for
help from the West. I remember distinctly when the speaker announced that, in absence of any help from the West, that would be the last speech from Free Budapest and that the Radio
building would have been taken over by the Russians. Then silence.

As a young boy, I was in despair, wondering why no help had been given by “the West” to the Hungarians. And why the Russians wanted to have full control of another Country, not
belonging to Russia. I can date my political orientation exactly to that November 1956 and its events, that would
give way to my care for freedom, for the respect of the political ideas of the others, for the
rejection of totalitarianism.

My interest in the Eastern European Countries has grown thanks to a combination of factors. Here an important person comes into play: my uncle. My father’s brother has been a fascinating person: with three university degrees in different areas of chemistry, a good sense for business and a stubborn bachelor, he has been responsible for the R&D of a large paper mill that wanted to diversify their production into technical applications of paper. For this objective, my uncle has been traveling veryintensively in the States and in Europe, to study the existing technical paper products and to bring back ideas and technologies for the development of new products. He has been very successful in his researches and the paper mill could launch many technical products for the furniture and automotive industries, that my uncle would present to the potential clients from a technical and application viewpoint. I remember him saying “In my job, I do not sell
anything, but the clients buy”.

In fact, let’s go back with our imagination to Europe in the ‘50s and ‘60s: the destruction from the war, the need to rebuild, the requirements of the families and the industries, etc. This was
particularly felt in Eastern Europe, that, due to the political constraints, was so late in the after-war reconstruction. And my uncle was bringing them new technologies and teaching them how to make use of these new products. He would be treated like a sultan by the importing Ministries, welcome in any place, respected and listened to anywhere. He has been traveling very frequently in all Eastern European Countries in those years, and he would send us postcards from his trips, without knowing how these postcards would influence my later interests and decisions.

I remember these postcards, all of them with “Greetings from….” And the place would be Budapest, or Sofia, Moscow, Prague, Warsaw… I remember the fascination that was imprinted in me by these postcards, that were showing me places so distant and mysterious….and dangerous.

Just a few years later the first books from Ian Fleming would be published and I would read them avidly, one after the other, most of them in English, to participate the adventures of this fascinating protagonist. In short, these Countries were attracting me by a mixture of mystery, danger, sympathy, hatred. These feelings and interest drove me instinctively and unconsciously to look for jobs that would give the opportunity to travel to these Countries and satisfy my curiosities, to learn more about the living conditions of these people and their political situation.

(2) My First travels in Eastern Europe in 1975

I started traveling intensively in Eastern Europe back in 1975. At that time I was the export manager of an Italian factory producing packaging materials. I was reporting to the Sales and Marketing Director (Alex) that strongly influenced my later career.

A very nice gentleman, born in Sarajevo, coming from a high class and rich family, owners of a sawmill, Alex could speak 6-7 Slavic languages quite fluently, plus a perfect English and French, due to his father being the Commercial Attaché to the Yugoslav Embassies in London and Brussels when he was a student. Alex would travel very easily and transmitted his work style to me.

The first assignment that he gave me was to explore the business possibility in Hungary. At long last, I could visit Budapest and visit the places that I had heard of in my childhood, during the Hungarian Revolution of 1956. What I found was a grey and dull town, divided by the Danube river in two parts, Buda on the hillside and Pest on the other, flat side, where the town extended into the industrial areas. I had my first impact with the passport controls that were typical of these Countries: a long, time-consuming exercise that ended with the release of a visa stamped on your passport (one page each time…), to be re-stamped and terminated when exiting from the Country. During that process, one should sit and wait, with no way to speed up the process. After that, the
luggage control.

I rapidly learned that, in those days and in those Countries, time was an independent factor that had nothing to do with your schedules and urgencies. I learned also that the Ministries would accept to meet the foreign businessmen only in the morning, and please after 10. It would have been impolite to ask for an earlier meeting. If one did not finish within the given morning, another meeting would be arranged for the morning after, and so on.

At that time phoning to the West (and from the West to East Europe) would be virtually impossible, due to the length of the phone call booking process. I learned later that most of this time was needed to arrange somebody who could listen to the conversation and tape it if of some political interest. Communications took place by letter or by telex. (Only a few currently know what a telex machine is… I spare you with the description of a telex, unless this has triggered your curiosity).

Therefore the typical trip to Hungary in the 2nd half of the ‘70s was to use day 1 for traveling and visa, day 2 (and maybe day 3) for the meetings in the morning, with frustrating attempts to phone to the West in the afternoon to discuss the issues with the Head Office, and day 4 to fly back home. Four days for a meeting, often to hear that somebody else has undercut your price to an impossible level, or that for that quarter there was no hard currency available for imports. On the other hand, those markets needed everything and were interesting places where to dump the production capacity excess (that was our case), and payments were guaranteed by the State if all the paperwork was done in the proper way.

The factory that I have been working for joined forces with other two Italian competitors and a sales consortium was created. I have been given the responsibility of the whole export, three times larger than before and with three times larger headaches about where to sell our capacity. This obliged me to travel more intensively, both in West and East Europe, while the three factories were becoming two only, and the outlook for these two was rather negative, due to environmental issues and competition from cheaper plastic materials.

In my desperate need to find additional markets for my products, I could not believe my ears when I heard that a businessman from East Germany wanted to meet me. I remember I wasin Stockholm at that time and, when I heard of this meeting possibility, I flew back in a hurryto ensure that I would be able to welcome this gentleman. This is how I got in touch with Klaus for the first time.

 

(3)Klaus

Klaus was a tall, big man, with piercing eyes aided by glasses. He spoke a dogmatic English with a very strong German accent, with no concession to any small talk. Quick and straight to
the point, he introduced himself as part of the Transinter GmbH, a State-owned company located in East Berlin established to facilitate (read: monitor and steer) the business and trading with the West.

Klaus wanted to explore the possibility for us to supply the GDR industries with some packaging materials, as replacement of the same materials currently delivered by the West German suppliers.
I agreed, of course, and we discussed how to proceed. I should attend the coming Leipzig Exhibition, where I would be given the opportunity to meet the importers of these materials.
Klaus gave me a crash course on how the business in GDR was handled.

In short:

  • – in a planned economy system as in force in GDR, the factories would have a 5-year plan to
    execute
  • – in order to execute their plan, the factories needed base and auxiliary materials for their
    activity, some of them coming from the West
  • – as regards the materials to be imported, on a yearly and quarterly basis the GDR factories
    would send their requirements to the State Foreign Trade Companies in charge of trading
    with those materials
  • – these State-owned Foreign Trade companies in charge of the relations with the Western
    suppliers (named “AHB” = Aussenhandlesbetriebe) would contact the potential suppliers, get
    their offers, qualify the materials and then they would proceed with the import of the
    required goods
  • – the major constraint would be the availability of hard currency to pay for the imported
    goods
  • – an alternative to payment in hard currency would be a barter, a solution that generally
    would prove more difficult to achieve than finding the D-Marks or US-dollars.

 

One of the main controls carried out by executives like Klaus was specifically to avoid that all the business went to West Germany, that was the natural, easiest solution of all the problem. Despite the official political adversity, the link between the two Germany’s has been always extremely strong. As regards the trade, between the two Germany’s there was a clearing agreement that would facilitate the supplies without requiring currency movements. This, plus the common language and basic culture and, most of all, the superiority complex of the West Germans vs. the inferiority complex of the East Germans made West Germany the natural supplier of all possible goods, much to the disappointment of the East German government that wanted to show as much distance as possible from the “enemy” behind the Iron Curtain.

In order to avoid an excess of dependence from West Germany and also to direct the trade according to the political decisions, the GDR government installed a system of companies, such as Transinter, to monitor and steer the import-export business executed by the Foreign Trade companies. Transinter would receive an official commission paid by the supplier, calculated on the
business volume achieved with their assistance. Executives like Klaus, featuring an exceptionally high degree of political reliability combined with an outstanding education and proven Party orthodoxy, were given the authority to step in any discussion, in any negotiation and in any decision to ensure the correct development of the business and its alignment to the government directives.

And Klaus would carry out his job of “commercial policeman” ruthlessly. I saw high ranking East German managers literally trembling and sweating for fear when Klaus stormed into a meeting room to check the update of the negotiations. Klaus had an encyclopaedic knowledge of many trades, one of which was the chemical industry. His specific task was to “help” the development of the chemical trade between GDR and Italy, resulting in a compensation room where the values of the exchanged goods would be calculated to reach an acceptable balance. A working group (Arbeitsgruppe) had been established between Italy and GDR for the chemical industry. One of the Italian chemical industries admitted to these negotiations with GDR was the owner of one of the factories forming a consortium for which I was working at that time as an export manager. Consequently (and by my sheer luck) our sales to East Germany would benefit from being part of this Arbeitsgruppe because, in case of orders, an import license would be granted automatically and without difficulties.

The first meeting with Klaus took place in 1979. I would attend the September Leipziger Messe (the traditional Leipzig Exhibition) where I
could meet the buyers of the Foreign Trade company in charge of importing our materials for
an official introduction leading to the qualification of our materials.

(4) First Visits to East Germany

I learned very quickly from Klaus how to avoid a number of diplomatic mistakes that would be typical of the beginners of the business with East Germany and would be unforgivable for those who wanted to establish good relations there.

First of all, I should avoid using the term “East Germany”: there were two exact German terms defining the two Germany’s: BRD and DDR, i.e. Bundesrepublik Deutschland and Deutsche Demokratische Republik. Equally, East Berlin should be called “Berlin”, since West Berlin, being an island of capitalism embedded in GDR, was considered a foreign body, an abuse to be ignored. As regards the currency, the term Mark would define the GDR Mark, whereas the D-Mark would relate to the West German Mark.

With these rules well in mind, I flew to Leipzig. On the occasion of the Exhibition the East German airline Interflug would arrange special flights to connect Milano with Leipzig. Klaus had booked a room for me in the Ring Hotel for two days. Everything was looking very normal: flights, hotels, meetings arranged..

And my adventure in GDR started. I got my visa stamped at the GDR border for a limited time and valid for the Leipzig area only. I learned that visitors’ visas were granted only for East Berlin when crossing CheckPoint Charlie and for the Leipzig Exhibition. No visitors visa were granted for any other entry point or occasion or area. Exceptions had to be officially agreed by a Foreign Trade company in the name of a given person that would be responsible for the correct behaviour of the visitor. I noticed that having a room in a hotel during the Leipzig Exhibition was a great privilege, due to the scarcity of hotel accommodations vs. the large amount of visitors. Probably Klaus had some plans for me and wanted to impress me with his power, by arranging visa and hotel and meetings that, without his intervention, would have been virtually impossible to obtain.

At that time my knowledge of German was minimal and the first meeting had been a little difficult. The people that I met, responsible for the import of our product category, would speak a little English and Klaus helped the conversation. The result of the meeting was the request of sample materials, the promise to test them and meet again at the next Leipzig Exhibition six months later.
I flew back from Leipzig with a vague hope for some business at an indefinite point of time in the future, but with many curiosities satisfied and a number of anecdotes regarding a seldom visited, secretive country that only a few non-Germans would approach.

The impression that I received in this first visit to Leipzig was of a well-organized Country, overloaded with rules, with a good standard of living. This is exactly what the East German government wanted the foreigners to believe. By scraping just a little under the surface, the real truth would soon appear. By introducing myself as an Italian, I would dissipate the diffidence that the East Germans would have when talking to an unknown person. In this way I could hear and learn many things that the ordinary visitor could not find out.

(5) Setting up the Mechanism

The consortium for which I was working as an export manager was having some difficulties: one
of the three factories composing our sales consortium had ceased production, because of
environmental problems too expensive to solve. And a second factory was running into the same
kind of troubles. Soon I would be an expensive manager for one factory only. Therefore I
decided to move to the next job. In my very early work years, I had been employed by a trading
company specialized in paper products and pulp, with a most considerable position in trading
with the Iron Curtain markets. However, this company, with which I had been maintaining good
personal contacts, had no relations with East Germany, which was judged “a market where it is
impossible to do business with”.
I favoured the contact between this company and Klaus, suggesting that he could help them in
opening some opportunities for trading with East Germany.
This trading company seemed interested in hiring me to manage a division dedicated to “new
products and new markets”, in order to diversify their activity. They offered me a good job and I
promptly accepted it.
When I started working for this trading company in early 1981, I brought as dowry my
knowledge and connections in the packaging sector, as well as my contact with East Germany. I
would be able to finance the activity of my division by increasing the sale of some other products
already existing in the company portfolio, which would become my responsibility for
development.
As my personal contribution to the business innovation in my new employer, I negotiated the
exclusive distribution rights of a range of plastic films produced by an American company who
was installing their production and sales offices in Europe.
I knew that the East European markets were not ready yet to use these sophisticated materials,
but time would come that these materials would be needed also in these markets and I wanted to
be ready for that moment.
The name of this American company was extremely well known all over the world. I sensed that
in Eastern Europe there would be a political resistance to contact this American company
directly. In the same way, this American company would not like to have direct official contacts
with “the Communists”. But both would have been interested in having an intermediate company
to facilitate the business.
Hence the agreement with us, welcomed by both parties.
This is an example of the service value that a trading company like my new employer had at those
times.
Generally the Western producers would first try to establish direct relations with the Eastern
European markets, but many of them would give up after a few trips, when confronted with the
difficulty of identifying the Ministry concerned, then by the extremely long negotiation and
qualification times without real business perspectives, then by the payments or barter
complications and many other discouraging factors. And consequently, they would welcome the
intervention of a trading company like ours to try and do business on their behalf in these
markets.
We had unique know-how, the knowledge of these markets and their complicated mechanism,
we knew which risks could be taken, the mistakes to avoid, how to survive and be successful in
those special, sensitive areas.
In addition to these qualities, we had the possibility to finance the sale of Western goods with the
import of Eastern goods that we could resell in the West. In most of the cases, if this was the

constraint to do business, virtually all possible direct suppliers would bow out. And we would
step in the circuit, take over the negotiation and facilitate the success of the operation. Against a
fee or a margin, of course.
An example of how the Iron Curtain was an excellent business opportunity for those who knew
how to exploit the weakness of the system?
We were in contact with a factory in Yugoslavia producing self-adhesive paper required for labels
printing. The moment came when this factory would need a large number of spare parts for their
German production equipment, but had no hard currency available for the payment of the spare
parts supply. They came to us offering a full truckload of self-adhesive paper in reels in exchange
for the supply of the spare parts. We checked the possibility of purchasing the parts from
Germany and to be able to sell the paper reels to some converters at acceptable conditions.
Then we proceeded with the deals. While the business was perfected, a Yugoslav printer, who
needed a self-adhesive paper supply for an export order that they had in negotiation, came to us
when they heard that we had a truckload of paper readily available. We agreed on the price and
sold the paper to them. The truck with the Yugoslav paper reels came in through the Italian-
Yugoslav border, drove to the first roundabout in Trieste and went back to the Yugoslav printer
with a new set of documents. Everything absolutely legal. As a result of this operation, the paper
mill had their spare parts, the printer received the paper supply, we made a reasonable margin
from each step of the transaction. It may sound crazy, but this was the system at that time, with
its weaknesses and complications that made the fortunes of those who knew how to exploit
them.
The most obvious solution (A talking to B, all within the same territory) would be ruled out by a
screen of diffidence, bad communications system, rules complexity and other local factors that
made the collaboration with an external party preferable.
In the case of East Germany, all these complications and constraints would be increased tenfold
and would discourage most potential foreign suppliers.
I mentioned earlier that Klaus ensured that our company would be officially recorded among the
participants of the Work Group (Arbeitgruppe) Italy-DDR for the chemical sector. Surely, despite
my initial firm declaration that I was not member of, or had no special sympathy for, the
Communist Party, a thorough check of myself and of my family had been carried out and I came
out with good marks in terms of integrity and reliability, to the effect that I would be the person
responsible to take part to the meetings and activities of this Group, formed by the managers of
the Italian giants in the chemical sectors and the correspondent managers of the East German
chemical industry. I was given the responsibility of the Auxiliary Products (Hilfsmittel). The
beauty of this arrangement was that virtually anything could be named Auxiliary Product.
Therefore, in theory, our company could receive the most different and unusual requests to
satisfy the East German industry requirements.
The most important advantage of this participation to the Arbeitgruppe was that the exchange
values involved in the chemical trade between Italy and East Germany were immense and would
easily cover also our relatively modest supply values.
This meant that our East German partners, when buying from us, would have never been
confronted with funds limitation.
This great advantage, however, did not give the expected results so quickly as expected.
The West German competitors made sure that our offers and samples were neglected or ignored.
It took me years to identify some product sectors where the Italians were more competitive than
the Germans. But in the end, we made it.
The local industry would submit a request for a given product.

The concerned Foreign Trade company (AHB) would contact Klaus, who would direct them to
me.
I would receive the inquiry, look for some suitable suppliers, submit our offer, qualify the
product, get the contract with a contract number that ensured that all the paperwork behind this
contract and its financing via the Arbeitgruppe was correctly done.
Having a contract number was the most important thing in this process: the number would mean
that the contract was recorded in the Arbeitgruppe system, ensuring payments means for the
supply.
Once we had the coveted contract number in hand, we would buy the product, ship it to DDR
according to the rules and to the contract prescriptions. Thanks to the Arbeitgruppe arrangement
our invoice would be paid by DDR within a short time, generally well before our payment to our
supplier was due. Easy? Yes, but it took some years and many trips and meetings and my
personal stubbornness and a very rich company supporting me and subsidizing my activity for
some years without tangible results to perfect the system.
I will never forget my first order within the frame of this arrangement, after so many trips and
discussions without tangible results and only hopes. It was early August of 1984, the Italian
factories were closing for the traditional long period of season holidays when I got a phone call
from Klaus, advising that one of their factories producing rubber parts was in bad, urgent need of
a release liquid to be sprayed on the moulds to allow the correct separation of the rubber part
from the mould. The producer of this liquid was a small laboratory in Milano, that was just
closing for the long holiday period. Could I please rush to this laboratory, buy a certain quantity
of this liquid, take it to Milano Linate airport for loading on the Interflug flight of that day? This
would ensure the regular production off the East German factory. Klaus explained that they had
no time to process the paperwork for this small but vital order, and for this reason he would ask
us to solve the problem trusting his word that everything would be all right. Payment of this
order (about 1000 GBP) would be made in the course of the following year. The reward? At last,
my company could take pride in having become an official supplier of the German Democratic
Republic!
I hopped on my car and rushed to this laboratory, bought the liquid, paid in cash, took these cans
to the airport where the Interflug fight was waiting for me and shipped the badly needed liquid to
DDR.
This was the first order after 3 years of platonic trips and offers and negotiations: 1000 GBP of
value, to be paid one year after.
But apparently, I have been instrumental in saving a factory in big troubles and a few heads of
DDR managers who have been sleeping on their job. A most important reliability test that we
passed with best marks.
The result of this small but vital order has been the sudden acceleration of all the quality tests of
the materials that we have been offering in the last 3-4 years, the quick approval of some of them
and, at long last, the first real, large orders, with many to follow.

(6) The First Steps

Earlier I mentioned the contrast between the official position taken by East Germany that would
oppose the political influence coming from West Germany and the West in general.
Strong controls at the border would prevent the entry of any magazine or newspaper from the
West. Even the TV was broadcast in the two European blocks with two different systems: PAL in
the West and Secam in the East. In this way the East Germans in theory were protected from the
“corruption” that was “undermining” the West.
The need for hard currency, to finance their imports and debts, was so strong that the East
German government put in place a number of systems to collect as much hard currency as
possible. This vital activity was monitored by the Kommerzielle Koordinierung (Ko-Ko, in short).
Ko-Ko, controlled by the STASI secret police, established some Foreign Trade companies, each
of them dedicated to a specific activity. One of these was Transinter, where Klaus was one of the
managers, that acted as a “commercial police” checking the proper direction and handling of some
vital business sectors.
For instance, Ko-Ko had a company that would sell antiques, that otherwise were strictly forbidden
for export.
A Ko-Ko office was dedicated to the “sale” of human beings, i.e. those DDR-citizens that wanted to
leave the country before retirement and had the right connections in the West that were ready to
pay the requested sum to obtain their freedom to cross the border before they had repaid the State
for their education with their work. The price to be paid was depending on the status, the
education, the job, the political importance of this person. This activity has been very well
presented in the movie “The Bridge of Spies” directed by Steven Spielberg in 2015, where the
exchange of the spies had to be negotiated with the man in charge of these deals on the East
German side. This man really existed: Mr. Wolfgang Vogel, a lawyer who was quite well known in
East Germany for his “job”.
I remember another State company named Intershop, in charge of selling Western goods in East
Germany, against the payment in hard currency. No questions asked about where this money was
coming from. These shops were located close to stations, airports, hotels, in strategic positions,
officially to facilitate the supply to the Western visitors, but in reality where the collection of
precious hard currency from the East Germans was made easy by offering them the coveted
Western goods that were officially so criticized and opposed.
By the way, the Intershops would sell also the device that would allow the Secam TV sets to
receive the PAL broadcast coming from West Germany. The paradox was that officially it was
forbidden to watch the Western TV programs, but the same Government that was forbidding this,
would sell the device that made this breach of the law possible.
I believe that everybody in GDR would watch the West German TV programs. Therefore the local
people were perfectly informed of what was happening in the West, the latest news, our living
standards, fashion, travel possibilities, freedom of speech, etc.
These people were living in a dichotomy situation, in which during the day they should behave and
stick to the complex rules of the East German tough communist system, whereas in the evening
they would watch what was happening in the West.
I had the impression that many TV programs coming from West Berlin were made on purpose to
highlight the discrepancy between the two living standards. Often the West German TV would
show the cars and the lights and the shops of Ku-Damm in West Berlin that the East Germans
would compare against the dull, sad, dark and gloomy sight of the East side of Berlin..
Visiting East Germany was made difficult by a number of limitations and very strict controls.
Generally the Western visitors would have access to East Germany only in Berlin, by flying to the
Schoenefeld airport, or by crossing the famous Check Point Charlie when coming from West Berlin
on foot and by car. I crossed this Check Point hundreds of times, and on each and every occasion
I would feel uneasy, when strictly scrutinized by the Vopos, the border guards. Access to East
Germany was admitted also during the Leipzig Exhibition. In both cases the Western visitor could
move only within the town limit. A tourist visa would be stamped on the passport, valid until
midnight. A longer stay (for instance to visit the Leipzig Exhibition) a special visa with limited longer
duration was released.
When I became part of the Abreitgruppe Italy-DDR for the chemical sector, I received a multiple

visa that allowed me to travel all over the country and stay there as long as needed.
The fact that I have been given this special visa was the evidence that I have been thoroughly
screened, including my family and my firm, and found trustworthy, under the responsibility of Klaus
for my behaviour.
I would fly to Berlin Tegel, rent a car, cross Check Point Charlie and drive to East Berlin, in one of
the hotels where the Western citizens were allowed to stay. Most of the Foreign Trade companies
that I did business with were located in Berlin. Some other were in Leipzig, where I would drive
very often. In the motorway, made of large cement blocks, the speed was controlled very
frequently and the police would systematically stop all foreign cars for controls …. and speeding
fines, another way to collect funds for the State. This joke of the speeding fines was so frequent
that I put the fines in my traveling expenses account as “motorway tickets”.. Once I shyly asked the
policeman why he stopped me for speeding and not the other cars and trucks driving at the same
speed as mine. The answer I got was a harsh reproach that I, as guest of DDR, should behave
better than the others.
The Western travellers had to pay hotels in Western currency. The use of credit cards was very
rare, at that time. The official exchange rate between West and East Mark was 1:1. However
there was a flourishing black market for the currency that reached even 1:6.
The rules of my company and the promise of a correct behaviour to Klaus forbade me to profit from
this favourable exchange rate that was offered by pedestrians close to hotels, bars and
restaurants in the town center. Also because one never knew whether or not the guy offering to
exchange money was a Stasi informer (most probable).
This leads me to tell something more about the Stasi and its control of the local people and of the
Western visitors.

(7) What I learned

Stasi stands for Staatliche Sicherheitdienst, the State Security Service. A most feared organization, it counted 90,000 official employees and about 200,000 unofficial informers, named IM (Inoffizieller Mitarbeiter), some of them located in West Germany. A very strict and well-organized control was put in place to monitor the activity of the individuals, their political ideas, their reliability and acceptance of the Party indications and prescriptions. A detailed database was kept in the Stasi quarters, collecting all reports sent by the informers and police and Party offices
Anybody could be an unofficial informer, sending reports to the local Stasi office about anything that was heard and of some political and security relevance. I remember the case that a German colleague of mine told me in the late ’90s, after many hesitations and reluctantly.

Before the fall of the Wall, he was a high-level nuclear scientist, born and living in East Germany. Member of the Communist Party (as anybody had to be in order to progress in studies and career), he was allowed to travel intensively but limited to the Communist block. He made a reasonable academical career, married, grew his family, and carried a regular life but never reached any top position. Somehow his career could not progress beyond a certain level.

A couple of years after the fall of the Wall, he has been called by the newly established organization that was in charge of handling the Stasi files that have been found in the Stasi quarters in the key areas of the country. They had found a thick file with his name and kept it at his disposal in their Berlin office for six months, to give him the time to read it, if he wanted to do so. It took my colleague some time to come to the decision of opening this chapter of his life, that he had closed with the fall of the Wall (the “Wende”, the U-turn, as they call it in Germany) , starting a new life
with a new job, great difficulties and many complications, because his former work experiences did not interest the West German academic environment. One day he happened to be in Berlin and went to this State office in charge of the Stasi files, received a thick file with his name and a desk where he could sit at to read it. And he found a thick collection of reports about his trips, about his doubts regarding the quality of the East German science academic organization, his criticism for the lack of personal progress in his work, his ambitions for a better life. And – much to his sorrow and disappointment – the file showed that most of the reports were written by his closest friend, the person that he trusted and treated like a brother..! I remember that while he was telling me this story, even after so many years, this betrayal and finding out that his closest friend was a Stasi informer, was still hurting him deeply. I found that in theory a simple conversation with a foreigner was supposed to be reported to the local Stasi officer. I doubt that this has taken place so frequently as that, but surely a tremendous amount of information was collected in the widest database kept by hand in the Stasi central offices in Berlin, Leipzig and some other East German towns.

I spoke of Stasi with Klaus sometimes, but I sensed that this topic made him uncomfortable. However, I remember that I was commenting with him, expressing my disbelief, the enormous
amount of information that Stasi was collecting and what would be the use of this database. I remember Klaus’ answer by mimicking the gesture of a fisherman reeling the line. They would collect information and store it until it was needed, he said. When the right moment came, the cards would be put on the table and made use of, to obtain the desired effect. A frequent case reported to Stasi would be the meeting with a prostitute. Prostitutes in East Germany were engaged by Stasi as informers. Sometimes this meeting would be set up by Stasi themselves, the so-called
“honey trap”, to create evidences for a blackmail. Exchanging money in the black market, or smuggling antiques bought unofficially and similar offenses would also be recorded for later use.
As an example of this procedure, which was common in all Iron Curtain countries, each of them organized with its own secret police inspired by the Russian KGB, I had heard of a case that had
taken place in Moscow, related to a company that I knew very well.

The resident manager of this Western company one night has been arrested and taken to the Lubjanka, the main office of the KGB in Moscow Here he would be questioned by an officer, who
confronted him with a list of facts evidencing his breaking of the law: on such and such a day (two years before) you met Mr. so and so and bought a precious icon, paying in hard currency, i.e. an
illegal transaction for a protected article. On such and such a date you flew to the West hiding this icon in your luggage, i.e. forbidden export of a protected item. We have evidence of all this. This is a most serious breach of our laws, that can take you to prison. However, there is the possibility to avoid this unhappy end: give us the information that we will ask for and you can remain in freedom. You will be free to carry on with your work as before, with this obligation to report to us when we ask for information regarding industrial activities in your country. This guy agreed, obviously, and was set free. A few days later, pretending that his job required him to fly back to his country in the West, he flew back and, wisely, informed his company of what happened. The company, with his agreement, fired him and took officially distance from him, in order not to jeopardize their business in USSR. However, they closed their office in Moscow and stayed away from USSR for some years. The guy has changed his job completely and does not take a plane since then, in fear of an unplanned landing in Moscow where a black car would be waiting for him….

The fact that I had a multiple visa qualified me as the object of a Stasi file. Klaus said that this was a routine procedure for those who, like me, would be traveling so often and have an intensive business in DDR. If I did nothing wrong and behaved correctly, I would never have problems. In case of any issue, I should direct the authority to him, as he was the responsible person in DDR for me.

After the Fall of the Wall, in a final meeting with Klaus when we declared our collaboration as terminated because of the major economical changes that occurred, he admitted being a high ranking
Stasi officer.I have always been sure of his being a member of Stasi, but I did not suspect him to be at such a high level of the hierarchy of the Secret Police. Thinking back, the fear that would spread among the participants of the meetings attended by him should have indicated that, because of his Stasi rank, he could become a very dangerous person if things would not run correctly in the wanted direction. The information collected by Stasi would remain forever in the files and would affect one’s life for
years.

8)  secrets? Or provocation?

 

I remember an evening spent in a Leipzig restaurant together with a group of people from a factory where we would be supplying some materials.

I offered this dinner in a nice restaurant, where I would foot the bill in West Marks, qualifying our group for a rich menu including many products and ingredients that normally were not made available to the common people paying with their East German Marks.

I was sitting next to a technician, a man younger than me, who spoke only German.

I introduced myself and this guy noted with interest my Italian nationality.

The fact that I was not a German, plus a few drinks during the dinner, removed progressively the inhibitions that normally would have brought this man to be a lot more careful when stating his real opinions and ideas. And he told me some parts of his life and the troubles that were affecting  it.

On 13th August 1961 the East German government decided to build the Wall that would separate East Germany from the West side. It started in Berlin, separating  West Berlin from the rest of East Germany. This wall, initially made of barbed wire and then of cement, officially was built to prevent the “contamination” coming from this Western “island” embedded in the country, but in reality to stop the emigration of thousands of East German citizens who would look for a better life in West Germany via Berlin.  

In fact,  after crossing the border, these East Germans emigrates could ask for a West German passport that would be automatically released and would allow them to become  West German citizens in all respects.

Let us bear in mind that the West German government had never acknowledged the separation of the East side from the original territory and made always clear that the East Germans, once in West Germany, could obtain the West German nationality with all its advantages.

One could imagine that almost all the East Germans, when confronted with their daily difficulties and frustrations, would often have the dream in mind to cross the border and become West Germans…

When the Wall was built,  my new friend was 5 years old. He had an older brother, a teenager, who decided to leave the country and emigrate to West Germany where he would be hosted by some relatives, hoping for a better life.

Since that  fateful day my new friend had never met his older brother, nor had contacts of any sort with him.

However, the sheer fact that in his files there was an indication of the existence of this older brother emigrated to the West affected the destiny of his family, then his later years and life in a subtle but devastating way.

A family in disgrace like his, because of the political decisions and behaviour of one of the family members, would always be among the last in the cue for any demand for holiday home, or university allowance, or permission to travel to another Communist country (not even dreaming of going to the West!), in general anything that depended on the decisions from the government and its local offices. No substantial job progress, mistrust from the factory management, non-stop controls of behaviour, diffidence.  Endless harassment and no way to improve the situation. The news of this punishment was made known publicly, to teach a lesson to those who had any intentions to manifest dissent. In particular, those who were dreaming of escaping to the West would know what would be the destiny of the rest of the family that would remain in East Germany.

This man and his family have tried many times to inform the authorities that they had no contact with this brother, that they had nothing to do with him since years. Useless.   He told me that if he met his brother in the street (hypothetical..) , he would not even recognize him. “I hate this brother, who is making my life so miserable!”, he told me at the end of his story.

My embarrassment was growing increasingly, while this man was pouring the story of his problems and frustrations on me.  I was constantly worried to be the target of some provocation from a Stasi informer, as this man could be, with the risk to lose our business in that market.  Therefore I started to describe all the negative sides of our life in the West, versus the many (?) advantages of life in East Germany: long work hours, impossible business targets, the risk of being fired, increasing unemployment, salary that was never sufficient, never enough time for family life, the risks that one would run of being robbed, or mugged in the street, and other clichés of this sort.  And I started praising the advantage of having a job that would last under any circumstances, a decent salary, no stress during the few hours of work, no special responsibilities, a lot of time for culture and hobbies and other similar topics that could help to soften the mood of this conversation. But I sensed that he would not believe me or that I was making fun of his secrets.

After that dinner I have not met this technician any more: I do not know what happened to him after that conversation so difficult for me, in which either he opened his heart to an unknown foreigner, or in which he tried to make me express criticism and negative opinions on the country that was hosting me for my business, to report all this to Stasi.  Most probably both…

(9) an unexpected lodging solution

 

Staying overnight in East Berlin was never a big problem for me: I was a regular client of the Hotel Metropol, close to the IHZ building and to the area where the Ministries had their quarters.

The problem was Leipzig:  in the first years when visiting the Spring and Autumn Exhibition, finding an acceptable lodging solution was becoming more and more difficult.

And I did not want to bother my “guardian angel” Klaus for such a petty problem.   

After a couple of nights in the “Jenny Marx” youth hostel, where I would sleep in a berth and wash in a sink, with one shower per floor, I met a business friend of mine who, thanks to his local powerful connections, had found an unexpected solution for his stay in Leipzig.  

He had a room in a very large flat, with an excellent breakfast and very friendly treatment.  

No sooner said than done, after my insistence, he brought me to this flat, not far from the center of Leipzig, where I met his landlady, Mrs. Eva M.

She showed me her huge flat with a nice garden and explained that it belonged to her family since decades, already before the war.  I knew that the average standard flat in East Germany was not larger than 50 m2. And this flat was 210 m2 plus the garden! And Mrs. E. was living there with her daughter: such a large flat only for two persons was something inconceivable in DDR.  However, she succeeded in keeping this flat for her family by presenting it to the authorities as the Leipzig guesthouse of the Berlin Academy of Fine Arts.

She explained to me that the only trouble for them was to host some boring, elderly art professors from time to time, less and less frequently, and she would enjoy the family home without major problems for the rest of the time.

She showed me all the rooms, the bathrooms, the bedrooms, the huge lounge with a grand piano.  In the cupboard, I could see at least three full sets of Meissen chinaware of different patterns…   

Compared to the berth of the Jenny Marx hostel where I was staying, this flat was a king palace.  

I went on my knees and asked her to let me sleep on a mattress on the floor anywhere in her flat, but please would she let me stay there?

Mrs. Eva had compassion for me and gave me a tiny room for the period of that Exhibition, with the understanding that the next times I would be given a much larger and comfortable room.   I paid in West Mark what she asked for and rounded the sum extravagantly, to show my gratitude. And I invited her and her lovely daughter for dinner, to celebrate our meeting.

This is how I got to know Mrs. Eva and Helga, her daughter.

I have been several times a guest of this flat and, by talking to Mrs. Eva and her daughter,  I had the opportunity to learn many things about the life standards and daily personal problems in East Germany that normally were not known by the common visitors.

Mrs. Eva was coming from an aristocratic family, as her distinguished look and natural elegance would tell.  She spoke “Hochdeutsch” without any accent, which contrasted with the terrible “Sächsisch” dialect spoken by the local people. Graduated in physiotherapy, she had married a surgeon who reached a top position in the medical environment in Leipzig. They had a son, a fervent communist also freshly graduated in medicine, and a daughter, also employed in the children hospital of Leipzig.  Her husband left her for a young nurse, the son married and went to live in his own flat, so Mrs. Eva was left with this very wide apartment, a young daughter in her late teen years and a lot of bills to pay. She worked as a physiotherapist with the Leipzig Ballet, massaging the dancers, plus her private practice. However, it was clear that the rent of this flat during the Exhibition was a God-sent source of precious hard currency that helped her financial situation and eased their daily difficulties, unimaginable for a Western occasional visitor.  

With the expansion of our business in DDR and the decision (read: obligation from the DDR

Ministries) to have our own stand at the Exhibition,  I increased my team dedicated to this growing market. Therefore we asked Mrs. Eva to reserve her flat only to my team of 2-3 persons and our guests, knowing that in any case, this solution would be substantially cheaper and far better than having hotel rooms virtually impossible to book.

Therefore we enjoyed Mrs. Eva’s hospitality and learned a lot from this experience.

Breakfasts were served with the Meissen chinaware, a lit candle, and a rose. A very rich breakfast, with a variety of cheese, sausages, cakes, jams, soft-boiled eggs, hot bread rolls, orange juice, tea or coffee.   This is the normal breakfast when traveling today in any nation almost everywhere in the world. But 30-35 years ago in East Germany, it was something almost unknown in this scale and variety.

In fact, we learned with embarrassment that at dawn Mrs. Eva would cross the town with her bike to find the eggs and sausages and butter for our breakfast.  When we heard of her care and sacrifice for us, we took the habit of bringing her a lot of nice presents from Italy on each occasion, to show how grateful we were for her attention.

For us, engaged non-stop in meetings at our stand for the next 8 hours, these breakfasts were the meals that our strict schedule would not allow us to go for.

Mrs. Eva’s daughter, Helga, was a very pretty girl, always cheerful, curious to hear what was happening in the worlds beyond the Wall, sometimes a little naïve, as I will tell later.   She had a wonderful temperament and this helped her considerably in her nursing job, taking care of the sick children in hospital.

Her secret dream, as shared by many other East German girls, was to find a Western European husband and be able to leave East Germany for a better life.

I remember one of our guests, an Italian young man, owner of a factory that co-operated with us for the sales of their products in East Germany.  This young man was ideal for Helga: handsome, coming from an excellent, rich family, speaking fluent German, with a most solid position and… bachelor!  When this young man came to Leipzig for a meeting, we arranged that he would stay in “our” flat during this visit. I introduced him with Helga and his interest was immediate.  He invited her for dinner and we all were happy, imagining the good start of a story that could make Helga’s secret dream come true. After a second evening spent together with Helga, this young man, quite embarrassed,  shared his confidence with me.

She was indeed a fantastic girl, very attractive, with a most cheerful temperament that soon intrigued him.  All the ingredients for a passionate love story were there. However, it seems that, once the mutually shared interest became evident between them, she started telling him about her wish to leave the country by marrying a Western European. And this project would have been subject to a specific procedure, that she listed point by point to him.

They should have some meetings on the occasion of the next 3-4 Leipzig Exhibitions.

Somebody should witness these meetings and report them to the relevant authorities, to prove that this marriage was not fabricated to facilitate Helga’s emigration, that it was “true love”.

Then an application should be submitted to the authorities, to present the marriage proposal officially.  Then other complicated procedures should be followed until the full completion of the file. My friend admitted that this plan laid out to him on the second date with Helga has cooled his enthusiasm totally. And despite the beauty and the nice temperament of this girl, he disappeared from the scene.

Helga has been very sorry to see her Charming Prince disappearing: she has never understood how naïve she has been in unveiling her plan so rashly and matter-of-factly, killing any romanticism and scaring our Italian friend that felt overwhelmed by the DDR diabolical bureaucracy

The night of the fall of the Wall Helga left for West Germany forever.

(10) An interesting case, with an unexpected ending

 

Chatting with my “guardian angel” Klaus about how we could expand our assistance to the East German industry,  by chance I mentioned some friends of mine who were producing packaging solutions for the pharmaceutical industry, namely a device that delivers an exact quantity of spray medicament.

What I am going to describe here in the next few lines, in reality took several months to develop, but it is interesting to recall the various steps of the negotiation until success… and its unexpected aftermath.

Klaus took note of this contact of mine and, some weeks later, came back on this subject to ask whether my friends were willing to sell the license and help to install a production of this device in East Germany.  I reported this interest to my friends, who – by sheer luck! – happened to have just delivered a complete plant to USSR to produce this device in the requested volumes and with the same characteristics. They quickly translated the full project from Russian into German, included a nice commission for my company and gave it to me.

A couple of weeks after their request, I was back to Berlin,  presenting a detailed offer to the East German potential clients, much to their astonishment for the rapidity of our reaction and the completeness of the proposal.  A great performance, to their eyes.

A number of meetings followed, to present samples, technical documents, studies, analyses, etc.  Questions answered, objections solved, everything looking very positive. Then something unexpected happened: I mentioned that one of the components of this device was a tiny shaped piece made of a very specially formulated material, produced by means of a dedicated press.  The quantities involved would not justify the investment in putting together the special formulation of the materials for this component and to buy the dedicated press to manufacture it. Wouldn’t it be a lot cheaper to import these gaskets from Italy, in the needed quantities and times, ready-made for them by my friends’  factory? Then they would produce the remaining components in East German with our licence and assemble the complete device. They took their time to study this option.

Weeks later out came the question regarding the cost of this ready-made Italian component.  I checked and gave them the requested price. Really peanuts. Silence. They disappeared and, after some time, they asked me what would be the cost of a complete device, if imported ready made from our factory.  I thought they knew this price very well, since they were buying this device from the West since years. Anyway, in order to be fair, I gave them the same price charged to any major West European client for that device in those quantities, including our fair margin for us.  Silence. Again they disappeared for some time. Then, weeks later, they asked whether we were ready to deliver a quantity of these devices at that price and how quickly. Yes, of course, with pleasure. Could I put this quotation in writing for them? Yes, of course. And I did it.  Silence for some more weeks. Then Klaus summoned me in Berlin and I received the first order for the complete devices to be supplied ready-made from Italy. The only comment was that the project for the license was put on hold and then eventually would have been abandoned.

We started supplying the ready-made devices on a quarterly basis, the East Germans pharmaceutical producers installed our ready-made devices on their medicament and this supply went on and on for years, untroubled.  

We were happy to have a continuous supply, rather than a one-shot deal and enjoyed our success for what it lasted.

However something intriguing took place after the first deliveries: on the occasion of the Leipzig Exhibition, I had been invited to an official event organized by the East German authorities and their top trade and industrial executives, together with the Ambassadors and the managers of the most important business partners from the West.  Normally such a reception would be with strictly limited to VIP guests and I was flattered to be invited.

When I got there, Klaus took hold of me and we made a tour of the reception hall together.

We met some of these East German top executives, to whom I was introduced as:  “the Italian business partner belonging to the DDR-Italy working group for the chemical industry. He is in charge of the “auxiliary products” and,  with his help, we have solved a major problem with our pharmaceutical industry”. And these East German VIP executives, that under normal circumstances would have swiftly brushed this introduction away with some polite short sentences,  would express their welcome and congratulations to me with a strange expression of respect that I could not really understand. It seemed a little exaggerated to me, but I I was flattered by all this attention and readily accepted the pleasant situation of being welcomed as  such an important business partner in that context. And the caviar and champagne were excellent…

Some years later, just after the fall of the Wall, short before the reunion of the two Germany’s, during one of our last participation to a next Leipzig Exhibition, a gentleman came to our stand and asked to meet Mr. Tassi.  He was speaking in English, which was quite unusual in that context. He introduced himself to me as one of the managers in charge of importing these devices from the West.. The problem was that the price that they had been paying was three times higher than ours…  This high spend forced the local authorities to consider installing a factory to produce these devices rather than importing them. Hence the contact with me for the licence project.

Then, during our discussions,  they found out what was the real, regular  price for such a ready-made device, received written evidence from my offer and quality confirmation from the first industrial tests.  

In this way it became evident that they had been grossly mishandling the whole case since years, by paying three times the regular price. Negligence? Curruption? Huge sums paid as overprice that have disappeared in the West.  In which pockets? To do what?

And Klaus made sure that the persons in charge of these deals  were put under investigation. The former supplier became “persona non grata”. Two executives  of the importing company have been tried and ended in prison, , the third one (this guy) succeeded in escaping to South Africa and had to hide there until the fall of the Wall.  

When he came back from his exile, he has been looking for me.   He wanted to meet me face-to-face to tell me what kind of troubles I have caused to his colleagues and to himself  with our offers. Quite an embarrassing moment..

I told him how sorry I was to hear of their troubles, without having the minimum awareness of the damage that I was causing with our quotations.   Pity that we had not had any idea of what was at stake, otherwise – maybe – we would have handled this matter differently.

We never met again after that time.

Eventually I understood what had happened:  when I mentioned my connection to the Italian producer of these devices, Klaus made his “homework” by checking the situation with their pharmaceutical industry. Then the project for a local production was born, to avoid importing these “very expensive” devices.

Klaus had monitored the whole negotiation regarding this project, studied the case in depth, discovered the gross discrepancy between our quotation and the price paid for the imported devices, had proven that our devices were as good as the currently used ones, had reported the case to the relevant authorities who started an investigation “in the DDR style”.  

The outcome was what this guy coming from South Africa had told me in Leipzig: two buyers in jail and another one in exile and some Western sales directors who would not dare to come to East Germany anymore.    And I happened to be the unaware responsible for all this!

Going back in my memory, eventually I understood  the expressions of respect and some hints of concern coming from the East German VIP executives during that official reception in Leipzig: Klaus, without informing me of this shameful background, was introducing me and showing me off as the person who helped to “moralize” that trade.  I was there, in this reception hall full of VIP’s, gobbling caviar and sipping champagne, totally unaware of the turmoil that I had caused, looking a little stupid rather than a dangerous business moralizer..