By Janis Siegel, JTNews Correspondent
Winning the 2009 Accounting Historians Journal Award for her paper, “The Accountant’s Responsibility for the Information They Report,” which examined the role of accountants in perpetuating the Holocaust, was extremely rewarding for Dr. Ellen Lippman, an associate professor of Accounting at the University of Portland’s Pamplin School of Business in Oregon.
But Lippman hopes her work will persuade young professionals that just following the rules, as they’re often trained to do, is not always the right course of action. Instead, she wants her students to bring a sense of morality to their number-crunching.
“The accountants were the ones putting these numbers together,” Lippman told the JTNews from her office in Oregon. “They were making sure what they were reporting was accurate. Something should have been apparent to everyone, but they were able to ignore it. There’s no question that they would have been able to figure out what was going on.”
Lippman pored through transcripts from international military tribunals after the war and discovered that only the highest ranking accountants were held responsible.
Lippman would set the bar much higher.
“The lowly accountants weren’t held to be responsible, but they should have been,” she said. “I’m implicating anyone who was in a position to know. What we do professionally is also who we are personally. I don’t believe in divorcing your professional life from your personal life.”
Lippman found the original income statements written in German by Holocaust-era accountants, and documents in historical post-war books that projected exactly what it would cost to feed or slowly starve a prisoner, while reaping the benefits of their labor for a nine-month period, which was their average survival rate. If they didn’t die of starvation and exhaustion, they would be killed.
However, killing prisoners was also expensive, according to the Germans’ own accounting documents.
“In Nazi Germany,” Lippman wrote, “accountants used a cost-benefit analysis to compare the cost of killing children with gas and then burning their bodies, to the alternative of burning the children to death. Both options required expenditure for burning, but the second option would use less gas, thereby reducing the costs.”
And a prisoner’s value did not end at his or her death. With the help of existing research by others, Lippman showed the extent to which accounting continued to play an important role in the atrocities.
“Upon death, the prisoner still generated profit,” wrote the researchers. “The income statement included an estimate of revenue at death from the value of the deceased’s personal clothing, valuables, currency, gold extracted from the teeth of the deceased, and sales of hair, fat (for soap) and ashes for fertilizer less the cost of cremation that averaged two marks per person.”
In a 2007 paper about Holocaust accounting practices, Lippman teamed up with University of Puget Sound School of Business and Leadership associate professor, Dr. Paula Wilson, to write a paper called “The Culpability of Accounting in Perpetuating the Holocaust.” The paper identified several German corporations and Nazi organizations that took advantage of the readily available slave labor using various accounting methods.
ThysseKrupp AG, a company run by the Krupp family of Germany, manufactured armaments and tanks during the war. They used slave labor in their plants, wrote Lippman and Wilson, and set up a manufacturing plant inside the Auschwitz Concentration Camp by 1943. In their research taken from military tribunal records, Lippman and Wilson estimated the company, now known as Krupp, used somewhere between 75,000 and 100,000 prisoners as slave labor in Germany.
“What impressed me most about our culpability research is the moral responsibility that accountants face in their work,” wrote Wilson in an e-mail. She is currently on sabbatical from UPS. “My students are often quite surprised to learn that accounting is not black and white and that accountants do not simply report the facts. I use the Holocaust case in my teaching as an extreme example of how accounting is not value neutral. Even what managers choose to account for reflects their values and their organization’s values.”
Lippman also writes about the apparent lack of questioning or protest from accountants about what they were seeing in the statements they were preparing. Although she found evidence that a few individuals either quit or refused to do the work, most, she discovered, merely went along, doing their jobs in silence.
Those who did speak up were often severely reprimanded and brought up in front of disciplinary committees for lesser offenses such as “using language considered too respectful when corresponding with Jewish clients,” according to her research.
“It’s really difficult to be a whistleblower,” Lippman said. “For most accountants doing the work in Germany at the time, you would have thought, ‘Where are the normal costs we would expect for factories?’ They’re not there.”