From 1933 to the end of the Second World War, high-ranking officers of the Armed Forces of Nazi Germany accepted vast bribes in the form of cash, estates, and tax exemptions in exchange for their loyalty to Nazism. Unlike bribery at lower ranks in the Wehrmacht, which was also widespread, these payments were regularized, technically legal and made with the full knowledge and consent of the leading Nazi figures.
Background
Historically, German and other European rulers commonly awarded titles, estates, and monetary rewards to diplomats and high-ranking officers. This was generally done to form a bond between the ruler and important subjects. The historical practice, however, differed from the one applied by Hitler. While in the Kingdom of Prussia, awards had usually been given publicly after successful campaigns or wars, Hitler dispensed the rewards to his elites in secret during the war.
Diego Gambetta argues that Hitler's practice can be considered selective incentives rather than bribery, since bribery must involve three agents (the truster, the fiduciary and the corrupter) rather than two. In this case, Hitler's generals (the fiduciary) were paid to do what they were supposed to do for him (the truster, and not the corrupter) in any case. However, by accepting the gifts, the generals sacrificed the independence and the political influence they had already been losing as the result of the systematic consolidation of Hitler's role as the sole "genius strategist", and would remain chained to Hitler's decisions even when their soldiers and the common people suffered during the last phase of the war. Thus, historians consider the practice, although "not technically illegal" (since the gifts were granted by Hitler himself), "smacking of corruption" and "having an aura of deliberate corruption from above."
Some historians compare the practice with that used by Napoleon, his military class and his officials.
Mechanism
To ensure the absolute loyalty of the Wehrmacht officers and to console them over the loss of their "state within the state", Hitler had created what the American historian Gerhard Weinberg called "a vast secret program of bribery involving practically all at the highest levels of command". Hitler routinely presented his leading commanders with "gifts" of free estates, cars, checks made out for large sums of cash, and lifetime exemptions from paying taxes. A typical example was a check made out for a half million Reichsmarks, presented to Field Marshal Günther von Kluge in October 1942, together with the promise that he could bill the German treasury for any and all "improvements" that he might wish to make to his estate.
Such was the success of Hitler's bribery system that by 1942, many officers had come to expect the bestowing of "gifts" from Hitler and were unwilling to bite the hand that fed them so generously. When Field Marshal Fedor von Bock was sacked by Hitler in December 1941, his first reaction was to contact Hitler's aide Rudolf Schmundt to ask if his sacking meant that he was no longer to receive bribes from the Konto 5 ("bank account 5") slush fund.
Konto 5 special fund
The Konto 5 slush fund, run by the chief of the Reich Chancellery Hans Lammers and distributed by Hitler as personal presents, started with a budget of about 150,000 Reichsmarks in 1933 and had grown to about 40 million Reichsmarks by 1945. Initially the funds came through his office as Reichskanzler and, after 1934, as Reichspräsident. The mandatory pre-1933 checks through parliament and the countersigning of the payments by the German finance minister were abolished by the Nazis. The money spent was at Hitler's discretion and required no other approval.
Payments from Konto 5, known officially as Aufwandsentschädigungen ("compensation for expenses"), had been made to Cabinet ministers and senior civil servants since April 1936. As part of the reorganization of the military command structure following the Blomberg–Fritsch Affair in early 1938, it was declared that the service chiefs, namely Oberkommando der Wehrmacht (OKW) Chief Wilhelm Keitel, Army commander Walter von Brauchitsch, Luftwaffe commander Hermann Göring and Kriegsmarine commander Erich Raeder were to have the same status as Cabinet ministers and so all started to receive publicly the same pay as a Cabinet member and privately payments from Konto 5.