ECONOMICS: Or Else–

For two years shark-mouthed Matyas Rakosi, Hungary’s Communist boss, had been casting covetous eyes at MAORT (Magyar Amerikai Olajipari Rt.), the $25 million American-owned Hungarian affiliate of Standard Oil Co. (New Jersey). Behind his greed was Moscow pressure: the American concession controlled richer fields than the Soviet-dominated joint company, Hungary’s only other oil producer. The Russians had operated MAORT for a short time under Red army occupation, and wanted it back. Last week, Rakosi seized MAORT and in Washington the two U.S. citizen executives from whom he took it summed up the Rakosi expropriation method: “The political police wrote out confessions and said we must sign them or else—. We signed.”

“You’re lying.” The Rakosi expropriation began with a police raid. At around dinner time on Sept. 18, police entered the Budapest apartment of MAORT’s president, Paul Ruedemann, and its director and technical adviser, George Bannantine. The two were taken to the forbidding grey stone pile at 60 Andrassy Ut which had once been headquarters for Hungary’s branch of Hitler’s Gestapo and is now used by the Hungarian version of the Soviet MVD. Three hours later questioning began.

During interrogation the two were periodically made to stand with their faces to a wall, noses and toes touching it, hands over their heads. Questioners worked in relays. Most questions were variations on two basic themes: 1) Was it not true that their real purpose in Hungary was to sabotage the Hungarian government? 2) had they not been doing this by curtailing production? Their answers were continuously interrupted by shouts of “You’re lying!” The first interrogation lasted six hours; the second, which began three hours later, lasted 15. Not until it ended were they given their first prison food—water, bread, one scrambled egg. Said Ruedemann: “It’s remarkable how malleable a man can become.”

“What Am I Doing Here?” On the third and fourth day, they were instructed to write confessions. None of their “confessions” were acceptable. On the fifth day they were handed “confessions” and told to sign them. Interrogators pointed to a stack of statements by company employees. “You’re not a boy. Look at what we have against you.” Back in his cell, Ruedemann noticed for the first time the sketchy histories of some previous suspects scribbled on the wall. One had stayed in the cell 17 days, another 23. Said Ruedemann: “Then I asked myself, ‘What am I doing here?’ ” Ruedemann signed the “confession.”

Next day the Hungarian Communist-controlled cabinet issued an order seizing MAORT on charges of “economic sabotage.” The day after, Ruedemann and Bannantine were notified that they had been expelled from Hungary. In a fast car, police took them from 60 Andrassy Ut to the Austrian border, unceremoniously ordered them over the line. It was the seventh day since their arrest. Six days later they were in Washington, reporting to the U.S. Government while wondering what could be done about the $25 million that American shareholders had lost in MAORT’s seizure.