In the previous article written by Prof. Bauer, he refers to a correspondence with late Chaika Grossman, a leader of the underground in the Bialystok ghetto, who survived the war and served as a Knesset member for several terms. She went on to publish her correspondence with the Lubavitcher Rebbe on August 22, 1980, quoting Schneersohn and expressing some pointed criticism toward the Rebbe that created shock-waves at the 770 world headquarters in Brooklyn.
Within a week, the Rebbe sent her a reply on his personal stationary. This letter has been reprinted in the Likutei Sichot Vol. 21, pp. 397-398. What is significant is that the Rebbe does confirm the gist of what he had originally written about the role of Hitler as that of a “new Nebuchadnezzar.” God merely used Hitler as His instrument much like he used Nebuchadnezzar in the days of Jeremiah.
As a proof text, he cites the passage, “Behold! I will send for and fetch all the tribes of the north, says the LORD (and I will send to Nebuchadnezzar, king of Babylon, my servant); I will bring them against this land, against its inhabitants, and against all these neighboring nations. I will doom them, making them an object of horror, of ridicule, of everlasting reproach” (Jeremiah 25:9). As additional scriptural support, the Rebbe cites the verse, Woe to Assyria, My rod in anger my staff in wrath!” (Isa. 10:5).
After citing these passages the Rebbe further explains that whereas the massacres described in Jeremiah were clearly because of a punishment, as the prophet forewarned they would be, the Rebbe insists that the Holocaust cannot be understood in this way. However, the Rebbe insists that his metaphor of the “operation,” does not even remotely suggest the idea of “punishment,” for as in the case of person undergoing an operation, its purpose is only curative—even though we as mortals cannot comprehend the magnitude of the Divine design.
Apologists for the Chabad movement go to considerable lengths to illustrate that the example of surgery is brought only in order to illustrate how something as horrible as an amputation—although beneficial—can seem criminal to the uninitiated. It is by no means brought in order to imply that those that perished were amputated for the benefit of the survivors. Moreover, such an operation serves as a tikkun for a greater good that cannot be intellectually imagined. If Hitler is actually the instrument of God’s retribution, then Jewish suffering is because of their backsliding and sinful ways.
Of course, we reject such a fundamentalist theology.
When comparing the Rebbe’s text to that of his father-in-law, Rabbi Yosef Yitzchak Schneersohn, the Rebbe’s response seems hollow at best—unless he is refuting the attitude expressed by the previous Rebbe before him. For the sake of clarity, let us reiterate the scolding words of Rabbi Yitzchak Schneersohn once more. I will stress his points with bold-faced lettering.
Schneersohn writes in his Likutei Dibburim:
“Question: Who is punishing the Jewish people, and why? And every individual must himself arrive at the real answer: The current predicament is the same as it has always been, in every instance in which the Jewish people “did evil in the eyes of G-d.” Each such case was followed by a famine or an epidemic or a wartime crisis — until the people returned to G-d and were saved…
Is it conceivable that people who desecrate Shabbos and eat treifos and so on, will overpower (so to speak) the Will of G-d, Who constantly desires that Eretz Yisrael should be a land of Torah and mitzvos, and that Jews in all other lands too should observe Torah and mitzvos? Realize that life and death are in your hands. And we must all keep in mind that “the hearts of kings and states¬ men are in the Hand of G-d.” The Jewish people will be saved not by statesmen nor by presidents nor by kings, but by G-d’s Will, which will act only when we return in teshuvah. It is commonly observed that when a freethinker or even a G-dless individual stands at the bedside of a desperately ill husband or wife or beloved only child, and the doctors say that G-d alone can help, the latent Jewish spark is awakened and this individual too turns to Him in prayer. Jewry is a desperately ill patient in need of great mercy. No Jew in any country can be certain of his life, and of course not certain of his property. American millionaires and bankers and prosperous businessmen would do well to draw a lesson from the current state of the migrants: they,too, were once millionaires and bankers and prosperous businessmen . . .
Fellow Jews! Things are grim. This is the dense and gloomy darkness that precedes the dawning of Jewry’s sun, with a complete Redemption through our righteous Mashiach. In the meantime it is dark. The one ray of hope is teshuvah — observing Shabbos and the laws of Family Purity and the other practical obligations, and bringing up one’s children in kosher Talmud Torah schools and yeshivos. Fellow Jews! Vigilantly observe the laws of Family Purity, and Family Purity will vigilantly watch over your children.” 
Now, if Rabbi Menachem Mendel Schneersohn’s theology is consistent with that of his father-in-law, whom he routinely quotes at every opportunity, then the real reason why God amputated a limb from the Jewish body was to preserve it from the contagion of sinfulness that characterized the spiritual lifestyle of European Jewry. I do not recall the exact place where I first read this thought, but Rabbi Y.Y. Schneersohn once asked the question, “If God is punishing the Jewish people with the Holocaust, why is it that only the pious and religious Jews are the primary victims and not those who have gone astray from the world of Torah and mitzvot? The Rebbe replied, that when a father punishes a child, he always smacks the child in the face, and the righteous Jews are indeed “the face” of Jewry.”
Despite efforts of Lubavitcher scholars to exonerate their Rebbe, not one of them has yet to deal with the theological legacy left by Rabbi Yosef Yitzchak Schneersohn. The student is merely reformulating the thinking of his master… Rabbi Schneersohn’s attitude is no different from that of the Christian evangelist Pat Robertson who routinely interprets mayhem and destruction to God’s retributive nature. Simply put, God hates sinners and He is willing, so we are told, to wipe them out–whether by flood, earthquake, pestilence, or even genocide.
 Yosef Yitzchak Schneersohn and Uri Kaploun (trans.), Likkutei Dibburim Vol 5, (Brooklyn, NY: Kehot Publication Society, 2000), 317-325.