Apartheid Victims Suing Global Corporations

American sees link to case on U.S. slavery

GAVIN DU VENAGE / SF Chronicle 9aug02

Johannesburg -- Emboldened by their success in winning more than a billion dollars in reparations for Holocaust victims, lawyers are now seeking billions in compensation from U.S. and international corporations for victims of South Africa's apartheid regime.

IBM and up to 100 other companies are being sued, in a case set to get under way today, for selling South Africa's white dictatorship equipment and lending it money, helping the regime limp on until it was supplanted by black majority rule in 1994.

And the flamboyant U.S. lawyer leading the charge says he hopes the apartheid suit will help force a settlement in a case closer to home -- a lawsuit filed in March on behalf of African Americans seeking compensation for abuses suffered by their ancestors during slavery.

"It is going to be incredibly difficult -- legally and politically -- for companies to settle with one group of black victims in South Africa but not to pay another group of black victims in the United States," says attorney Ed Fagan.

Best known for winning a $1.25 billion settlement in 1998 from Swiss banks accused of hoarding cash deposited by Holocaust victims, Fagan, 49, is an international gadfly seen as a sort of Robin Hood by those he represents and as a legal vulture by the wealthy corporations he has called to account. He is part of a team of lawyers involved in both the slavery reparations case in the United States and the apartheid lawsuit, which goes before a judge in New York today in order to establish the roster of claimants and alleged conspirators.

2,000 HAVE REGISTERED

The apartheid lawsuit will be a class-action suit representing people who suffered direct loss or injury under apartheid. More than 2,000 people have already called the toll-free lines set up by Fagan's Apartheid Claims Taskforce to register claims, and Fagan went on a 30-day tour to black South African townships and rural areas in July to find those without access to transport and telephones.

Among the plaintiffs in the apartheid suit are members of the Petersen family. On June 16, 1976, Hector Petersen, a 13-year-old schoolboy, was shot and killed by police while taking part in a demonstration in Soweto. The photograph of the dying boy being carried through the streets by 17-year-old Mbuyiswa Makhabuso, followed by the boy's weeping sister Antoinette, was transmitted around the world and resulted in calls for sanctions against the apartheid government.

"We are working on the basis of a conspiracy theory, that a group of international corporations and banks threw the apartheid government a lifeline in the mid-'80s, when it was clear the regime was dying," says John Ncgebetsha,

the South African attorney working with Fagan.

Between 60 and 100 corporations, as well as Swiss and U.S. banks, could eventually become part of the suit. Two of the biggest Swiss banks, Credit Suisse and UBS, as well as the U.S.-based Citicorp, have already been named in a lawsuit filed in the United States on June 17. IBM and three German banks were added on July 1. Companies expected to be added to the suit include J.P. Morgan, Chase Manhattan Bank, Deutsche Bank, DaimlerChrysler, Siemens and Mobil.

The Swiss banks have dismissed the suit's claims as "preposterous," and the government in Bern has labeled the suit "another unjust attack against Switzerland."

But Ncgebetsha says it was bank loans and the business-as-usual attitude of these foreign multinational corporations that allowed the apartheid government to remain in power until 1994, when the first democratic black government came to power.

IBM, for example, will be called upon to pay up for allegedly supplying the apartheid government with computer equipment that allowed it to run the notorious Group Areas Act, the legislation that obliged blacks to live in squalid townships and criminalized their presence in white areas.

'SUBSTANTIAL' AMOUNT SOUGHT

No specific amount has been claimed in the apartheid case yet, although some analysts have said it could run as high as $100 billion. Fagan restricts himself to saying the amount sought will be "substantial."

"We are talking billions of dollars here. What we want is for that portion of profit that companies made doing business with the apartheid state to be set aside in a victims account," Fagan said. Rather than going directly to apartheid victims and their descendants, the money would be put in a trust to support community projects to benefit the poor.

Ncgebetsha says there is a close working relationship between those working on the U.S. slavery lawsuit and attorneys working on the apartheid case:

"There is a great flow of information between the U.S. slavery restitution case and what we are trying to accomplish here. The two cases will both seek damages based on the fact that torture and gross human violations, such as forced labor, took place."

The slavery reparations lawsuit accuses companies of profiting from the slave trade before it was abolished in 1865. So far, three major U.S. corporations -- insurer Aetna, railroad firm CSX and financial-services firm Fleet Boston -- have been named in that suit.

Legal experts have cast doubt on the slavery lawsuit's chances of success, saying it is beset with problems. The slave generation has died and the 50- year statute of limitations on suits has long since expired.

Jonathan Turley, a professor of constitutional law at George Washington University, says that of the two issues, apartheid reparations provide the stronger claim.

"Bringing a case on behalf of living victims is a great deal stronger than trying to claim damages from companies for actions that took place centuries ago," Turley says. "Both cases face big hurdles, but those in the slavery case are insurmountable."

Fagan disagrees but admits that the apartheid suit is more straightforward. Many of the victims are still alive to testify, and the companies have mounds of paperwork lurking in their archives, which could incriminate them by identifying their links with the Pretoria regime.

APARTHEID AND U.S. SLAVERY

While stressing that the slave suit and the apartheid claim are being fought separately and on their own merits, Fagan admits that the fact that his legal team is handling both cases is "no coincidence."

"We expect the apartheid suit to go quite fast," he says, "and if it does, the legal precedents set can be used in the slavery suit."

Turley, however, says that companies faced with such lawsuits should think carefully before settling. Although he believes the underlying issue of reparations is valid and says "these cases have great moral claims," he said that trying to pursue them in a personal injury lawsuit can only hurt the cause.

"It's pretty clear that this litigation is designed to put pressure (on sued companies to settle out of court) rather than to achieve a legal result," he says. "If I was legal counsel at one of these companies, I would not react well to such a claim. They have all the appearances of a holdup."

Fagan's lawsuit has sparked debate in South Africa over the issue of reparations. The Truth and Reconciliation Commission set up to heal the wounds of apartheid recommended in 1998 that the state pay $300 million to more than 21,000 victims of apartheid. Some victims have received interim payments but final payments have been delayed, stoking public anger and interest in Fagan's suit.

BELATED JUSTICE

But some have cautioned that the suit could raise unrealistic expectations. "Reparations are not going to make millionaires out of victims," said Neville Gabriel, a spokesman for Jubilee South Africa, a group assisting another group of claimants.

For the victims of apartheid and the descendants of slaves, however, a settlement often represents more than a financial windfall. Many see it as belated justice for wrongs committed when the perpetrators were acting within the law of the day.

Lulu Petersen, another sister of apartheid victim Hector Petersen, said when the apartheid claims were announced in South Africa: "We want reparations from those international companies and banks that profited from the blood and misery of our fathers and mothers, our brothers and sisters."

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