Apartheid Victims Sue

A U.S. lawyer who helped force Swiss banks into a $1.25 billion settlement for Nazi victims said Monday he would file suit against top Swiss and U.S. banks for propping up South Africa's former apartheid regime.

The announcement by Edward Fagan, a maverick lawyer known for his controversial tactics, was made amid high drama.

Fagan said he represented some 80 plaintiffs in South Africa. A telephone hotline had been set up to enable others to join the suits, which were to be filed in the U.S. District Court in Manhattan later Monday. South African lawyers working with Fagan said they expected thousands more to join.

A jeering, jostling crowd, angry at what they saw as just another attempt to smear Switzerland's good name, forced the media-savvy lawyer to abandon a news conference on Zurich's Paradeplatz, home of Credit Suisse's headquarters and the main Zurich offices of UBS, the country's two biggest banks.

Fagan he was seeking reparations in a class action suit against UBS and Credit Suisse as well as U.S.-based Citicorp Inc., which owns Citibank.

He alleges the banks provided funds to the apartheid government between 1985 and 1993, when the regime was running short of cash because of United Nations sanctions. The banks have dismissed the claims as completely unjustified.

"The day of reckoning has arrived," Fagan later told reporters after moving the news conference to a local hotel. "This is only the beginning," he said, adding that suits were planned against other Swiss and U.S. firms and companies in France, Britain and Germany.

The Swiss banks have said Fagan's claims had no legal basis. "Attaching responsibility would not only be preposterous but unsubstantiated by the facts," a CS spokeswoman said Sunday.

The Swiss government also dismissed the suit. "It's another unjust attack against Switzerland," Foreign Ministry spokesman Ruedi Christen told Reuters.

Investors appeared to be similarly unimpressed. UBS shares ended the day up 3.2 percent, while Credit Suisse rose 2.5 percent in a generally firmer Swiss market.

Fagan was accompanied by Dorothy Molefi, the mother of Hector Petersen, a 13-year-old boy who was shot by police during a popular uprising against apartheid in June 1976. The photograph of a man carrying Hector's dead body became a symbol for the fight against South Africa's violent regime.

"Hector had the unfortunate distinction of being a sacrifice in this huge struggle," Fagan said, his arm casually draped around Molefi's shoulders. The mother, choking with tears, said she had never come to grips with her son's killing.

"Even today it is not easy," Molefi, one of the lead plaintiffs, whispered.

"Fagan go home" and "Wash your dirty linens elsewhere" were some of the politer remarks hurled at Fagan by the mostly elderly crowd on the Paradeplatz, incensed by what they saw as an effort to drag Switzerland's image through the mud.

"He's a rascal, a stinking lawyer who's only after the money," said one elderly man. Fagan was jeered and pushed by the crowd until he fled the square in a black Mercedes taxicab.

Fagan said the protests were outrageous and criticized police for not protecting him better.

Fagan made a name for himself by representing victims of the Nazis and their heirs who sued Swiss banks in the 1990s for their alleged role in financing the Holocaust.

In 1998, Swiss banks settled the case for $1.25 billion. The case triggered massive international pressure on neutral Switzerland to account for its dealings with the Nazi regime.

The case is filed under a U.S. law that allows non-U.S. citizens to file human rights suits against companies that operate in the United States, which UBS and Credit Suisse do.

Fagan's suit alleges that the banks "profited from the human rights violations and crimes against humanity committed against blacks in South Africa" under apartheid.

Jubilee South Africa, a lobby group campaigning for reparations, said this was the first of many court actions by those who suffered during apartheid.

"Today marks a turning point. German, British, French and South African banks and businesses will be similarly challenged...in the months to come," it said in a statement.

Apartheid was an oppressive web of racist laws starting in 1948 that classified all South Africans by race and stripped even the most basic rights from those who were not white.

As efforts to overthrow the white regime grew, authorities began jailing some opponents, killing others without trial and chasing still others from their homes. The regime ended in 1994 with the election of Nelson Mandela as president in the nation's first all-race elections.

Lawyers said the three targeted companies helped prop up the white government, which was struggling as foreign capital fled the country, with loans and other business deals worth billions of dollars. The help came even after the United Nations asked all member states to break off diplomatic, trade and transport relations with South Africa in 1962.

"Were it not for the conspiracy of these financial institutions and companies, apartheid would not have been kept alive," the lawsuit said. "Were it not for the conspiracy of these financial institutions and companies, men, women, children and families would not have suffered from forced removals, forced labor, imprisonment, banishment, kidnapping, torture, disfigurement, murders, massacres, psychological trauma and terror."

The lawyers declined to say how much they were seeking in damages, but said they expected billions of dollars. That money would not be distributed to individuals, but used collectively to help alleviate the impact of apartheid by building schools or houses, for example, said Diane Sammons, a U.S. lawyer working on the case.

"When everybody else was divesting, the Swiss banks took up the cause and added much more money," she said. "They continued to profit from these crimes against humanity, torture, murder."

After his brief appearance in Zurich, Fagan immediately turned his attention to another high-profile and potentially lucrative case, this one in Salzburg in neighboring Austria.

There, Fagan hopes to win over relatives of the 155 people killed in the Kaprun ski train blaze of November 2000 to file a massive lawsuit for damages in a U.S. court. The criminal trial of 16 people for the Kaprun fire starts in Salzburg Tuesday.