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Published May 20, 2015
A lawsuit launched Tuesday against several international banks and U.S. corporations alleges that financial support of and business deals with the apartheid government in South Africa from 1960 to 1994 was "encouraging and furthering the abuses" of the racist regime.
Brought by the law offices of Cohen, Milstein, Hausfeld & Toll on behalf of the South African Khulumani Support Group and 84 direct victims of apartheid, the lawsuit names Citigroup, the largest financial institution in the United States, as well as Swiss banks UBS and Credit Suisse.
The suit also names J.P. Morgan Chase, Ford Motor Company, IBM, Exxon Mobil, General Motors, British Petroleum, Royal Dutch Shell in the Netherlands, and a host of other international banks and corporations.
"Each of those industries, in their own right, had participated in apartheid," said attorney Michael Hausfeld, who worked on successful litigation during the 1990s against Swiss banks that held assets belonging to Jewish victims stolen by Nazis during the Holocaust.
Most of the defendants reached Tuesday said they did not yet have a chance to read the complaint, but others began dismissing the claims right away.
"Based on what we have seen in news reports ... we believe the suit is without merit," said Carol Makovich of IBM, one of the world's largest computer system and software manufacturers.
Christina Pretto, a spokeswoman for Citigroup, gave a nearly identical response.
Beginning as far back as 1913 under the all-white government of the Commonwealth of South Africa, apartheid developed into a system of laws based on racial classification in which black Africans were forcibly relocated to ghetto areas and subject to job and property restrictions, educational segregation and judicial repression.
Plaintiffs in this lawsuit tell personal stories of torture, sexual assault, indiscriminate shootings, and arbitrary detainments – many are the surviving family members of dead victims of the regime.
While numerous U.N resolutions condemned apartheid as perpetuating "crimes against humanity," and for decades called for oil and trade embargos, there were never any mandatory sanctions against the regime aside from an arms embargo imposed in 1977. Apartheid fell apart in 1994 after increased pressure by international governments and voluntary embargoes.
Those banks and businesses that operated within the South African regime before then "aided and abetted" the abuses, according to the lawsuit.
"[The defendants'] conduct was so integrally connected to the abuses that apartheid would not have occurred in the same way without their participation," alleges the complaint, which was filed in the U.S. District Court for the Eastern District of New York.
UBS President Peter Wuffli on Tuesday said his bank regrets the events that took place in South Africa during those years, "but there is no connection between the suffering of victims and the activities of the bank."
Both UBS and Credit Suisse have long maintained that their South Africa dealings were in conformity with Swiss law. These two banking giants had agreed to an unprecedented $1.2 billion settlement to survivors of Holocaust victims in 1998 as a result of lawsuits brought in part by Hausfeld, as well as attorney Ed Fagen.
In June, Fagen launched his own lawsuit against the two banks, as well as Citigroup and several international corporations, calling for as much as $50 billion for more than 5,000 victims of apartheid.
Fagen is also behind a $1.4 trillion lawsuit filed in March against numerous American corporations alleging they profited from slavery in the United States 137 years ago.
Unlike Fagen, Hausfeld said his apartheid complaint is not seeking specified damages, though he hopes it results in some compensation for the victims. The main goal of the suit, he insists, is to educate the world and put corporations on notice that they cannot be complicit in the human rights abuses of such regimes and get away with it.
"All the lawsuit seeks to do is say if you act in a matter that decreases human well-being you will be held accountable," Hausfeld said.
But James Swanson, editor-in-chief of the Cato Institute's Supreme Court Review, said unlike the Holocaust lawsuit against the Swiss banks and the 1990s reparations suits won by Japanese-Americans interned by the U.S. government during World War II, it may be harder to prove that corporations were directly complicit in murder and torture of South Africans.
"For American corporations that did not imprison them or abuse them, the link is less clear," he said. "This creates very complicated questions of comparative law and international law."
However, "it is potentially very dangerous [for corporations], if not from a strictly legal point of view, but from a public relations and image point of view," Swanson added, noting that the plaintiffs will think seriously about settling the matter out of court whether they feel they are guilty or not.
"This could be viewed as either an advance in human rights or a shakedown of deep pockets," he said.
He noted that such lawsuits, if settled, could open up a floodgate of lawsuits against any totalitarian regime that exists today – including those of the Sudan, China or Cuba.
When asked about the future of such litigation, Hausfeld did not deny that could be the case, but said, "I'd like to concentrate on what we are doing presently and not speculate on what we would be doing next."
https://www.foxnews.com/story/corporations-sued-by-apartheid-victims