/ 19 July 2002

There’s money in horror

‘Some call me the devil,” proclaims Ed Fagan delightedly. We are in a Cape Town Waterfront hotel and Fagan, a showman, is enjoying himself as he details the multibillion-dollar class action he has launched against foreign companies accused of propping up apartheid, including Credit Suisse, DaimlerChrysler and IBM. ”I’m not the devil — but I can be,” says Fagan. ”The devil’s a guy who does a job and gets a bad rap.”

Judging by the fury this brash New Yorker stirs up, some feel he is worse than Beelzebub. But then Fagan is the lawyer who forced Swiss banks and German companies to pay $6,75-billion in two famous Holocaust class action cases. Now he fronts the Apartheid Claims Taskforce, which has filed a class action suit in a New York court.

Reactions have been eye-opening. South Africa’s ambassador to Switzerland rushed to distance the African National Congress from the case, saying her government ”had never supported” such actions. Minister of Justice and Constitutional Development Penuell Maduna, who had been briefed on the case, also poured cold water on it by informing local German businessmen that it was simplistic to see all blacks as victims of apartheid.

Predictably, some critics have said the case may discourage investment in South Africa and ”other developing countries”. Ironically, this echoes the justification for doing business here during apartheid.

But the case also stirs up other anxieties, for it threatens to reopen wounds. Such uneasiness can be seen in the response from former president FW de Klerk. ”Although the case has little substance and is unlikely to succeed,” he wrote, ”it does have the potential to cause real harm.”

One reputation that risks harm is De Klerk’s. Among the plaintiffs is Sigqibo Mpendulo, the father of twin boys who were killed with three teenage friends in a botched raid in the Transkei. The foray had been approved by De Klerk, who later mistakenly announced its success. That was in October 1993. The following month De Klerk travelled to Oslo to receive, jointly with Nelson Mandela, the Nobel Peace Prize.

”Mandela intervened and persuaded the families of the murdered students to drop the case and accept an out-of-court settlement,” revealed Terry Bell in his recently published Unfinished Business: South Africa, Apartheid & Truth. ”De Klerk ordered the payment of a large sum of state money in compensation and a convenient blanket of silence fell over the massacre.”

As Fagan acknowledges, his New York case is based on this book, written with former Truth and Reconciliation Commission (TRC) investigations unit head Dumisa Ntsebeza. It is hardly surprising that De Klerk complains the apartheid reparations claim ”might sweep up old passions and animosities that we have been trying, quite successfully, to resolve since 1990”. Nor is he the only politician concerned to sweep away old passions.

President Thabo Mbeki is believed to be about to grant a general amnesty to most perpetrators of human rights abuses during the apartheid era. As the TRC process allowed for amnesty only in cases of full disclosure and, as most apartheid generals and politicians did not deign to appear before the commission, they are still liable for prosecution. A general amnesty would close that chapter.

There is also the thorny question of the role of local business during apartheid. The TRC found that while some firms, notably the mining industry, helped design and implement apartheid policies, others benefited by cooperating with the security forces — and, crucially, most gained from operating within a racially structured context. So far TRC recommendations for compensation for the victims have fallen on deaf ears.

Clearly, it would be extremely awkward for the ANC to see victims of apartheid having to petition a New York court for any financial recompense for their suffering.

Thus far an investment in Fagan has been a blue-chip risk. Even on a ”no win no fee” basis, he has no shortage of backers. In the Holocaust case his financiers reportedly made a 200% profit. There’s money in horror.

It is perhaps the ultimate irony that the victims of apartheid may finally get some recompense only from corporations that exploited their suffering thanks to the logic of the free enterprise system. It’s a devil’s pact.

In 1973 a British journalist, Adam Raphael, published a devastating exposÃ