"The
basic moral problem that faces man as he moves into the age of
automation, the age of accelerating conquest of nature, is whether
he is really fit to live in an industrial society; whether his
institutions will adjust rapidly enough; whether he will rivet
himself with an absurd institution like full employment in the
economic order when it is not only unnecessary but unadministratable
in anything but a slave society; whether freed from the necessity to
devote his brain and brawn to the production of goods and services,
he can address himself to the work of civilization itself." (Louis O. Kelso, 1964)
ESOP: Employee Stock Ownership Plan. The
ESOP is designed to build capital ownership into employees of a
business in the course of efficiently financing its growth or
other worthwhile corporate objectives, without touching employee
paychecks or savings. As to employees, the ESOP is that
constitutionally-mandated missing link that gives them access to
credit to buy the employer's capital stock and, without personal
risk or liability, to pay for it from the pre-tax earnings of
the assets underlying that stock. In other words, equalizing
their access to capital credit with that of the already rich.
MUCOP: Mutual Capital Ownership Plan.
This financing method is intended to provide pooled ESOP
financing for a number of corporations while building
diversified portfolios of their stocks individually for their
employees.
CSOP: Consumer Stock Ownership Plan. This
technique is intended for use by public utilities, banks,
insurance companies, and other businesses where long-term
relationships between the producer and its customers are the
rule. Through the intelligent use of credit, it builds capital
ownership for customers while providing unlimited low-cost
financing for growth of the corporation, thus raising the power
of the consumers to pay for their purchases of goods and
services while raising the power of the corporation to produce
goods and services. It would normally be used in conjunction
with an ESOP for employees.
GSOP: General Stock Ownership Plan. The
GSOP is designed to build capital ownership into politically
designated classes of consumers within the jurisdiction of the
authorizing government - state, local or federal.
ICOP: Individual Capital Ownership Plan.
A financing device intended to create viable capital estates for
selected categories of individuals while opening broad markets
for equity financing by corporations.
RECOP: Residential Capital Ownership
Plan. This financing plan, in combination with commercially
insured credit financing, would enable home buyers to purchase
homes at less than 25 percent of the out-of-pocket principal and
interest cost of similar transactions today, by having their
acquisitions treated by tax and other relevant laws as capital
assets, rather than as consumer items as at present
COMCOP: Commercial Capital Ownership
Plan. Ownership of rental structures, such as office and
apartment buildings, factories, mines, railroads, hotels,
resorts, etc., is a major source of capital cash income. Today
such structures and real estate generally are owned by the
excessively wealthy (whose resulting income is thereby
sterilized for purposes of the consumer economy and denied to
those who could use it if the financing had been COMCOP
structured), who use such acquisitions not only to satisfy their
antisocial greed, but to wipe out their income taxes. COMCOP
would enable commercial structure ownership legitimately to be
spread over large numbers of people where it can raise their
power to produce the incomes they need to make them powerful and
self-supporting consumers, maintain their lifestyles, and to
diversify their holdings in businesses in which they become
employed as capital workers.
PUBCOP: Public Capital Ownership Plan.
This plan is designed to provide low-cost financing for capital
instruments used by public bodies of all types - office
buildings, streets and sidewalks, parks, street lighting,
schools, universities, subways, waterworks, harbors, etc. It
permits broad individual ownership, through facilities
corporations, by great numbers of people, while providing
low-cost capital facilities to be leased at market rates to
cities and other municipal corporations, states, the federal
government, and other public bodies. PUBCOP is another tool in
the arsenal of binary economics to assure that each individual
can become employed as a capital worker and that governments do
not acquire economic power that should be diffused throughout
the citizenry. PUBCOP financing would employ the dual functions
of binary financing devices. It would be a major means of
eliminating the cost of wasteful, inefficient, and inadequate
public employee pensions while providing much greater economic
security and incomes, both before and after retirement, to
public employees and others.
All of these plans are discussed and diagramed
in more detail in Democracy and Economic Power: Extending the
ESOP Revolution through Binary Economics.
All rights reserved under
International and Pan American Copyright Conventions.
Library of Congress Catalog
Card Number:61-6562
Louis Kelso's books,
The Capitalist Manifesto
and The New Capitalists,
are now available to download in PDF form. You will need the
Adobe Acrobat Reader to view and print them.
The Capitalist Manifesto
and The New Capitalists together
comprise the first public statement of Louis Kelso's seminal
contribution to political economics - a thesis Mortimer J.
Adler, the co-author, declared "the first clear and systematic
statement of the idea of capitalism that has ever been presented
to the world."
Despite its Cold War title,
The Capitalist Manifesto of 1958
is neither a defense of traditional capitalism nor a polemical
call to revolution in the style of The
Communist Manifesto of 1848. It is a theoretical
blueprint of the physical and institutional structure of the
western private property, free market system identified by Adam
Smith and the classical economists; repudiated by Karl Marx and
the socialists,
and pragmatically compromised by J. Maynard Keynes. It presents
specific proposals for correcting and perfecting the present
system in the line of, and in the light of, its own logic and
principles. It invites men and women of good will to set to work
on the task of building an economically just and generally
affluent society on the foundation of a Capitalism redeemed of
its historical flaws.
Louis Kelso's vision of Capitalism was, in Dr.
Adler's description, "the economically free and classless
society which supports political democracy and which, above all,
helps political democracy to preserve the institutions of a free
society." To Dr. Adler's mind, this conception was "the most
revolutionary idea of the century."
Ten years after his death Louis Kelso is
beginning to be recognized as the originator of a genuinely new
paradigm in political economics. Although introduced more than
forty years ago, its concepts are still virgin terrain because,
despite their osmotic influence in the United States, western
and eastern Europe, Russia and now China, relatively few people
are familiar with them.
Make no mistake, Louis Kelso's ideas are just as
controversial today as when he and Dr. Adler introduced them in
1958. The Austrian economist Schumpeter famously defined
Capitalism as "creative destruction." That is also the effect of
a new paradigm on its parent discipline. Louis Kelso's new
paradigm targets, first of all, the conventional premises of
economics. But since those premises are also embedded in western
political, economic and business institutions, particularly the
institutions of finance, Louis Kelso's binary view exposes the
fallacies at their heart as well.
In showing the obsolete ideas at the root of key
institutions - the institutions that concentrate wealth and
frustrate the operating logic of the free market - Louis Kelso
changes the terms of the age-old debate between Conservatives
and Liberals and Capital and Labor. And in doing that, he moves
to new and higher ground the ideological issues that have made
western society a battleground ever since the Industrial
Revolution. To understand Louis Kelso's binary paradigm is to
look at the economic and political world with new eyes, from an
exhilarating new perspective. The social implications of this
new view are revolutionary in the best sense of that word.
Louis Kelso was fascinated by technology. He
began his investigation of the Great Depression with painstaking
research on the effects of technological change on occupations,
industries and the macro-economy. While still in law school, he
published a monograph on how the computer, hardly invented then,
would revolutionize the practice of law. He eagerly looked
forward to the day when the computer would make instantaneous
world-wide communication possible. Unfortunately he died a few
years before the Internet could make this a reality for him.
Now as we enter the new century and the new
millennium, Louis Kelso's binary economic paradigm is even more
important than when first introduced. The demise of the Soviet
Union has left the western market economy free to dominate the
world on its own terms. Understanding market forces and learning
how to exploit them to build stable industrial democracies that
are also Good Societies for everyone who lives in them is our
most urgent task. Louis Kelso has given us the tools - both
conceptual and practical - to accomplish this task. He has also
inspired us with his generous vision of the Good Society that
advanced technology still promises despite centuries of
misunderstanding and misuse.
In gratitude for the life and work of
Louis Kelso, and also in honor of his co-author, the late
Mortimer J. Adler, whose encouragement and collaboration made
these books possible, the Kelso Institute takes great pleasure
in electronically publishing both
The Capitalist Manifesto and The New Capitalists.
In so doing, we fulfill Louis Kelso's dearest wish in life -
that his ideas be made accessible to those who will use them to
build institutions that advance civilization and support
individuals in realizing their highest potential.
Louis
O. Kelso and Patricia Hetter Kelso estimates of the relative real inputs to
production in the American economy of Labor (Physical and Intellectual) and
Capital over time assuming reasonably competitive markets. So ingrained is
the “ethic” of the “Labor Theory of Value” that they thought it best to
refer to Capital Owners as “Capital Workers” in keeping with their
understanding that Capital instruments do “Work” - as surely as the most
diligent human surrogate worker – and that indeed the observable trend is
for Capital Instruments to do ever more of the Worlds “Work”. The reflexive
prevalent attitude of equating “Economic” man with Essential Human Values
including the whole vast array of values around the “Work Ethic” all
contribute to camouflage and maintain the fundamental miss-match between the
way goods and services are produced and distributed and particularly their
trends projected into the future. Cybernetic contributions (now almost
exponential) are only adding to the much longer Historical trend. Represents
US Economy but applies to World trending. HHC
Chart of
concentration of capital ownership in the U.S. over time. The same general
pattern applies to virtually all economies of and the World Economy as a
whole – Plutocratic ownership and control of the real means of production.
With “The Labor Theory of Value” it only worsens. HHC - Below Quotes @
www.kelsoinstitute.org
"Conventional wisdom says there is only one
way to earn a living, and that's to work. Conventional wisdom effectively
treats
capital (land, structures, machines, and the
like) as though it were a kind of holy water that, sprinkled on or about
labor, makes
it more productive. Thus, if you have a
thousand people working in a factory and you increase the design and power
of the
machinery so that one hundred men can now do
what a thousand did before, conventional wisdom says, 'Voila! The
productivity
of the labor has gone up 900 percent!' I say
'hogwash.' All you've done is wipe out 90 percent of the jobs, and even the
remaining
ten percent are probably sitting around
pushing buttons. What the economy needs is a way of legitimately getting
capital
ownership into the hands of the people who
now don't have it." (Louis O. Kelso, Journal Asset Based Finance,
1982)
"The trouble with today's techniques of
finance is that they're designed to make the rich richer. None are designed
to make the
poor richer. That's why the poor are poor.
Because they're not rich." (Louis O. Kelso, San Francisco Examiner &
Chronicle, 1978)
"The Roman arena was technically a level
playing field. But on one side were the lions with all the weapons, and on
the other
the Christians with all the blood. That's not
a level playing field. That's a slaughter. And so is putting people into the
economy
without equipping them with capital, while
equipping a tiny handful of people with hundreds and thousands of times more
than they can use." (Louis O. Kelso, Bill Moyers: A World of Ideas,
1990)
Louis O. Kelso (1913-1991) was a
lawyer
and
economic thinker who sought to find a way to preserve
capitalism from the competition of
communism as an alternative within the context of the early
Cold War.
Louis O. Kelso (1913-1991) was a
lawyer
and
economic thinker who sought to find a way to preserve
capitalism from the competition of
communism as an alternative within the context of the early
Cold War.
His non-conformist "capitalism" might be compared to the
peoples' capitalism ideas of
G. K. Chesterton in which ownership is distributed to as many people
as possible within the economy. Kelso developed the idea of
Binary Economics to explain the need for expanded capital ownership
in light of industrial production and the dominance of capital instead
of labor.
In 1956 Louis Kelso invented the Employee Stock Ownership Plan (ESOP)
to put his ideas into practice. In 1958 he collaborated with the
philosopher
Mortimer Adler to write The Capitalist Manifesto that is
considered the primary source of his economic theories. Kelso and Adler
followed this book with The New Capitalists (Random House, New
York: 1961). Both books are readable online from the Kelso Institute.
The distributive dynamics of capitalism by Louis O Kelso,
self-published; 2nd edition (1956)
The Capitalist Manifesto, by Louis O. Kelso and Mortimer
J. Adler, Random House, New York: 1958; reprinted Greenwood Press,
Westport, Connecticut: 1975. Also published in French, Spanish,
Greek and Japanese.
ISBN 0-8371-8210-7
The New Capitalists: A Proposal to Free Economic Growth from
the Slavery of Savings, by Louis O. Kelso and Mortimer J. Adler,
Random House, New York: 1961; reprinted Greenwood Press, Westport,
Connecticut: 1975. Also published in Japanese.
ISBN 0-8371-8211-5
Two-Factor Theory: The Economics of Reality, by Louis O.
Kelso and Patricia Hetter, Random House, New York: 1967; paperback
edition, Vintage Books: 1968. (Originally published under the title
How to Turn 80 Million Workers into Capitalists on Borrowed Money.)
Also published in Spanish and German.
Democracy and Economic Power: Extending the ESOP Revolution
Through Binary Economics, by Louis O. Kelso and Patricia Hetter
Kelso, Ballinger Publishing Co., Cambridge, Massachusetts: 1986;
reprinted by University Press of America, Lanham, Maryland: 1991.
Also available in Russian and Chinese.
ISBN 0-8191-7909-4
WRITINGS BY LOUIS O. KELSO
Karl Marx: The Almost Capitalist, American Bar Association
Journal, March, 1957.
[2]
Corporate Benevolence or Welfare Redistribution?, The Business
Lawyer, January, 1960.
Labor's Great Mistake: The Struggle for the Toil State, American
Bar Association Journal, February, 1960.
Welfare State - American Style, Challenge, The Magazine of
Economic Affairs, New York University, October, 1963.
The Case for the 100% Dividend Payout, Trends (published by
Georgeson & Co.), New York, December, 1963.
Poverty and Profits, by Hostetler, Kelso, Long, Oates, the
Editors, Harvard Business Review, September-October, 1964.
Beyond Full Employment, Title News (the Journal of the American
Land Title Association), November, 1964.
Cooperatives and the Economic Power to Consume, The Cooperative
Accountant (published by the National Society of Accountants for
Cooperatives), Winter, 1964.
Why Not Featherbedding?, Challenge, September-October 1966.
(Reprinted in American Controversy: Readings and Rhetoric, by Paul
K. Dempsey and Ronald E. McFarland, Scott, Foresman and Company,
Glenview, Illinois: 1968.)
The Economic Foundation of Freedom, The American Prospect:
Insights into Our Next 100 Years, Houghton Mifflin Company, Boston:
1977.
Labor's Untapped Wealth: An Address by Louis Kelso, Air Line
Pilot, October, 1984.
WRITINGS BY LOUIS O. KELSO AND PATRICIA HETTER KELSO
Uprooting World Poverty: A Job for Business, Business Horizons,
Fall, 1964. (Reprinted in Mercurio, Anno VIII, No. 8, Rome, Italy,
August, 1965; Far Eastern Economic Review, Vol. L, No. 1, Hong Kong,
October, 1965. Winner of the First Place 1964 McKinsey Award for
Significant Business Writing.)
Poverty's Other Exit, North Dakota Law Review, January, 1965.
Equality of Economic Opportunity Through Capital Ownership,
Social Policies for America in the Seventies, edited by Robert
Theobald, Doubleday & Co., New York: 1968. (Excerpts from this essay
reprinted in Current, April, 1968.)
Reparations and the Churches, Business Horizons, December, 1969.
Invisible Violence of Corporate Finance, The Washington Post,
June 18, 1972.
Man Without Property, Business and Society Review, Summer, 1972.
Corporate Social Responsibility Without Corporate Suicide,
Challenge, July-August, 1973.
Employee Stock Ownership Plan, Business & Government Insider
Newsletter, July 30, August 6 and August 13, 1973.
Employee Stock Ownership Plans: A Micro-Application of
Macro-Economic Theory, The American University Law Review, Spring,
1977.
The Greatest Financial Planning Tool of All . . . Could ESOP
Save General Motors?, The Financial Planner, November, 1981.
Sychophantasy in Economics: A Review of
George Gilder's Wealth and Poverty, The Great Ideas Today,
Encyclopœdia Britannica, Inc., Chicago: 1982.
The Right to Be Productive, The Financial Planner, August and
September, 1982.
Tax Reform Is Not the Answer, Chief Executive, Spring, 1983.
How We Can Achieve Lifetime Employment, Chief Executive, Autumn,
1983.
Damning Binary Economics With Faint Praise, Workplace Democracy,
Summer, 1987.
Leveraged Buyouts Good and Bad, Management Review, November,
1987.
The Great Savings Snafu, Business and Society Review, Winter,
1988.
Why Owner-Workers Are Winners, The New York Times, January 29,
1989.
Why I Invented the ESOP LBO, Leaders, October/November/December,
1989.
Don't Meddle With ESOPs, The Journal of Commerce, October 2,
1989.
Looking in a Marxist Mirror, The Journal of Commerce, January
11, 1991.
ALSO RECOMMENDED - BOOKS
Curing World Poverty: The New Role of Property, edited by John
H. Miller, C.S.C., S.T.D., Social Justice Review, St. Louis: 1994.
Binary Economics: The New Paradigm, by Robert Ashford and Rodney
Shakespeare, University Press of America, Lanham, Maryland: 1999.
ALSO RECOMMENDED - WRITINGS
The ESOP According to Kelso, by Stuart Nixon, Air Line Pilot,
October, 1984.
The World According to Kelso, by Steven Hayward, Inland
Business, April, 1987.
Louis Kelso, Capitalist, Bill Moyers: A World of Ideas II,
edited by Andie Tucher, Doubleday, New York: 1990.
The Binary Economics of Louis Kelso: The Promise of Universal
Capitalism, by Robert H. A. Ashford, Rutgers Law Journal, Vol. 22,
No. 1, Fall, 1990.
Louis Kelso's Binary Economy, by Robert Ashford, The Journal of
Socio-Economics, Vol. 25, No. 1, 1996.
Binary Economic Modes for the Privatization of Public Assets, by
Jerry N. Gauche, The Journal of Socio-Economics, Vol. 27, No. 3,
1998.
A New Market Paradigm for Sustainable Growth: Financing Broader
Capital Ownership with Louis Kelso's Binary Economics, by Robert
Ashford, Praxis: The Fletcher Journal of Development Studies, Vol.
XIV, The Fletcher School of Law and Diplomacy, Global Development
and Environment Institute, Tufts University, Medford, Massachusetts:
1998.
The Theory of Productiveness: A Microeconomic and Macroeconomic
Analysis of Binary Growth and Output in the Kelso System, by Stephen
V. Kane, The Journal of Socio-Economics, Vol. 29, No. 6, 2000.
The Ultimate Management Team, by Chris Bayers, WIRED, January,
2002.
Employee Ownership and Corporate Performance: A Comprehensive
Review of the Evidence, The Journal of Employee Ownership Law and
Finance, Vol. 14, No. 1, National Center for Employee Ownership
(NCEO), Oakland, California: 2002.
Binary Economics, Fiduciary Duties, and Corporate Social
Responsibility: Comprehending Corporate Wealth Maximization and
Distribution for Stockholders, Stakeholders, and Society, by Robert
Ashford, Tulane Law Review, Vol. 76, No. 5-6, June, 2002.
"The Roman arena was technically a
level playing field. But on one side were the lions with all the
weapons, and on the other the Christians with all the blood. That's
not a level playing field. That's a slaughter. And so is putting
people into the economy without equipping them with capital, while
equipping a tiny handful of people with hundreds and thousands of
times more than they can use."
--Louis O. Kelso in
Bill Moyers: A World of Ideas, (1990)
Con Man and Snake
Oil Salesman Ed Fagan Tries To Shut Down
Parentadvocates.org., Lewenstein Serves Subpoena
on Gizella Weisshaus 30 New York
City teachers confined to 'rubber rooms' in New
York City hire Ed Fagan to represent them in
Federal Court, despite the hard work of Randi
Weingarten and her 'SWAT' Team to gather the
information needed for a fair and just
resolution of their issues to proceed. Mr. Fagan
is about to be disbarred in New Jersey, is
bankrupt with $13.6 million in outstanding debts
and in bankruptcy , and joined his ex-wife in a
lawsuit against his ex-wife's partner, Margie,
and Margie's parents, grandparents, etc., for
$20 million. Full disclosure: his first and
probably most famous client was holocaust victim
Gizella Weisshaus, my friend for more than 10
years. On February 20, 2008, Plaintiff Florian
Lewenstein served a subpoena on Gizella
Weisshaus at her home in an effort to intimidate
her and stop her from giving out information
about Ed Fagan. I guess neither Florian nor Ed
know Gizella very well.
by Betsy Combier
Ed
Fagan, picture courtesy of Black
Star News
From the desk of Betsy
Combier:
DISCLAIMER: All information in this article,
including the information on the blog
"NYC Rubber Room
Report", is
already posted on the internet or was given
to me by Gizella Weisshaus, a friend of mine
for more than 10 years. In determining what
is "true", I ask the reader to consider
this: Mr. Ed Fagan has never spoken with
Gizella Weisshaus since he "stole" (her
words) her $82,000+. He calls her a liar
without clarifying what she is lying about.
We are not saying anything about Ed Fagan
that has not been documented by evidence and
witnesses.
A lawsuit was filed against me, Michael
Bloomberg, Joel Klein, Randi Weingarten, and
the "United Federation of DOE staff"
(whatever that is) on February 22, 2008,
with Index number 08 CIV 0548, in United
States District Court For the Southern
District of New York. I was sued for writing
this article about Ed Fagan, which I have
done to help the victims of the actions of
Ed Fagan in the Swiss bank case, one of whom
I know quite well, Gizella Weisshaus. I have
re-posted material already published
elsewhere, or given and verified by me and
other people connected with Mr. Fagan. I
have made nothing up, nor am I out to "get"
anyone. I also have put this article
together without the assistance of
anyone else except concerned
non-parties to the lawsuit who have kindly
sent me the documents you see on this
website, in my capacity as a reporter and
editor, so the following statement is not
true (in
a memo sent out by email to almost 100
people):
"Ms. Combier is not working on her own, but
her work is clearly being supported and
orchestrated by other parties...She does not
have the time or the resources to invest in
putting together the material she published
so shortly after our last court hearing."
Gizella Weisshaus wanted to attend the
hearing, so I did too, on February 8 in
Federal Court which is open to the public,
Mr. Fagan.
At approximately 5PM on Wednesday, February
20, 2008, Mr. Ed Fagan showed up at UFT
headquarters and tried to serve a subpoena
against me and this website. No one would
accept this service, and Ed Fagan left. At
approximately 9 PM the same night, Florian
Lewenstein barged into the apartment of
78-year old holocaust victim Gizella
Weisshaus and
served her with a
subpoena demanding
"Any documents in your possession, custody,
and control related to:
(1) The attached article published on or
about February 18, 2008 (this article that
you are reading right
now -Ed.)
(2) Edward D. Fagan, Elizabeth Silver Fagan,
Margaret E. Rogers, Jeffrey Plaza, Levy,
Erlich & Petriello, Gizella Weisshaus, The
Kaprun Ski Train Case, Fagan's bankruptcy,
NJ Office of Attorney Ethics, Ed Fagan's
business or cases in NY;
(3) emails or faxes or phone records upon
which the above article is based or related
to any of the ? or people mentioned in Item
#2 above."
Lewenstein gave stunned Mrs. Weisshaus $40
to appear in "March 2008" at 5 Penn Plaza,
23rd Floor (where there are no offices,
apparently, according to the custodian of
the building). I called the Defendant in the
caption, Mr. Plaza, friday, February 22,
2008, and he was stunned to hear that a
subpoena had been served in the case Ed
Fagan filed in 2007 (see subpoena).
Milton Allimedi, Publisher of Black Star
News, published the article below on Ed
Fagan on January 30, 2008:
"Says Disbar Holocaust Attorney
By Milton Allimadi, January 30th, 2008
LINK
Following a complaint for misappropriating
money from escrow accounts, a Special Ethics
Master in New Jersey has recommended the
disbarment of Edward Fagan, the attorney who
became famous when he filed the Swiss banks
case on behalf of Holocaust survivors in
1996.
The Black Star exclusively reported the
investigation of Fagan on January 25, 2005.
After the Swiss banks case was settled for
$1.25 billion in 1998, Fagan gained global
notoriety. He even discussed representing
African American organizations working on
legal action against the US government for
Slavery reparations and groups in South
Africa seeking action against foreign banks
that helped sustain apartheid regimes.
In recent years, Fagan’s reputation has gone
into a freefall. For years the first client
he represented on the Swiss banks case,
Holocaust survivor Gizella Weisshaus, 78,
had alleged that Fagan stole money from the
escrow account of her dead cousin Jack
Oestreicher.
Fagan was later accused of misappropriating
some of the $500,000 settlement money he had
secured from the Swiss banks on behalf of
another one of his elderly clients,
Estelle Sapir,
another elderly Holocaust survivor. He
continued spending the money from an account
he controlled even after Sapir died, it was
alleged.
Fagan was accused of misappropriating a
total of $122, 582; from the Oestreicher
account and from Sapir. He was also accused
of improperly disbursing $303,582 from
Sapir,
by the New Jersey Office of Attorney Ethics.
Fagan “knowingly misappropriated $40,000”
from Oestreicher’s New York Estate, on March
27, 1996 and “misappropriated $82,582 of the
Sapir Settlement funds that he maintained in
his New Jersey Summit Bank account on August
19, 1998,” read the complaint from the New
Jersey Office of Attorney Ethics.
In the 2005 article, The Black Star reported
that it was only after his client Sapir had
died that out of the $500,00 he secured on
her behalf that Fagan sent some money to her
family to cover funeral cost---$7,300.
In his defense in the New Jersey ethics case
Fagan argued that he had oral agreement to
“borrow” the funds, separately, from his
clients, Weisshaus and Sapir. Hearings on
the matter were conducted between November
15, 2005 and April 19, 2007.
In his January 24, 2008 recommendation
Special Ethics Master, Arthur Minuskin,
concluded that Fagan had “lied by claiming
he had unlimited authority to use the
$82,582 given to him” by Gizella Weisshaus
from the Oestreicher estate and that Fagan
“lied by claiming he had unlimited authority
to use the Sapir settlement funds; he also
improperly disbursed $305, 582 of those
funds.”
Weisshaus said she welcomed the news. “He
should have been disbarred before he started
the Swiss case because he stole my cousin’s
escrow account before hand and I didn’t
know,” she said, in an interview with The
Black Star.
The recommendation will be forwarded to a
Disciplinary Review Board which will then
send its decision to State Supreme Court in
New Jersey for final ruling. The process
could be concluded by the end of the year,
says John McGill, III, Deputy Ethics Counsel
Office of Attorney Ethics."
The story of the
NYC Rubber Rooms
is a big one, and I became a member (along
with NY Teachers reporters Jim Callahan and
Ron Isaac) of the
'SWAT TEAM'
put into place in
September by United Federation of Teachers (UFT)
President Randi Weingarten. We have been
working to resolve the issues presented to
us by the NYC BOE employees sent to
temporary re-assignment centers, or "rubber
rooms" throughout the New York City area.
In anger and frustration, several teachers
decided to sue the NYC BOE, Randi
Weingarten, and everyone else they could
think of, in a lawsuit with the Index number
08 CIV 0548 under Andrew Peck, Magistrate,
United States District Court for the
Southern District. Mr. Fagan must file -
after three extensions of time - on friday,
February 22, 2008, his amended complaint.
Peck has told Mr. Fagan that he is "wasting
his time" (Feb. 8). Mr. Fagan told Peck that
he had lost his computer, and he was trying
to get the emails back.
I write this letter on behalf of plaintiff
to request a brief adjournment of the date
within which plaintiffs response to
defendant's pending Motion to Dismiss.
This request is necessitated because the
computer on which all my research, files and
documents related to this case are stored
has malfunctioned and has had to be shipped
for service..."
When I first heard at the end of January
2008 that a
lawsuit
was being
filed in federal court
in protest of the civil, due process, and
constitutional
rights violations of
the teachers
and other educational
professionals confined to temporary
re-assignment centers in New York City
nicknamed "rubber rooms" (because of the
effects upon the minds of the tenured people
who are innocent of anything, falsely
accused by DOE personnel and/or the Special
Investigator, and told to appear daily in
windowless rooms located throughout the New
York City), I was stunned to hear that a man
named Ed Fagan was their attorney. One of
the finest and most honest people I have
ever met,
Gizella Weisshaus,
was a victim of Ed Fagan in 1998. Gizella's
entire family was killed during World War II
in the holocaust, and she is now 78 years of
age and an activist. In her father's memory
she wants to get back the money he put into
a swiss bank account before he was killed.
Ed Fagan became her attorney, then proceeded
to steal her money, destroy her case in
court, (see fax
pages 1-7
and
page 8,
which Fagan sent to Gizella Weisshaus on
February 18, 1998 - yellow marked passages
are added by Gizella) and used a picture of
her with her dead family to raise money for
New York State Senator
Alfonse D'Amato's
re-election campaign, according to Gizella
and other sources.
Teachers have called me in despair over what
they see as Ed Fagan's disorganized approach
to the case, and his demands, especially in
his
certification
and his
retainer agreement.
We believe that there are justified reasons
for several of the teachers who are
plaintiffs in this case to file a lawsuit
against the Department of Education in New
York City, but we also know that the UFT is
meeting with the NYC BOE to resolve many of
the issues. We do not believe that Ed Fagan
is the person who should bring these claims
to Court.
Currently, Ed lives with his ex-wife
Elizabeth Silver Fagan, who had left him to
marry (in a civil ceremony) a woman named
Margaret Rogers. Elizabeth Silver Fagan
threw her girlfriend out, moved her
ex-husband Ed back into the house, then
sued Ms. Rogers
on December 31, 2007, as well as her
parents, grandparents, Baldwin & Associates
Construction, Inc., Mayflower Realty Co,
LLC, Best Valley Realty, Inc,. The Jaffe
Family, the Jaffe Family Irrevocable Trust,
etc.,
for $20 million.
Ms. Silver Fagan claims that Ms. Rogers is
mentally ill and is harassing her. The
Defendants hired Attorney Peter Till, who
filed a
Notice of Removal.
The Fagans
filed answering papers
and a
Memorandum of Law,
opposing the Till papers on February 6,
2008... stay tuned.
In August 2007, US District Court Judge
(Southern District)
Shira Scheindlin fined
Ed Fagan
$5,000 and removed him from a case involving
victims of a
ski train fire in
Austria on
November 11, 2000, citing incompetency and
Fagan's own bankruptcy, saying "The fact
that Fagan is relying on this case to cover
such substantial personal debts seriously
undermines this court's confidence in his
ability to devise a prudent litigation
strategy for his clients". Mr. fagan
recently declared bankruptcy reporting that
he has "$13.6 million in debts. He hoped to
win a $16 million settlement from the Kaprun
fire lawsuit to pay his debt and end his
bankruptcy proceedings. We suppose that the
lawsuit against the Jaffe family serves the
same purpose.
The teachers who hired him to file the
lawsuit on their behalf against the NYC BOE
probably were "sold" on Fagan by his "fame"
as the attorney in the holocaust victims'
case. But attorneys who worked on this case
have said that Ed Fagan did no work, and
simply flew all over the world talking about
the horrific theft of money from holocaust
victims.
On Friday, February 8, 2008, Ed Fagan
appeared in Federal Court in front of
magistrate Andrew Peck. I was there, and so
was Gizella Weisshaus, who was told by me of
the appearence and wanted to attend.
Magistrate Andrew Peck asked Fagan why he
had violated his order to submit an amended
complaint no later than February 4, 2008;
Fagan told Peck that he had lost his emails
due to his computer being stolen, and he
asked to please get more time to submit an
amended complaint? (The papers in response
to Attorney Till in the Fagan v Jaffe case
were filed February 6, 2008, so what
computer was he using for that filing???).
Peck asked Fagan to give him a date to
submit his Amended Complaint, and Mr. Fagan
told Peck that he would have the papers in
to the Court on Wednesday, February 13,
2008. No papers were submitted on Feb. 13.
We understand from sources that the
extension is now February 22, 2008.
Fagan then met with the teachers who
appeared that day at a coffee shop (I
checked out his new "office" at 5 Penn
Plaza, and there is only a desk and
telephone; the security told us that all the
people on the 23rd floor are 'shady' and are
'not to be trusted'), and told them that
they must never speak with me, and that
Gizella Weisshaus is a liar.
My reply: dear reader, make your own
decision, based on the information
available.
Betsy Combier
Teachers sue to ax 'rubber rooms'
BY ERIN EINHORN, NY Daily News, Tuesday,
January 22nd 2008, 4:00 AM
A group of city
teachers filed suit
Monday
demanding the city shut down the so-called
rubber rooms where school employees are sent
to await disciplinary hearings.
The teachers filing suit are among hundreds
accused of serious crimes, like having sex
with students, or minor infractions, like
talking back to a principal.
Some are accused of simply being ineffective
teachers.
Because of agreements in their union
contracts, they can't be fired or
disciplined until they receive a hearing, so
they collect full salaries for months or
even years while doing nothing more than
reporting every day to what's officially
called a "temporary reassignment center."
"It's an abuse of public money," said
Florian Lewenstein, who in the suit
describes the rooms as "modern-day
internment camps."
Lewenstein is the only plaintiff identified
by name in the suit, which was filed in
Manhattan Federal Court, but he said 15
teachers are members of his Teachers4Action
group and that he is recruiting others.
Lewenstein says he was originally taken off
duty from Middle School 217 in Briarwood,
Queens, after he was accused of hitting a
kid with a book bag. He denies the
allegations.
The city teachers union says the suit is the
first to formally challenge the rubber
rooms. The suit alleges that the rooms are
part of a "scheme" to discriminate against
experienced teachers and "reduce salaries by
forcing teachers to quit or be fired."
"We're talking about people ... with 20
years of satisfactory ratings who have been
set up asincompetent or set up on corporal
punishment charges. They're some of the most
frivolous and ridiculous charges,"
Lewenstein said.
United Federation of Teachers President
Randi Weingarten said she's not supporting
the lawsuit because she's working with the
Education Department to address problems
with the rubber rooms.
"I understand their frustration," Weingarten
said. "Many of them believe they are
innocent and believe they should be
exonerated and they don't understand why
they are languishing in these rooms,
regardless of whether or not they're being
paid."
"We are already working with the UFT in this
area. There's no merit to the lawsuit," said
schools spokesman David Cantor.
eeinhorn@nydailynews.com
NJ Ethics Counsel says NY Holocaust
Lawyer Ed Fagan should be Disbarred
NJ Star Ledger Sunday, February 10, 2008
In a report dated
January 24, 2008,
New Jersey Special Ethics Master, Arthur
Minuskin, recommended that attorney Edward
D. Fagan be disbarred from the practice of
law in the Garden State. Fagan, who disputed
the New Jersey charges, currently holds a
license to practice law in New York.
Edward Fagan is most known for representing
the original first named plaintiff, Gizella
Weisshaus, in the 1996 Holocaust lawsuit
against the Union Bank of Switzerland. That
heavily litigated proceeding resulted in a
$1.25 Billion dollar settlement in 2001, and
generated a $1.3 million dollar legal fee to
Fagan.
The blistering New Jersey Ethics Report
concluded that
Ed Fagan
improperly used $39,902.25 of Holocaust
Survivor Gizell Weisshaus’ money to pay his
New York law office rent at 26 Broadway in
Manhattan.
The disciplinary probe by the
Office of Attorney
Ethics of the Supreme Court of New Jersey
also found
that Mr. Fagan had lied about being
authorized to disburse monies totaling
nearly $400,000.00 given to him by Mrs.
Weisshaus and another holocaust survivor,
Estelle Sapir.
The New Jersey complaint resulted from a
routine investigation conducted by the
Office of Attorney Ethics when Mr. Fagan
failed to pay his required annual client
security fund fee. After he was suspended
for nonpayment of the client security fund
fee, the ethics committee further
investigated Fagan to determine whether he
was practicing law during the period of the
suspension. That investigation raised
questions about his possible misuse of trust
account funds, including the Weisshaus and
Sapir monies.
Fagan’s testimony during the ethics hearings
revealed that in July of 2001, he received a
$4.3 million lee fee in a Holocaust related
German Global property settlement, in
addition to the $1.3 million fee from the
Swiss Bank case.
Previously, on Tuesday, August 28, 2007,
this forum reported on one of the on-going
horrors facing what people who know her
describe as "the strong and beautiful
Holocaust survivor Weisshaus." That report
was titled, "Patentgate Ethics Scam Hits
Holocaust Survivor."
As a young girl, Mrs. Gizella Weisshaus
survived the Holocaust, but recently and now
77-years-old, she finds herself on the
growing list of victims ensnarled in the
Manhattan attorney ethics scandal shaking
the New York State Court system.
Background
In July of 2007, it became publicly known
that many ethics complaints against
attorneys in the Bronx and Manhattan were
methodically mishandled-- effectively buried
or stalled—due to politically-based
connections, favors or back-room deals. The
"Patentgate" matter quickly highlighted the
need in New York for federal intervention
since the alleged theft of dozens of U.S.
patents by the inventor's own New York
lawyers-- the once respected and politically
connected Proskauer Rose law firm-- went
largely and substantively unaddressed. The
Patentgate ethics complaints were obscured
in New York at the very same time the
identical issues found The United States
Department of Justice widening their own
investigation and, additionally, where
members of the U.S. Senate and House
Judiciary committees called for further
probes. The ongoing ethics shake-up resulted
in the quickly announced "retirement" of
Manhattan's top State ethics Chief Counsel,
Thomas J. Cahill, Esq., and whose
replacement is expected to be announced
soon. (See the related August 24, 2007 story
below: "Justice Department Widens "Patentgate"
Probe Buried by Ethics Chief Thomas J.
Cahill" )
Holocaust Survivor meets New York “Ethics”
Mrs. Gizella Weisshaus was the named
plaintiff in the 1996 filed historic lawsuit
against Swiss banks that, after being
designated as a class action proceeding, was
settled in 1998 on behalf of thousands of
Holocaust survivors for $1.25 billion.
Gizella, however, opted out of that
settlement because, she says, certain
involved attorneys were more interested in
paying themselves millions of dollars even
before some of the survivors had received
any money. She would also learn, she says,
that someone "manufactured" a necessary
amended complaint in 2000 by backdating that
court document to 1997. And she would also
find that in an unrelated estate proceeding
where she was the executrix, her own lawyer,
Edward D. Fagan, had failed to deposit more
than $82,000.00 into an attorney escrow
account choosing, instead, to use the money
for his own various personal expenses. (Mr.
Fagan also represented Mrs. Weisshaus in the
subsequent filing against the Swiss banks
and from where he ultimately received
millions of dollars in legal fees)
The Devil's Advocate
An attorney ethics complaint followed, and
in a letter dated May 6, 1998, attorney
disciplinary Chief Counsel Thomas J.
Cahill's predecessor, Hal R. Lieberman,
Esq., wrote to Gizella to advise that since
her complaint against attorney Edward Fagan
had involved an "ongoing criminal
proceeding" his office would await the
outcome of that proceeding before concluding
their disciplinary investigation. Then-Chief
Counsel Lieberman also advised Gizella that
his New York State ethic's office had
requested a written answer to the complaint
from attorney Fagan. Edward Fagan then hired
his own lawyer.
Letter to Self
Approximately 9 weeks later, in a July 15,
1998 dated formal answer to the charges
against him, attorney Fagan's lawyer
submitted a 6-page denial of the various
charges made by Mrs. Weisshaus.
Astonishingly, attorney Fagan's lawyer, who
he had recently engaged, was none other than
Hal R. Lieberman who, in a 9-week period of
time, had left his position as Chief Counsel
of the New York Supreme Court, Appellate
Division, First Department Disciplinary
Committee to join the law firm Beldock Levin
& Hoffman, LLP.
So, essentially, on July 15, 1998 private
attorney Hal Lieberman was responding to
himself-- to his own May 6, 1998 letter
wherein he, as the New York state-employed
Ethics Chief Counsel had advised Gizella of
the request for a written answer from the
attorney she had filed a complaint against,
and the same person who was to be
Lieberman's client-- Edward Fagan.
Concerning the various ethics complaints
against him in New York, no known action has
ever been taken against attorney Edward D.
Fagan.
Ed Fagan
told the Austrian weekly NEWS he had paid
for sex with a woman from Lithuania, but
says she assured him she would be 22 this
year. He says he met the woman, Inga,
through a man who has since been sentenced
over the escort service affair. Mr. Fagan
says when he 'noticed that the guy was
running a call-girl ring, I didn't really
care. I was more interested in getting to
know this Inga'.
The lawyer is quoted as saying "it would
have been a crime not to have slept with the
woman." He says he later had sex with her
when no payment was made and she accompanied
him on several trips and visited him again
in Austria.
Knowingly having paid-for sex with a woman
under 18 carries a sentence of up to three
years in Austria.
Lawyer in Holocaust Case Faces
Litany of Complaints
By BARRY MEIER, New York Times - September
8, 2000
Less than four years ago, a little-known
personal-injury lawyer named Edward D. Fagan
stood next to an Auschwitz survivor at a
news conference in New York and announced an
audacious lawsuit, accusing Swiss banks of
stealing money 50 years ago from those who
died in the Holocaust.
Today, Mr. Fagan has a new and glamorous
career and is likely soon to earn millions
of dollars in legal fees. He has since filed
lawsuits against banks, insurers and other
companies in Austria, Germany and elsewhere,
charging that they too profited from Nazi
ties or exploited victims. Settlements of
actions against Swiss banks and German
industry worth over $6.2 billion were
recently approved.
Dozens of lawyers got involved in the
Holocaust claims. But the 47-year-old Mr.
Fagan cast himself a part as a media-savvy
street fighter who became the public point
man in the cases. This July, he hopscotched
in a few days from Berlin to Vienna to
Warsaw on behalf of tens of thousands of
people whom he and lawyers associated with
him represent.
They have also opened a second front,
charging Japanese companies in lawsuits with
using thousands of Asians and others as
forced labor during World War II.
"It's like a posse," the tall, curly-haired
and engaging Mr. Fagan said. "There are all
these bad guys all over the world, and we
have to track them down."
His mission, he said, is to reach back into
history and force a reckoning with those who
profited from evil. But an investigation by
The New York Times and the ABC News program
"20/20" has found that Mr. Fagan is facing
his own reckoning.
As he recast himself as a "human rights"
lawyer, Mr. Fagan left neglected
personal-injury clients in his wake,
abandoning their claims or not returning
their phone calls for years, according to
court papers and interviews. One former
client recently won a malpractice judgment
against Mr. Fagan and ethics officials in
New Jersey filed a misconduct complaint
against him last month on behalf of another
client.
Mr. Fagan, so at ease with using the
emotional force of the Holocaust as a
weapon, also ignored for months scores of
calls and letters from aging Nazi-era
survivors anxious about whether their claims
had been received, said a paralegal who
worked last year for him and his partner at
the time. That paralegal, Jane Warshaw, was
so distressed by what she saw that she wrote
in January to the judge handling the Swiss
banks case to complain.
"I never expected to witness what I have
seen at this office," she wrote. "What is
happening to these poor, old, injured and
neglected people is heartbreaking."
For his part, Mr. Fagan conceded he may have
failed some clients by taking on too much
work. But he insisted that he did his best
to represent his personal-injury clients and
that he labored ceaselessly in the Holocaust
cases without financial guarantees, winning
results few would have imagined.
"It was remarkable to be a lawyer and to be
able to use your profession to do good," he
said. "To change history. To stand up for
people's human rights is incredible, and
that's what we did."
Mr. Fagan's conduct does not appear to have
jeopardized the financial claims of his
Holocaust clients. In any settlement, they
would be eligible for the same compensation
as clients of more attentive lawyers. But
several survivors he represented say that
his failure to return calls for months, even
years, took a wrenching emotional toll.
Legal-ethics experts say lawyers are
obligated to answer client queries within a
reasonable period, even in a huge
class-action suit.
Mr. Fagan is a frenetic man who appears
inseparable from his cell phone. He had
hoped to be a rabbi, failed at business and
ran a struggling legal practice before he
stumbled into the Holocaust litigation and a
potential gold mine in legal fees. In the
Swiss banks suit alone, he seeks $4 million,
the most for any lawyer in the case.
There is little question that Mr. Fagan
played a leading role in promoting the
Holocaust claims, cases whose moral charge
made them a public cause. He specialized in
shaming companies and governments,
orchestrating demonstrations and prayer
vigils. Some Holocaust survivors and
advocates view him as their champion.
"He is a master in public relations," said
Hannah Lessing, an official of a
state-financed group in Austria for
Holocaust victims. "Behind all the facade of
yelling and screaming, there is a man who
cares for survivors."
But he also made it his business, while
other lawyers were painstakingly developing
legal claims, to be first at the courthouse,
gaining leverage with a hasty filing. A news
conference with an aged survivor would
follow, drawing in a flood of clients.
Mr. Fagan represents far more Holocaust
claimants than most other lawyers, giving
him a powerful role in negotiations. The
actual number of clients is apparently a
matter of some confusion. In one interview,
Mr. Fagan put the figure at 82,000, but his
own lawyer cited a different one -- 52,000
-- in a March response to a client
complaint.
Other lawyers in the Holocaust cases say Mr.
Fagan's ambitions vastly outstripped his
resources to deal with the huge numbers of
clients he took on and added that he was
often absent for the legal fight. Burt
Neuborne, who had worked with Mr. Fagan
before breaking with him, said Mr. Fagan's
filing in the Swiss banks case was so
inadequate that a judge asked him to rewrite
it.
"This was an ordinary man who got swept up
in issues that were bigger than he was,"
said Mr. Neuborne, a law professor at New
York University. "He didn't understand and
eventually didn't really know how to behave
and just got swept away in the current of
his own ego and his own ambition."
'Here Are Defendants'
Mr. Fagan has said that two pieces of
information led him to the Swiss banks case.
The first was a 1996 article in The New York
Times about Nazi gold and Swiss banks. The
other came from a longtime client, Gizella
Weisshaus, an Auschwitz survivor who told
him of her family's Swiss account.
He recalled: "I thought, 'Oh, my goodness,
I'm a lawyer, here are defendants. I don't
know who the plaintiffs are, I don't know
who the plaintiffs are going to be, but
someone is going to pay.' "
The Swiss banks case would also apparently
be the way to satisfy his gnawing hunger for
acclaim.
Born in Harlingen, Tex., Mr. Fagan grew up
in San Antonio with two brothers and a
sister, all from his mother's first
marriage. Mr. Fagan's father abandoned the
family, said Wayne Fagan, the lawyer's
oldest brother. His other brother, Avraham,
embraced Orthodox Judaism and Mr. Fagan
followed him to Israel.
"I wanted to be a rabbi," he said.
His religious ardor waned, and Mr. Fagan
returned to this country and enrolled in
Cardozo Law School in New York, a part of
Yeshiva University, graduating in 1980.
He spent several years with a large law firm
that represented corporate defendants. But
in the late 1980's, Mr. Fagan, searching for
something with more panache, tried to start
an exploration club for the wealthy.
Travelers would sail by yacht to exotic
locales, accompanied by ocean scientists and
environmentalists. In 1991 he set up the
Odyssoe Foundation, a nonprofit arm of the
business, to support environmental research.
But the whole venture fizzled.
In 1994, soon after returning to law, he
rented the entire 21st floor of the former
Standard Oil building in lower Manhattan,
complete with the original, opulent board
room. He tried to support his tiny firm,
Fagan & Associates, by subletting space to
other lawyers and advertising for personal-
injury clients in the yellow pages.
He was eager, however, for the spotlight,
trying to interest a tabloid in one case. In
1994, he asserted in a fax to the Star
magazine that the actor Sylvester Stallone
had tried to defraud a client of his who
owned three paintings by Mr. Stallone.
"There has never been been an article of
this nature with a celebrity (of this
stature) involving fraud and his artwork,"
Mr. Fagan wrote, according to papers in a
libel suit that Mr. Stallone filed against
him in 1994.
The magazine never published the article,
and Mr. Stallone withdrew his libel action.
In another case, Mr. Fagan got on television
representing a 6-year-old Queens girl who
had been stabbed with a hypodermic needle by
a homeless man on the subway.
But at the same time, his finances and his
business ties were unraveling, public
records show. He began to owe large amounts
of federal income taxes, a debt he said he
has mostly paid off. In 1996, the yellow
pages unit of the former Nynex Corporation
filed a $228,000 lawsuit against Odyssoe in
a New Jersey court for unpaid services like
advertisements for his legal practice.
Mr. Fagan said he ordered the advertisements
through the nonprofit organization, rather
than his law firm, because it was also the
billing address of some phone lines at his
firm. He said he believed the matter was
resolved, but a spokeswoman for Verizon, the
successor to Nynex, said the bill was still
outstanding.
Faced with an eviction proceeding for unpaid
rent, he was forced in 1997 to leave his
lavish offices and rent space from a law
firm in the World Trade Center.
The acrimony of his professional life
spilled over into his closest relations. In
the mid 1990's, Mr. Fagan severed ties with
his three siblings, said his brother Wayne,
a lawyer in San Antonio.
Wayne Fagan said: "Eddie was a warm, jovial
person who was like a pied piper. But
something happened and Eddie just changed."
The Cases Left Behind
With Mr. Fagan's claim against the Swiss
banks on behalf of Mrs. Weisshaus and others
in late 1996, he embraced a new mission. But
the claims of some of his personal-injury
clients were apparently abandoned or
forgotten.
One was Hector Ortiz. In 1992, Mr. Ortiz, a
49-year-old truck driver, smashed into the
back of a slow-moving crane, shattering
bones and sustaining head injuries.
In 1994, Mr. Fagan filed a $35 million
lawsuit on his behalf in federal court in
Brooklyn and brought a similar action in
State Supreme Court there. He aggressively
pursued the federal claim until late 1996,
court papers and interviews indicate.
In 1998, however, Judge Sterling Johnson Jr.
of Federal District Court dismissed Mr.
Ortiz's federal lawsuit. In doing so, he
also noted that Mr. Fagan had "failed to
prosecute" it for three years and had
ignored court orders. Mr. Ortiz's claim in
Brooklyn state court has lain dormant for
three years.
Mr. Fagan said that he had told Mr. Ortiz
about a year ago that his federal claim was
dead but that he had not yet informed him
that the state case also appeared at an end.
Mr. Ortiz, who has not worked since the
accident, disputed that account, saying in a
phone interview that he had not seen or
spoken with Mr. Fagan for more than two and
a half years. "I was waiting in vain," he
said. "I didn't know something like this
could happen. Right now I'm confused. I
don't know what to do."
Another client, Tom s Giron, was struck and
severely injured in 1992 by a car reported
stolen. Mr. Fagan said that he had made a
claim for Mr. Giron to a New York state fund
that compensates victims of uninsured
motorists but that it had been denied.
Jeffrey Rubinton, the fund's president,
though, said in an interview that its
records showed that such an action had not
been pursued and that the statute of
limitations on making one had long expired.
In January, a former client, Offer Salmoni,
won a $167,000 malpractice judgment against
Mr. Fagan, which the lawyer did not contest.
Mr. Fagan had filed a lawsuit on Mr.
Salmoni's behalf in 1993 to contest an
eviction. Mr. Salmoni charged in a 1998
lawsuit that Mr. Fagan had allowed that
claim to be thrown out by repeatedly failing
to make court appearances and had let the
statute of limitations expire without
refiling. Mr. Fagan, who is licensed to
practice in New York and New Jersey, said he
planned to settle with Mr. Salmoni.
Last month, New Jersey ethics officials,
after a preliminary inquiry, filed a
misconduct complaint before a grievance
committee against Mr. Fagan on behalf of
another former client, Diane Gibbons. Ms.
Gibbons had complained to the ethics board
that Mr. Fagan's failure to file required
papers in her personal-injury action led to
its dismissal. Mr. Fagan said he could not
comment on the matter because it was
pending.
Stephen Gillers, a legal-ethics expert at
New York University who is not involved in
the Holocaust litigation, said lawyers faced
sanctions if they ignored existing claims
when the prospects of bigger awards
beckoned. "Your loyalty to your original
client is undiluted," Mr. Gillers said.
Some personal-injury clients, whose names
were provided to The Times by Mr. Fagan,
said that he fought difficult cases for
them, and that they would use him again. But
Mr. Fagan acknowledged that he failed to
withdraw -- as lawyers are required to --
from suits that he did not pursue.
"I was in over my head a lot of the time,"
he said. "But now I'm digging out, for me
and for them."
Unanswered Calls, New Inquiries
By late 1999, with the Holocaust cases on
the way to settlement, Mr. Fagan had
established his place on the world stage.
When Jane Warshaw, a paralegal, was sent by
a temporary-help agency to work that fall
for him and his then-partner at the World
Trade Center, she was thrilled.
"I thought they were doing God's work," Ms.
Warshaw said.
Ms. Warshaw, 57, said that Mr. Fagan's
partner at the time, Carey R. D'Avino, asked
her to check the office's telephone
answering system. On it, she found more than
100 unanswered messages from Holocaust
survivors as well as personal-injury
clients, including Mr. Ortiz. It sounded
like many had been desperately calling for a
year or more.
Stacks of unopened letters from Holocaust
survivors or their heirs were scattered
around or stuffed in a drawer, she said.
"They must have gotten their hopes up and
then, there again, they were told that they
just didn't matter," she said.
Ms. Warshaw said she suggested to Mr.
D'Avino that she prepare a newsletter to
keep clients updated, an accepted practice
in class-action suits. The lawyer said he
told her that their clients were already
getting periodic newsletters. He described
her as "well-meaning" but "out of the loop."
In January, troubled by what she viewed as
client neglect, Ms. Warshaw sent a recording
of those calls to Judge Edward R. Korman of
Federal District Court in Brooklyn, who is
overseeing the Swiss banks case. She also
provided materials to The Times and ABC
News.
The picture emerging from the documents and
tapes is chaotic. New York disciplinary
officials were investigating complaints by
three of Mr. Fagan's clients. Calls from
Holocaust claimants were bounced from one
answering machine to another.
One caller, Bella Ross, said her parents,
concentration camp survivors, were ecstatic
when Mr. Fagan took their case in 1998.
"They thought, you know, they had this
savior," Ms. Ross said in an interview. "I
mean, this is the man. You saw him on TV.
You heard about him on the radio. You see
him in print. He is everywhere. It was like
finally they were blessed."
By last year, however, the family was so
concerned about Mr. Fagan's lack of response
to dozens of messages and faxes that she
filed a complaint with New York disciplinary
officials. "To date," Ms. Ross wrote in
December, "Mr. Fagan has done nothing to
update my parents on the status of their
case and is literally unreachable."
Hal R. Lieberman, a lawyer representing Mr.
Fagan in the matter, told investigators in a
March letter responding to Ms. Ross's
complaint that Mr. Fagan could not possibly
deal with each of his tens of thousands of
clients. Both Mr. D'Avino and Mr. Fagan said
in interviews that they had met their
ethical obligations to their clients; to
date, there have been no findings against
them.
Other Holocaust lawyers, though, were
devoting more extensive resources to client
communication. While some used paralegals to
handle calls, Mr. Neubourne, the New York
University professor, said he set aside four
hours a week to deal directly with
survivors, including many of Mr. Fagan's
clients who called him out of frustration.
"These are people who lived with these
memories for so long," Mr. Neubourne said.
"The memories were then opened up, somebody
told them something was going to happen. And
then they just got cut off."
Some clients said Mr. Fagan returned phone
calls promptly and others involved in
Holocaust-related issues said they also had
had far happier experiences with him. They
described him as a passionate advocate who
took up a fight that traditional Jewish
groups had allowed to languish.
"Ed was the only true source of light," said
Dr. Thomas Weiss, an ophthalmologist in
Miami Beach active in Nazi-era claims
against insurers. "He saw himself as picked
by Providence to lead this charge."
For his part, Mr. Fagan described Ms.
Warshaw as a "disgruntled former employee,"
though he conceded that some of her concerns
ere legitimate.
He said he spent much of his time in recent
years traveling and that only a few clients
had complained. "The truth of the matter is
that some people are going to be unhappy,"
he said.
Ms. Warshaw's complaint was referred to
court officials, and Mr. D'Avino said that
an investigator contacted him. Mr. Fagan
said an assistant was hired in June to
answer calls, resolving the matter.
A court official said the existence of an
inquiry would not be confirmed or denied
until a judge issued a ruling.
Haggling at the Top
In July, Mr. Fagan arrived in Berlin as part
of a victory lap in two of the most
significant cases. To settle slave-labor
claims against German industry, the
government and companies there had approved
a $5 billion fund to compensate Nazi-era
survivors. Not long after, Judge Korman in
Brooklyn approved the $1.25 billion
settlement of the Swiss banks case.
Mr. Fagan savored the moment, joining
government officials, industry leaders and
the heads of Jewish groups at the signing of
the German agreement. "I know for a fact
that the majority of these cases wouldn't
have happened without me," he said. "That's
not bravado, it's just a fact."
During the signing, though, Mr. Fagan
dickered by cell phone with Stuart E.
Eizenstat, the United States deputy treasury
secretary, about lawyers' fees and other
issues.
Under the German plan, two arbitrators are
to decide how to award legal fees. Mr. Fagan
argued with Mr. Eizenstat, who led
negotiations in the case for the American
government, that he understood that the
arbitrators had up to $75 million to award,
not the $62.5 million to which some other
plaintiffs' lawyers had agreed.
After the call, Mr. Fagan telephoned a
partner and said, "I got the legal fees up."
But his excitement was premature; documents
show that the lower figure was used.
Mr. Eizenstat said Mr. Fagan, after failing
to get higher fees, then asked for a letter
testifying about his efforts in the German
case because he feared that lawyers critical
of his conduct would seek to reduce his
payout. Mr. Eizenstat said he agreed to
write such a letter because he felt Mr.
Fagan had played a constructive role.
Mr. Fagan's fears are well-founded. He is
seeking $4 million in the Swiss banks case,
twice as much as any other lawyer. In class
actions, a judge or court-appointed expert
determines fees, and lawyers argue that they
deserve sizeable fees because they took
great risks and helped resolve the case.
But Mr. Neuborne and others said they would
argue for a far lower sum for Mr. Fagan in
the Swiss banks case, contending that his
contribution was minimal.
"His only gift was for publicity," said
Martin Mendelsohn, a lawyer in Washington
who worked on the Holocaust claims. "But
this was a lawsuit. It was not theater."
New Clients to Pursue
Late last year, Mr. Fagan and lawyers
associated with him set their sights on
Japan. They fanned out to Australia, Hong
Kong, South Korea, New Zealand and the
Philippines in a bid to sign up thousands of
people who claimed they had been used as
forced laborers, including former American
and Allied prisoners of war.
Gil Hair, director of a group in Miami that
represents American civilians interned by
the Japanese, said that Mr. Fagan called him
in December and characterized himself as the
"hero of the Holocaust" cases before he
began his sales pitch. Mr. Hair, who already
had a lawyer, declined.
In December, Mr. Fagan flew to Tokyo to make
client contacts at a conference held by
groups representing victims of Japanese
wartime aggression, said several people who
attended the meeting.
Public demonstrations soon followed. This
summer, hundreds of old men and women passed
into a park in Seoul, South Korea, under a
banner that, roughly translated, read, "For
the first time in 55 years we have brought
action by human rights lawyers from the
United States against the Japanese."
At the rally's end, a Korean folk band
playing drums and cymbals led the crowd down
a Seoul street as a man chanted through a
loudspeaker "The Japanese government should
repent and compensate for their atrocities
of World War II. Repent. Repent. Repent."
Holocaust typhus corpsesMr. Fagan said he
planned to move forward, addressing more
World War II wrongs and other human rights
causes. But some, like Ms. Warshaw, can only
see the trail of broken promises and failed
hopes he has already left behind.
"I don't see how you can ignore someone,
especially when you've said, 'I'm here to
help you, I'm going to help you,' " she
said.
A Case of Self-Promotion?
Prominent Holocaust Claims Lawyer Accused of
Neglecting Clients
By Brian Ross, ABC News - September 8, 2000
Lawyer Ed Fagan recruited as clients some
82,000 Holocaust victims or family members,
to help them press compensation claims for
Jewish money hidden by Swiss banks and slave
labor work for German companies.
(ABCNEWS.com)
Sept. 8 -- A lawyer who prominently
recruited thousands of Holocaust survivors
or their families in compensation claims
against German companies and Swiss banks now
is being accused of neglecting some of his
clients, ABCNEWS' 20/20 reports tonight. His
name is Ed Fagan, and in the past few years,
he has traveled the world recruiting as
clients some 82,000 Holocaust survivors who
were horribly abused, forced into slave
labor or who lost their family property and
bank accounts. Dozens of lawyers are
involved but Fagan has made himself the
public face of the so-called Holocaust
lawsuits brought against Swiss banks and
German companies. He's been widely quoted in
hundreds of articles and featured on
television around the world. Yet even as
Fagan was signing the final documents in
Berlin in a settlement that would give $5
billion to slave labor victims, a joint
investigation by 20/20 and The New York
Times found serious questions being raised
about this so-called savior, now accused of
ignoring and neglecting some of the very
clients he had promised to help.
Answering Machine Messages
Out of the public eye, says Jane Warshaw,
who worked for Fagan and a former partner as
a paralegal for several months last year,
the lawyers paid little attention to their
clients' pleas. A tape of telephone messages
left on the answering machine at Fagan's law
office was provided to 20/20 and the New
York Times. "And if they wrote in, it didn't
help," she says. "There was unopened mail
sitting on top of the desk on the chairs,
everywhere." She says she felt compelled to
blow the whistle on Fagan and his partner in
this letter to the federal judge overseeing
the Swiss bank case. Fagan, who admits he
hired almost no office help, says he was too
busy traveling and working on the cases to
answer all the questions from his thousands
of clients. But legal experts say that is no
excuse.
Legal Ethics
"It does not pass legal ethics for the
lawyer to ignore questions simply because
there are so many clients," says New York
University law professor Stephen Gillers.
20/20 played some of the tape for Gillers, a
leading authority on legal ethics, who says
Fagan should have made sure someone
responded to his clients. Gillers says Fagan
had a special responsibility given what the
Holocaust clients had been through. "Elderly
people who have been through hell and back,
that population has to be recognized as
deserving special care and solicitude," he
said. "A lawyer who receives that call has
to stop and say to himself, my God, I'm
doing something wrong here if I have even
one of those calls. Let alone three or four
or five," said Gillers. But it turns out
that even after Fagan learned of the
messages recorded by his former paralegal he
had never bothered to listen to all of them
until 20/20 played him the tape. "That's the
first I heard that tape," said Fagan. "Four
years of our lives we spent on these cases,
is it perfect? No. Should we give the people
phone calls? Yes," he said.
A Missed Deadline
Fagan's behavior may not affect the claims
of most of his clients, but it was a serious
problem for one family. With their daughter
Bella, Sam and Lola Rothkopf went to Fagan
because they believed their family had lost
thousands in a Swiss bank account when the
family fled the Nazis. Fagan seemed perfect.
"There was no other name that was associated
with this issue that regularly was there
other than Ed Fagan," said Bella Ross. But
the Rothkopfs say once they signed up with
Fagan and made the decision to relive so
many painful memories, turning over family
records to try to prove their connection to
the missing bank account, they never heard
from him or saw their records again. They've
now learned Fagan missed the deadline for
submitting documents to support the claim,
never filed the documents to back up their
claim, which the Swiss Bank Commission has
denied, awarding the disputed account to
someone else. "And he knew what we went
through and everything and he has, this what
he did is terrible. A terrible thing," said
Lola Rothkopf. Earlier this year, the
Rothkopfs took their complaint about Fagan's
failure to return their calls to the New
York State Bar Association, which declined
to take any action against him. Ed Fagan
responds, "Are there people out there that
say . . . that the manner in which the cases
were handled from an administrative
standpoint were not good? Were
inappropriate? Yes." But, he adds, "I
handled my obligations."
Others Complain
But the Rothkopfs are not alone in feeling
abandoned by Fagan. ABCNEWS found a number
of Holocaust survivors and family members
who signed up with Fagan and now claim he
virtually ignored them when they simply
tried to find out the status of their claims
or if their claims were even part of the
lawsuit. "And I was persistent. I called, I
sent faxes, e-mail, everything," says Dr.
Reuven Ofir. "I still don't know, is he
legitimate? Is he going to do anything? Or
is he not going to do anything," asks Minnie
Kramer. Professor Gillers says, based on
what 20/20 told him it had found, it's a
serious problem. "This is a law office out
of control, in my view. This is client
abuse, in my view, and it should not be
allowed to continue," he says.
Abandoned, Neglected Clients
But it's not the first time Fagan has been
accused of neglecting his clients. Just five
years ago, he was deeply in debt, placing
ads in the New York yellow pages seeking
clients for personal injury lawsuits. A
search of courthouse records and interviews
by Barry Meier of The New York Times found
five different cases in which Fagan appeared
to have abandoned or neglected existing
clients as he went after the higher profile,
higher-fee Holocaust clients. One of them
left behind, a truck driver seriously
injured in an accident in 1992. "He was
unaware until I told him a few weeks ago
that his $35 million lawsuit in federal
court had been thrown out. He said that he
had been trying to call Mr. Fagan for two
and a half years and had not received a
phone call back from him," said Meier. Fagan
disputes that. But at the same time Fagan
was living the good life, traveling Europe,
preparing to ask for millions of dollars in
fees for handling the Holocaust cases. "I
know for a fact that the majority of these
cases wouldn't have happened without me.
That's not, that's not from bravado, it's
just a fact," said Fagan.
'We Worked Around Him'
But other lawyers in the case say that is
simply untrue. "We essentially worked around
him," says New York University law professor
Burt Neuborne. "I mean, he was, he was
there, but, but he played, if I tell you
zero, I mean zero role in developing the
legal theory, in presenting the legal
theory, and in participating as a lawyer,"
says Neuborne. Neuborne, a leading human
rights lawyer who was originally brought
into the case by Fagan, says it's time to
set the record straight. "This is the first
time, I am speaking publicly about this. But
now that the cases are over, I think it is
appropriate to, to tell the truth about him.
One hundred percent of his activity in this
case, including the press activity, it was
designed to get his name there so other
people would sign up with him, so he could
get more and more and more and more people
in the fold and then show up in court and
say 'I am to the top lawyer cause I have got
the most clients,'" says Neuborne. "He, he
certainly doesn't know my ability as far as
what I can do as a lawyer," counters Fagan.
Large Number of Clients
"What did he attack, the number of clients?
There wouldn't be cases. The cases wouldn't
have been as powerful if we didn't have
82,000 clients," says Fagan. Fagan now says
he's improved communications with his
clients and provided us with a list of
clients, rabbis and family friends who
vouched for him. "Because he's a good Jew
and he's a compassionate person," says Alice
Fisher of New York City. Fisher is one of
Fagan's most prominent clients, often
appearing in public with him. She says she
trusts Fagan and he always returns her phone
calls. " I think he is a very good, a very
effective lawyer. I don't know why you have
to ask this," says Fisher. "If he does not
have a staff and so many clients he cannot
call back everybody."
Final Outrage
For many, the final outrage from Fagan came
this summer, in Berlin, when he held up the
final formal signing of the German slave
labor settlement, in part because of a
dispute over how many millions would be
given to the lawyers. With several hundred
people and top German and American officials
waiting in the next room, Fagan, still
wearing a 20/20 microphone, could be heard
haggling over the fees, and then boasting of
his success to first one lawyer. "I got the
legal fees up," he said. And then to another
lawyer, he said, "We did great, we did great
we just got another, we just got some more
money." "It didn't surprise me at the last
minute that the only lawyer, the only lawyer
that thought he could hold this deal up
would be Ed Fagan. Because that's the
barometer of how much you care about
yourself, and how much you care about those
victims," says Neuborne. "How could somebody
with such high ideals step on them and step
on the people involved. Just to champion
himself, for a paycheck? There are lots of
other ways to make money, not to take
advantage of people who suffered," says
Bella Ross.
Cable car fire acquittals contested
Associated Press - September 26, 2005
Austrian prosecutors opened their appeal
against the acquittals of eight people they
insist were responsible for the deaths of
155 skiers and snowboarders in a November
2000 alpine cable car fire.
The judges hearing the case in Linz, about
120 miles west of Vienna, have the option to
confirm the acquittals, change the verdicts
or restart the entire trial.
The eight defendants are among 16 people who
were acquitted in February 2004 on charges
of criminal negligence in the fire,
Austria's deadliest peacetime disaster.
They include two employees of
Gletscherbahnen Kaprun, which operated the
cable car; two employees of the company that
manufactured the car; two technicians and
two government officials.
The victims were headed for a day of fun on
the Kitzsteinhorn glacier near the alpine
resort of Kaprun on November 11, 2000, when
a defective space heater sparked a fire that
swept through the crowded car as it passed
through a tunnel.
Only 12 people managed to escape.
Most victims were from Austria and Germany.
Eight were Americans, and the others were
from Japan, Slovenia, the Netherlands and
Britain.
In July, US attorney Ed Fagan filed civil
lawsuits in New York seeking damages from
Gletscherbahnen Kaprun and several US and
international companies.
Fagan filed the suits even though an appeals
court earlier this year rejected efforts to
lump cases together in a class-action
lawsuit.
In Austria, at least 100 separate lawsuits
have been filed by relatives seeking
compensation.
Allegations Against Survivors'
Lawyer
N.J. ethics office claiming Fagan
misappropriated more than $400,000 from
accounts
Stewart Ain - Staff Writer, Jewish Week -
January 7, 2005
Edward Fagan, the first lawyer to sue Swiss
banks for hoarding the money of Holocaust
victims and who championed survivors' rights
in insurance and art cases, has been charged
by the New Jersey Office of Attorney Ethics
with looting more than $400,000 from the
trust accounts of two survivors he
represented.
Disciplinary action ranges from an
admonition to disbarment.
"The knowing misappropriation [of funds] is
a disbarable offense," said John McGill III,
the deputy ethics counsel who is overseeing
the case.
McGill said state rules allow his office to
refer cases to law enforcement "if a crime
has been committed," and that it would not
be necessary to wait until the complaint
process is completed. It usually takes about
a year. McGill said no referral has been
made "at this point."
Fagan said he had not seen the complaint.
"As soon as I see the information I will
retain counsel and respond," he said.
When he was interviewed by McGill's office
last year, Fagan was working from an office
in Short Hills, N.J. A secretary at that
office said Tuesday that Fagan has not
worked there for six months.
McGill's office sent a certified letter to
the Short Hills office, but it was returned
unopened this week. McGill said the post
office provided an address for Fagan in
Morris Plains, N.J., and that he has sent
another certified letter, as well as a
regular letter, to the attorney there.
McGill said he will give Fagan until Feb. 4
to respond.
If Fagan has not responded by that date,
McGill said he would send another letter
giving Fagan five days to either respond or
be found in default.
If Fagan contests the charges, a
three-member panel of the Ethics Committee
will hold a hearing. Its recommendation
would be offered to the nine-member
Disciplinary Review Board, whose decision
would then be submitted to the New Jersey
Supreme Court for final action.
The allegations against Fagan include that
he deliberately misled the New York State
attorney disciplinary committee when it
questioned him about charges brought by a
former client and survivor, Gizella
Weisshaus. She claimed that Fagan had stolen
funds from an escrow account established in
the name of her deceased cousin, Jack
Oestreicher.
Weisshaus said she entrusted the funds to
Fagan because the attorney told her that he
could get a higher interest rate on the
$82,583 in the account.
The New Jersey complaint alleges that Fagan
withdrew money from that account for matters
"unrelated to the Oestreicher client matter.
At the time [Fagan] invaded the Oestreicher
estate funds ... he knew he lacked the
authority to do so."
When New York authorities questioned Fagan
in June 1998 about the Oestreicher account,
the complaints said Fagan produced a bank
statement from another account "as proof
that the integrity of the estate funds had
been maintained."
In fact, the complaint alleges, Fagan showed
state investigators a bank statement from
another trust account he controlled. That
account was in the name of Estelle Sapir, a
survivor whose complaints against Swiss
banks led them to settle with her for
$500,000.
"By providing a copy of his Summit trust
account bank statement ... [Fagan] attempted
to deceive the New York disciplinary
authorities into believing that he had
maintained the integrity of the Oestreicher
estate funds, knowing that the only funds in
that account at the time were those for the
Sapir matter," according to the complaint.
It is alleged that Fagan then used Sapir's
money "without authority" to pay a court
judgment against the Oestreicher estate.
"From May 18, 1998, the date the Sapir
settlement funds were deposited into
[Fagan's] Summit trust account, to April 15,
1999, the date of Sapir's death, [Fagan]
made 37 disbursements totaling $302,750 by
checks payable to cash and wire transfers to
his Summit business account from Sapir's
funds," the complaint said. "[Fagan] made
the disbursements ... knowing that he lacked
the authority to do so."
The complaint alleges that other than $1,500
Fagan gave Sapir in June 1998 and $7,300 he
allocated to cover Sapir's funeral expenses,
Sapir systematically looted her account. In
the five months after her death, it is
alleged that Fagan withdrew $124,750 from
Sapir's account that was paid either in cash
or to his own business account."
It is further alleged that in August 1999,
in order to cover the disbursement of
$190,000 to Sapir's relatives when he only
had $3,330.94 in the Sapir account, Fagan
borrowed $225,000 from a former client and
friend.
A spokeswoman for the Sapir family said she
hopes Fagan "comes forward and does the
right thing for everyone if there is money
owed to any of the family. This issue
brought up such emotional distress, and this
is only adding to it."
Weisshaus said Fagan never "had the right to
switch my money." She said she initially
believed in him, even working in his office
for eight months without pay because "I
thought he was working for us."
McGill said any action taken against Fagan
would be forwarded to New York State
authorities, whose First Department
Departmental Disciplinary Committee would
then be expected to submit the decision to
the Appellate Division for its
consideration.
(Top)
--------------------------------------------------------------------------------
The Independent: Holocaust lawyer in
Austrian sex scandal
by Barbara Jungwirth in Vienna
Independent, (London, England) - September
17, 2005
A high-profile US lawyer who forced European
governments and companies to pay
compensation to slave labourers from the
Second World War, says he is being
deliberately smeared by an investigation
into whether he had sex with under-age
prostitutes in Austria.
Ed Fagan, who has brought class-action suits
over the treatment of Holocaust- era slave
labourers and over a train fire in the
Austrian ski-resort of Kaprun, is among
several men who have been connected with an
exclusive call-girl ring involving underage
girls from eastern Europe.
Mr Fagan told the Austrian weekly NEWS he
had paid for sex with a woman from
Lithuania, but says she assured him she
would be 22 this year. He says he met the
woman, Inga, through a man who has since
been sentenced over the escort service
affair. Mt Fagan says when he 'noticed that
the guy was running a call-girl ring, I
didn't really care. I was more interested in
getting to know this Inga'.
The lawyer is quoted by the magazine as
saying it would have been a crime not to
have slept with the woman. He says he later
had sex with her when no payment was made
and she accompanied him on several trips and
visited him again in Austria.
'We went sightseeing in Vienna, wandered
through the gardens of Schnbrunn palace, in
Salzburg we stayed in the incredibly
beautiful Hotel Kobenzl with views over the
city.' The lawyer says Inga and her younger
sister, who also worked as a call girl for
the agency, are now living in London 'in
safety'.
Investigations of clients of the agency have
just been started, after Austrian
prosecutors admitted it had been a mistake
not to follow this line of inquiry.
Knowingly having paid-for sex with a woman
under 18 carries a sentence of up to three
years in Austria. The state prosecutor,
Werner Pleischl, says telephone transcripts
involving a 'handful' of the escort
service's clients are being checked, to
determine whether they expressly requested
and met underage girls. The prosecutor says
authorities will now 'quickly make up for'
any previous oversights.
Mr Fagan's lengthy class-action compensation
cases for Holocaust victims and their
descendants have long been a thorn in the
side of European governments, banks and
companies. He has also represented the
descendants of slaves against three US
companies, led a suit against the South
African government for apartheid victims and
taken on a case against Thai and US
authorities for victims of the Boxing Day
tsunami.
The lawyer told NEWS there was 'no doubt'
the Austrian authorities were trying to get
back at him, 'to divert attention from the
real scandals going on'. He said he would
continue to fight his cases.
Speculation over the escort service's client
list increased when the left-wing weekly
Falter reported that the agency had received
telephone inquiries from someone within the
Austrian parliament. Gerhard Roder, a
spokesman for the governing People's Party,
said he made the calls purely for 'research
purposes'. Mr Roder is known for his
campaigns against child abuse.
Mr Fagan said he would welcome the
opportunity to go to Austria over the
call-girl case to prove he had done nothing
wrong.
(Top)
--------------------------------------------------------------------------------
Holocaust Lawyer Fights Accusation He Hired
Underage Austrian Hooker
By NATHANIEL POPPER
Forward (NY) - October 7, 2005
http://forward.com/articles/4587
A prominent Holocaust restitution lawyer, Ed
Fagan, is planning a trip to Austria to
defend himself against published accusations
that he hired an underage prostitute.
Several Austrian publications have reported
that the state prosecutor in Vienna is
looking into contacts that Fagan and other
individuals allegedly had with a
prostitution ring that involved underage
girls from Eastern Europe.
In an interview with the Forward, Fagan said
he does have an ongoing relationship with a
woman named Inga who was discussed in the
Austrian press reports as a 17-year-old
Lithuanian prostitute at the time of the
original meeting. Fagan is quoted in the
Austrian publication News as saying that the
woman had told him she was at least 22 years
old. Acccording to Austrian law, it is
illegal for an adult to knowingly hire a
prostitute under the age of 18.
Fagan declined to discuss the specifics of
his relationship with Inga, but said the
news reports in Austria were all done
"carelessly." Fagan said he has never been
contacted by the Austrian authorities, but
he recently contacted them and is planning a
trip to Austria to give a statement under
oath. Fagan also said he is planning to
bring legal suit against the Austrian
publications.
"The issue from top to bottom in Austria is
either a manipulation of evidence, a lie or
fraud," Fagan said.
Fagan said he believes the leaks in the
call-girl case are a form of payback, for
his role in filing a lawsuit against the
Austrian government in an American court,
accusing it of complicity in a ski resort
fire in 2000 that killed 155.
"The timing of the leaking of the police
files, which were doctored or inaccurate,
comes at a time right when we have sued the
Republic over a bunch of issues," Fagan
said. "There is nothing coincidental about
the timing."
Fagan rose to fame in the mid-1990s, when he
was the first lawyer to bring suit against
the Swiss banks on behalf of Holocaust
victims and their heirs, who were attempting
to claim accounts that had been dormant
since World War II. Fagan was famous for
holding high-profile press conferences
during which he made the case against
European companies and governments.
The Swiss banks eventually agreed to a $1.25
billion settlement, but Fagan never realized
the lawyer's fees that he had anticipated.
He has nonetheless continued his legal
battles against European governments,
including Austria. He has frequently
traveled to Austria to deal with these
cases.
The leaks regarding the prostitution
investigation were first reported at the end
of August by the Austrian magazine Falter.
Fagan was the only person named specifically
in the news reports that followed. The case
in question stems back to November 2004,
when two men were convicted in Austrian
court for running escort services involving
underage Eastern European women. The
Austrian state prosecutor only recently
began investigating the customers of these
call girl rings, to determine whether any
customer had knowingly sought out underage
prostitutes, according to news reports.
The Vienna state prosecutor did not return
calls seeking comment.
Fagan told the Forward that he knew one of
the men, named Peter, who was convicted last
year. Fagan said he met Peter while
investigating paintings taken from Jewish
families during the Holocaust. Fagan said he
found out that Peter ran an escort service,
when Peter was helping Fagan track down some
of the stolen paintings.
Fagan declined to say if it was Peter who
had introduced him to Inga. About Inga,
Fagan said, she "continues to be a friend of
mine — at one moment she was more than a
friend."
In early September, Fagan gave an interview
to the Austrian magazine, News, in which he
is reported to have said: "It would have
been an offense to not sleep with her. Later
we slept with each other without any
payment."
Fagan said that he was interviewed in
English, and would not comment on the German
translation that appeared in the Austrian
magazine.
The accusations in Austria are not the only
pending problem for Fagan. In the United
States, Fagan is the subject of an ethics
investigation that could lead to his
disbarment. The New Jersey Office of
Attorney Ethics has accused him of "knowing
misappropriation" of client money. The
special ethics master overseeing the case,
Arthur Minuskin, recently denied Fagan's
request that the case be dismissed because
of his medical incapacity. Hearings are
scheduled for mid-November.
