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American Express Apologizes To Safra Over Media Attacks

July 29, 1989

LONDON (AP) _ American Express Co. said Friday it had apologized to international banker Edmond Safra for what it called ″an unauthorized and shameful effort″ to encourage false media reports that Safra’s banks had been involved in money laundering.

American Express also agreed to pay $4 million to charity as part of its unusual apology.

In letters released by the two sides, American Express Chairman James D. Robinson III said people ″acting on behalf of American Express began an unauthorized and shameful effort to use the media to malign″ Safra and Republic National Bank of New York, in which Safra holds a 33 percent stake.

Robinson said he regarded the reports as ″untrue and defamatory.″

″While I believe in vigorous competition, there is no room in our organizatin for actions which could cause unjustified harm to a competitor,″ Robinson said.

The letters were dated Monday.

Robinson also said in his letter that American Express, the giant U.S. financial services company, would make payments to four charities at Safra’s request, in an attempt to open a ″new chapter″ with Safra and his banks.

The charities were the Anti-Defamation League of B’nai B’rith, United Way of America, Hopital Cantonal de Geneve and the International Red Cross.

Luc Giacobino, a Republic Bank spokesman in Geneva, said news reports had alleged that Safra’s banks were involved in laundering money.

Safra and his associates launched an investigation lasting several months after noticing that articles containing the same information appeared in news media throughout the world, including Latin America and Europe.

The investigation eventually led to American Express, but the Republic spokesman refused to discuss the nature of the links between the news reports and company.

American Express also refused to elaborate on the matter, stating only that it ″is an internal matter″ and that ″appropriate steps are being taken.″

Safra has filed at least two lawsuits accusing newspapers of publishing defamatory material.

A hearing on a suit against L’Hebbo, a Lausanne, Switzerland, weekly newspaper, is scheduled for next month in Geneva. The second suit involves Minute, a French newspaper.

In his reply to Robinson’s letter, Safra said he was grateful that Robinson had ″agreed to take appropriate action″ to prevent further attacks.

″I believe you had no personal involvement in or knowledge of the false rumors and innuendos about me and Republic National Bank of New York,″ Safra wrote.

Safra, a member of a Lebanese banking family who now lives in Geneva, has made a career of providing banking services to the very rich. His most recent venture was to form Safra Republic Holdings SA last year from the European private banking operations of Republic Bank.

American Express and Safra became partners in private banking briefly after Safra sold his Trade Development Bank Holdings SA to the U.S. financial services conglomerate in 1983 for $520 million. Safra quit two years later following a falling out with American Express’ top management.

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