ICN's Panic Accused of Sex Harassment : Lawsuit: Fired ex-aide alleges that the high-profile businessman constantly made sexual references and once attacked her.


A former aide to Milan Panic has brought a sexual harassment lawsuit against the Orange County businessman and one-time Yugoslav leader, claiming that Panic propositioned her repeatedly at their Costa Mesa office and ultimately fired her earlier this year after she threatened to make trouble over his unwanted advances.

Colleen James, 39, alleges in a lawsuit filed in Orange County Superior Court in Santa Ana on May 25 that the largely verbal harassment escalated to a physical attack in her office last year, when Panic grabbed her from behind and thrust himself against her in a sexual manner. James said in an interview that she screamed and managed to break free from her boss.

Panic, the chairman of ICN Pharmaceuticals Inc. in Costa Mesa, did not return calls seeking comment on the case Tuesday, and a spokesman said he would not discuss the lawsuit. But Panic's attorney, Bernard I. Segal of Los Angeles, said the businessman had never harassed James during her years at his company, and that she was let go in February solely because of cost cutbacks.

"You have here a disgruntled employee who knows that she's dealing with a prominent figure and is trying to make the most of it through some gambit to coerce money out of the company," Segal said. "But the company is not about to be browbeaten."

Panic has been a force in Southland business circles for years, building the company he founded in 1960 into an industry giant and generating controversy over his marketing of a treatment for the AIDS virus.

But he burst onto a far larger international stage last summer when he was named prime minister of his war-ravaged homeland of Yugoslavia. The appointment was seen by many in the Belgrade power structure as an attempt to provide a much-needed link with the West as the two-republic federation sank deeper into economic and political chaos.

Nine months later, however, Panic returned to Orange County and his pharmaceutical business after receiving a vote of no-confidence as prime minister, and then failing to unseat rival Slobodan Milosevic in a race for the presidency of Serbia, one of the states that, with Montenegro, makes up the Yugoslav federation.

James, who worked as a $51,000-a-year trade show manager at SPI Pharmaceuticals in Costa Mesa, an ICN subsidiary that is also headed by Panic, alleges in her lawsuit that Panic attacked her in her office just six weeks before he was named prime minister of Yugoslavia.

"Without consent," the lawsuit says, Panic grabbed James from behind, pulled her into his pelvic area and "began to grind against her." James said she later complained to several supervisors but was told that there was little they could do.

That incident, James alleges in her lawsuit, came after a lengthy string of other propositions from the ICN founder, who commented on her legs, invited her to have sex with him, and made other often blatant overtures.

One one occasion, for instance, Panic told James: "You have the perfect body for making love," the lawsuit alleges. In another instance, he allegedly told James that he was personally responsible for her bonus and linked the reward to her "beautiful legs."

"He seemed to enjoy it if you were shocked or disgusted," James said in an interview. "You feel totally helpless. But if I can help other women (by bringing her lawsuit), this will all be worth it. I want it to stop--maybe this is how we do it."

During her time at the company from 1979 until early this year, James said she avoided getting into an elevator alone with her boss or meeting him in the hallway. She worried about what clothes she could wear to work. And, James said, she grew increasingly concerned about her reputation among her colleagues as rumors spread that she had risen from the ranks of secretaries by having an affair with Panic, who is married.

"My worth there was in my sexuality. That's what was important to (Panic), and that hurts," she said.

But Segal, the attorney for Panic, questioned why James never filed a formal complaint under the company's sexual harassment policy and raised the issue only after she was let go.

"It makes you wonder," he said.

Segal also suggested that Shelly Mandell, who is James' attorney and a past president of the Los Angeles chapter of the National Organization for Women, "has her own interest in advancing this case."

NOW's potential involvement in the case "is as much a part of this as anything else," he said. "Mr. Panic becomes a very easy target for people with an agenda who want publicity."

Mandell acknowledged that sexual harassment has become one of NOW's top priorities in the wake of the Anita Hill-Clarence Thomas controversy, but she said the group has played no part in the James case. The main force in the case, she said, has been Panic himself.

"It is not about sex. It is about power, and this guy is quintessential in the profile of a power abuser," Mandell said.

The lawsuit does not specify damages sought by James, but Mandell said: "We want $6 million. A woman's dignity to me is worth a lot more than $6 million, but you've got to put a number on it somehow."

Mandell said she arrived at the figure by following the lead of a jury that awarded a sexual harassment victim $1 million because that was the amount her boss had received as a bonus. Panic reportedly made $6 million in salary and compensation for 1991.

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