British law threatening U.S. freedom of speech

Rachel Ehrenfeld

The author of a U.S.-published book that accused a former Saudi banking executive of funding terrorism is battling a precedent that experts say could give any foreign libel law priority over U.S. free press and speech guarantees.

The case involving Rachel Ehrenfeld is one of the "most important First Amendment cases of the past 25 years," and its potential for damaging the U.S. free press is "not yet readily recognized," 30-year American Civil Liberties Union board member Harvey Silverglate told her.

Ehrenfeld, who has posted information about her case on the website of the American Center for Democracy, which she directs in its research of Middle East-based terrorism, told WND the situation is very simple, and very scary.

In 2003, she documented and wrote, "Funding Evil: How Terrorism is Financed and How to Stop It," that alleged Saudi Arabian billionaire Khalid Salim A. Bin Mahfouz helped in that pipeline of financing.

Mahfouz formerly was president of the National Commercial Bank of Saudi Arabia and Forbes estimates his personal wealth at more than $3 billion. He says he condemns terrorism and never has assisted Osama Bin Laden or others.

Several of those books were purchased via the Internet by British buyers, and a short time later Mahfouz filed a libel action against Ehrenfeld within Great Britain, where antiquated libel laws put the burden of proof on the defendant.

She didn't respond, and later was ordered by a British High Court judge to pay about $120,000 in a down payment on damages as well as destroy copies of her book, which had been published by Bonus Books.

However, she's battling back, claiming what was described as "libel tourism" is impeding her "ability to research and write freely about international terrorism" and is seeking through the U.S. courts to have that ruling nullified.

She recently moved a step toward victory when the 2nd U.S. Circuit Court of Appeals asked the New York State Supreme Court for a clarification on a state law that appears to give U.S. courts jurisdiction on the issue.

Judge Wilfred Feinburg, at the Court of Appeals, concluded, "The question is important to authors, publishers and those, like Mahfouz, who are the subject of books and articles. The issue may implicate the First Amendment rights of many New Yorkers, and thus concerns important public policy of the state.

"Because the case may lead to personal jurisdiction over many defendants who successfully pursue a suit abroad against a New York citizen, the question before us is also likely to be repeated," he continued.

Circuit Judges Pierre N. Leval and Jose A. Cabranes joined Judge Feinberg in the ruling.

The focal point is where should such claims be handled, in a nation like England where several books were purchased online, or in the United States, where the book was written, and where Mahfouz has had business activities because he served Ehrenfeld with documents in New York.

The case bears some striking similarities to a lawsuit that WND is appealing now to the U.S. Supreme Court.

In that case, WND, based in Oregon, has been ordered by a Tennessee state court decision that in order to use the truth of some articles as a defense in a defamation case it also must reveal sources ? to which WND does not have access ? regarding the articles written by free-lance reporters that were posted on the Internet news provider's website during 2000.

The implications of that case, also, are huge regarding the First Amendment, because unless the state decision is overturned, shield law protections like those that protected Washington Post reporters Bob Woodward and Carl Bernstein in their pursuit of the Watergate scandal could be banished nationwide.

"If this is law, all President Nixon needed to do in order to retain his presidency is sue Woodward and Bernstein for defamation, force them into this Hobson's Choice and, by presumption, establish that the information attributed to the confidential source was false," said attorney Larry Parrish, who is handling the appeal of a Tennessee lawsuit brought by a top Al Gore fundraiser.

"The alternative for Woodward and Bernstein would have been to disclose the name of Deep Throat and suffer a breach of confidence judgment in favor of Deep Throat," he said.

The appeal to the Supreme Court is in a landmark $165 million defamation lawsuit involving WND, in which a Tennessee appeals court banned WND from defending itself based on the truth of a series of articles during the 2000 presidential election, because they included information from a confidential source to which WND didn't have access.

Ehrenfeld told WND her book was thoroughly documented before it was published, and the Saudi billionaire chose England to file his action because of the libel laws, which are opposite of U.S. laws.

"In the United States, he doesn't have a case. But in England all you have to do is file a case. Then the defendant has to prove what he or she writes is true, and not done with malice," she said.

She told WND that could have been done, but the costs would have been extremely high.

"The book was not published in England. I don't live in England. I don't see any reason to go to England. The expenses would have been horrendous," she said.

A U.S. district court judge to whom her original complaint was assigned agreed that U.S. courts had no jurisdiction in the foreign matter, but the 2nd Circuit panel recognized the dangers developing.

"They decided that I have a case [in U.S. courts] and therefore every American writer in a similar situation can to the same thing," she told WND.

"This is a very important case for reporters and writers and national security," she said.

She expressed concern that major media influences in the United States have largely, to date, ignored the case about a precedent to which they could become subject.

Media ignoring pivotal cases

Joseph Farah, editor and founder of WND, has expressed the same concern about the battle his company has been waging for years.

"I know many of my colleagues in the press care about the First Amendment," he said. "Anyone who cares about the First Amendment needs to start caring about this monumental case. This has the potential to be bigger than New York Times v. Sullivan. Yet little media interest has been stirred."

Lee Kaplan, in an article on FrontPageMagazine.com said the Ehrenfeld ruling from the appellate court was a "breath of fresh air" from the "Saudi petrodollars [that] buy influence throughout the world for the Islamic feudal kingdom that finances world terrorism and propaganda."

"In suing Mahfouz here in the USA, Ehrenfeld asked the Federal Court to declare the default judgment against her obtained by bin Mahfouz in England's High Court ? details concerning his terror financing as outlined in 'Funding Evil' ? as unenforceable in the U.S., and contrary to the free speech protections that all Americans enjoy. The 2nd U.S. Court of Appeals established for the future that other American writers and publishers will not be silenced by Saudi petrodollars and their influence on information in America," he concluded.

Should Mafhouz pursue the complaint in the United States, he noted, then he also would be subject to U.S. laws and Ehrenfeld "can demand his financial records in pre-trial discovery to show the validity of her terrorism-financing accusations."

Daniel Kornstein, Ehrenfeld's lawyer, said the situation of libel claims brought by non-U.S. citizens in foreign courts against American writers "has been on the increase and is an alarming trend."

"It is a vitally important issue for the publishing industry and for authors because of the concerns it raises about the chilling effect on free speech," he said.

In an article for The Family Security Foundation Inc., Adrian Morgan noted that present UK libel laws are based on a statute from 1819 and puts the burden of proof of the defendant.

Just last month, he noted, the London Times concluded that the nation's libel laws "have never been about protecting individuals ? they are about protecting the rich and powerful." That article was removed from its website soon, because even reporting critically on individual cases can violate the laws.

Ten years earlier, a libel case in Maryland concluded with a ruling that a UK money award could be waived, because it violated the U.S. protections of free speech, Morgan wrote.

Ehrenfeld, with a Ph.D. in criminology from the Hebrew University School of Law, has lectured at Columbia, researched at New York University and has acted as an adviser to the U.S. Defense Department.

Ehrenfeld said the costs of such litigation continues to rise, and donations can be sent to the Legal Support Fund at the American Center for Democracy.

Ehrenfeld is considered an authority of the "shadowy movement of funds through international banking and governments to fund terrorism."

Fluent in several languages, she has testified before congressional committees, as well as the European Parliament, and provided evidence to the British Parliament, and consulted government agencies such as the Department of Defense and Homeland Security.

She also is a member of the board of directors of the Committee on the Present Danger along with former Secretary of State George Schulz and former CIA Director James Woolsey.

In the WND case still pending, the 2000 reports by the free-lance writers mostly documented allegations of corruption involving then-Vice President Al Gore and others in Gore's home state. Some Tennessee observers believe the series had such impact that it was responsible for Gore losing the state ? and thus the presidential election. Had Gore won his home state, the disputed Florida vote in 2000 would have been meaningless and Gore would have had enough electoral votes to become president.

The reports included information about a Savannah, Tenn., auto dealer, friend of Gore and Democrat activist Clark Jones, who brought the action and has been determined by the courts to be a public figure.

Jones, who raised more than $100,000 for Gore's presidential campaign, alleges personal embarrassment and humiliation from the articles, which said he reportedly intervened in a Tennessee Bureau of Investigation probe into narcotics trafficking in Hardin County in 1999. The car dealer also alleges the articles implicated him in the 1980 arson of his own business, the Jones Motor Company, and also pegged him as a suspected drug dealer.

Parrish said the decision, if not changed, would be disastrous for the news industry.

"Because of the Internet invading the news dissemination business, it's to a point that the rules for the entire nation will be determined by the state with the most restrictive rules of law," Parrish said. Almost every newspaper, broadcast station or news service posts information on websites, and nothing can prevent those postings from being downloaded in any location, in this case Tennessee.

Since Tennessee law as it is being applied gives reporters the same opportunity for withholding a confidential source in a civil defamation case as they have before a grand jury ? none, he said, that very well could become the standard nationwide.

"Investigative reporting has been able to exist and continues with the requirement that names be divulged in a grand jury. You transport that same requirement into a civil defamation case against reporters and you will shut down the information from confidential sources," Parrish said.

"It is not complicated. This Court [U.S. Supreme Court] explicitly and unequivocally has held that there is a newsgatherer's First Amendment privilege of nondisclosure; the court of appeals straightforwardly ruled that there is no such privilege?" the appeal to the Supreme Court said.

"This Court, to protect the public interest in free-flowing access to news, at a heavy price to public figure-plaintiffs in civil defamation suits, has repeatedly ruled that the First Amendment makes it extraordinarily difficult for a public figure to obtain a judgment in such a civil defamation suit. All of the public policy this Court has so assiduously declared will go up in flames if what was ? decided can occur without this Court intervening to reverse," the appeal said.

Help WND fight landmark 1st Amendment legal battle

WorldNetDaily's only recourse in this lawsuit is to fight every step of the way in its pursuit of truth. If you would like to help offset the enormous legal costs involved in defending against this attack on the First Amendment, you may make a donation online to WND's Legal Defense Fund, or by calling WND toll-free at 1-800-4WNDCOM (1-800-496-3266), or by mailing a check ? made payable to WorldNetDaily Legal Defense Fund ? to:

WorldNetDaily.com, Inc.

P.O. Box 1627

Medford, OR 97501

MEMPHIS, Tenn. – An 8-year-old, $165 million defamation case against WND springing from a series of stories about then-presidential candidate Al Gore has been settled.

The terms of the out-of-court agreement with auto dealer Clark Jones are confidential. The settlement averts the need for a trial in Tennessee that was scheduled for next month.

Below is the text of the settlement statement jointly drafted by all parties in the lawsuit. Both sides agreed to limit comment on the lawsuit to this statement:

"A lawsuit for libel, defamation, false light and conspiracy was filed by Clark Jones of Savannah, Tennessee against WorldNetDaily.com, Tony Hays and Charles H. Thompson II arising out of a press release issued by WorldNetDaily.com on September 18, 2000, and articles dated September 20, October 8, November 24 and December 5, 2000, written by Tony Hays and Charles H. Thompson, II, posted on WorldNetDaily.com's website.

"The original news release by WorldNetDaily.com of September 18, 2000, and the article by Hays and Thompson of September 20, 2000, contained statements attributed to named sources, which statements cast Clark Jones in a light which, if untrue, defamed him by asserting that the named persons said that he had interfered with a criminal investigation, had been a 'subject' of a criminal investigation, was listed on law enforcement computers as a 'dope dealer,' and implied that he had ties to others involved in alleged criminal activity. These statements were repeated in the subsequently written articles and funds solicitations posted on WorldNetDaily.com's website. Clark Jones emphatically denied the truth of these statements, denied any criminal activity and called upon the publisher and authors to retract them.

"Discovery has revealed to WorldNetDaily.com that no witness verifies the truth of what the witnesses are reported by authors to have stated. Additionally, no document has been discovered that provides any verification that the statements written were true.

"Factual discovery in the litigation and response from Freedom of Information Act requests to law enforcement agencies confirm Clark Jones' assertion that his name has never been on law enforcement computers, that he has not been the subject of any criminal investigation nor has he interfered with any investigation as stated in the articles. Discovery has also revealed that the sources named in the publications have stated under oath that statements attributed to them in the articles were either not made by them, were misquoted by the authors, were misconstrued, or the statements were taken out of context.

"WorldNetDaily.com and its editors never intended any harm to Clark Jones and regret whatever harm occurred. WorldNetDaily.com has no verified information by which to question Mr. Jones' honesty and integrity, and having met him, has no claim or reason to question his honesty and integrity. WorldNetDaily.com wishes him well."