Senate Judiciary Committee

On

“Are Foreign Libel Lawsuits Chilling Americans’ First Amendment Rights?”

Tuesday, February 23, 2010;
Dirksen Senate Office Building, Room 226
10:00 a.m.

Statement of Dr. Rachel Ehrenfeld
Director,
American Center for Democracy

Senate Judiciary Committee On “Are Foreign Libel Lawsuits Chilling Americans’ First Amendment Rights?” Tuesday, February 23, 2010; Dirksen Senate Office Building, Room 226 10:00 a.m. Statement of Dr. Rachel Ehrenfeld Director, American Center for Democracy

Thank you Mr. Chairman and members of the Committee for holding this hearing on foreign libel judgments and the chilling effects that they exert on American freedom of speech and national security. My statements deal with the phenomenon known as libel tourism –foreign forum shopping – which is used to obtain libel judgments against Americans in countries that lack the protections for freedom of speech afforded by the United States Constitution.

Libel tourism is a pernicious and growing phenomenon whereby wealthy individuals, including corrupt terror financiers exploit plaintiff-friendly foreign libel laws to silence American scholars, authors, producers and publishers. Since the attacks on America on September 11, 2001, foreign libel laws have become a potent weapon used by the forces of tyranny that seek to undermine our freedom. It is no exaggeration to say that libel tourism threatens the free expression rights of all Americans, and intimidates courageous investigators and thinkers into silence in such vital areas as national security, medicine, and travel safety.

Libel tourists are claimants who exploit plaintiff-friendly libel laws in foreign countries in order to exercise a veto over U.S. citizens’ constitutionally protected speech. As a result, American authors and publishers that have never written for or marketed in foreign countries may still be sued for statements that warrant full First Amendment protection. By choosing to sue American authors and publishers in countries which lack First Amendment protections for freedom of expression, foreign plaintiffs strip away rights which the Founding Fathers fought to secure, and subject American citizens to the social, cultural and religious mores of other sovereigns.

Those sovereigns do not share our reverence for freedom of expression. In many countries today, journalists can be jailed for criminal libel. Truth is not a defense: publications can be confiscated; newspapers, film, television studios and broadcast stations can be shuttered; and writers and producers can be heavily fined and forced to publish apologies, retract and repudiate as false what they know to be true. Thus, most choose to keep silent instead of bringing to light political corruption and human and civil right violations.

I can attest that libel tourism inflicts great financial and emotional costs on authors. I am an independent scholar dedicated to expose the enemies of freedom and Western democracy. I spend great time and effort tracking down information across the globe. My books and articles are based in large part on evidence presented to Congress, parliaments and courts. I publish only material that can be verified. My credibility and livelihood depend on it.

In 2003, I published my book, Funding Evil, How Terrorism is Financed and How to Stop It. In that book, I mentioned Khalid bin Mahfouz, Saudi billionaire, formerly chief operating officer of the corrupt BCCI, banker to the Saudi royal family, and at that time, owner of the National Commercial Bank of Saudi Arabia, the biggest bank in the Middle East. In 1992, Mahfouz paid $225 million to settle criminal charges against him in New York arising from his control of BCCI. Mahfouz was also sued for hundreds of millions of dollars for funding al-Qaeda’s attack on the U.S. on 9/11, by the victims’ families.

In Funding Evil, I showed that Mahfouz had transferred some $74 million to at least two front charities for terrorism: the International Islamic Relief Organization and his Muwafaq or “blessed relief” Foundation, which then gave the funds directly to al Qaeda, Hamas, and other radical Muslim organizations.

From London, Mahfouz's lawyers demanded from me public apologies, a retraction, removal of my book from circulation everywhere, legal fees, and a donation to a charity of Mahfouz's choice. This was followed by further harassment and intimidation in the form of multiple faxes, voice messages, letters, e-mails and even personal threats. I refused to comply with Mahfouz’s outrageous efforts to silence and humiliate me.

In response, Mahfouz sued me in a British court for libel. I did not live in England. My book was not published or marketed in England. Nonetheless, the English court accepted jurisdiction because it was told by Mahfouz’s lawyers that twenty-three copies of Funding Evil arrived in England via Internet purchases, and a chapter of my book appeared briefly on the ABC TV website.

I refused to recognize the English court's jurisdiction over me. In 2005 the British court granted Mahfouz a judgment by default. In addition to awarding him hundreds of thousands of dollars, ordering me to pay his legal fees, and demanding that I publish international retractions and apologies, the English judge decided, without any trial, that Mahfouz’s denial of terror financing is enough to declare that my book was false. Mahfouz’s lawyer also requested me to pulp every copy of the book in existence.

All this farce was then posted on Mahfouz’s website dedicated to intimidate everyone from even trying to expose his terror financing activities. Until the New York legislature passed the Libel Terrorism Protection Act in May 2008, I spent many sleepless nights worried that Mahfouz would try to enforce the English judgment against me in New York. His deliberate non-enforcement of the judgment left it hanging over my head and my career like a sword of Damocles.

The United States has a tradition of almost automatic enforcement of foreign judgments under the doctrine of comity enshrined in the Uniform Foreign Money-Judgments Recognition Act, adopted by a majority of states. Although writers can assert a First Amendment defense to enforcement actions, few have the economic resources to do so. Hence, libel tourism forces them to engage in self-censorship.

The result of Mahfouz’s libel suits and that of others of his ilk is a “chilling effect” on free speech. According to Mark Stephens, a prominent libel lawyer in London, at least 40 to 50 authors and publishers, including many Americans he advised, opted to cancel books and articles for fear of being sued in England.

I was not the only American writer whom Mahfouz had attempted to silence; I was simply the first to fight him. Mahfouz's website openly bragged about obtaining settlements against more than 40 victims, all writers and publishers who were forced to apologize to him by the mere threat of libel litigation. Mahfouz openly boasted on his website about his power to intimidate and silence his critics in the media and academia using the British libel laws and court. Among Mahfouz's victims are many familiar names: Cambridge University Press, The Washington Post, USA Today Magazine, Harper's Magazine, the Center for American Progress & American Progress Action Fund, Penguin Books, the Los Angeles Times, Fortune Magazine and the Wall Street Journal. These media outlets and many others published retractions, corrections, and apologies to avoid legal confrontation with Mahfouz, the plaintiff friendly British laws and courts, and Mahfouz’s backers in the Saudi government.

My case demonstrates the chilling effect is no mere abstraction. I cannot travel to the U.K., lest I be detained to enforce Mahfouz’s extant judgment, and I run the same risk in Europe, due to the European Community’s reciprocal enforcement of member states’ judgments. Similar laws apply in most Commonwealth states, too. Mahfouz’s litigiousness in London led American publishers with assets abroad to cancel several books under contract or consideration. Those who once willingly courted my work now refuse to publish me. It also cut down drastically on the consulting work and speaking engagements I used to have. The same has happened to some of my colleagues writing on national security issues.

It would be a grave mistake to underestimate the threat that foreign libel lawsuits pose to American national security concerns, and other areas of interest. Mahfouz alone succeeded to silence more than 40 writers and publishers. How many more were intimidated by other libel tourists? We know that Russian oligarchs used similar tactics to silence American reporters who tried to shed light on the Russians’ shady business practices. After a Forbs reporter lost his life, most American publications refrain from further exposes. Others settled. How many lives and fortunes could have been saved had the American media felt free to expose terror financing and corruption?

Libel tourism attempts to stop reporting on radical Muslim terrorism and terror financing is illustrated by the case of Dr. Paul Williams. An award winning author who has published over 20 books, Dr. Williams wrote and published the fact that five students at Ontario, Canada's McMaster University had been members of al Qaeda. Those al Qaeda members have been designated as terrorists by the United States, and each has a $5 million bounty on his head, courtesy of the FBI. Dr. Williams exposed that they absconded from the school with nuclear materials. Dr. Williams was sued by the university in Canadian courts. His reputation is ruined, and a once prestigious writing career has ground to a screeching halt.

Libel tourism is only one of the more pernicious forms of foreign libel suit that threatens American free speech rights.

Foreign libel suits have interfered with travel safety warnings. Joseph Sharkey is a freelance travel writer for the New York Times is currently being sued in Brazil for writing on his blog that flawed operations at Brazilian air control led to a fatal plane crash over the Amazon, from which he was one of the few to emerge alive. Official inquiries of the incident have vindicated his account of events. Nonetheless, Brazilian prosecutors and legislators are seeking to criminalize the case against him. In addition to the injuries he suffered in the crash, he now fears for his safety.

Foreign libel suits have interfered with the American political process. In 2005, England's Justice Eady – the same judge who took jurisdiction over Mahfouz's case against me – took jurisdiction over current California governor Arnold Schwarzenegger in a libel case by a woman named Anna Richardson. Richardson claimed that Schwarzenegger and several aides had libeled her in a Los Angeles Times story when they contended that she had lied about an incident in which Schwarzenegger had allegedly sexually harassed her. In London, Eady ruled that Schwarzenegger was 'not peripheral' to the libel case in his court. At that time, Schwarzenegger was running for California’s governorship and the frivolous suit threatened to cost him the election.

Foreign libel suits have interfered with law enforcement efforts to stop drug trafficking and trace money-laundering routes. As early as 1984, Bahamian Prime Minister Lynden Pindling sued Brian Ross of NBC and NBC itself in Canadian courts for reporting on his deep involvement with infamous drug runner and money launderer Robert Vesco The suit charged the parties with libel and slander, demanding $2 million damages. The case was secretly settled in 1989.

Foreign libel suits threaten domestic freedom of the press. The Singaporean government successfully sued Dow Jones Publishing on account of two editorials and a letter published in The Wall Street Journal Asia. The articles reported on a damages hearing in a defamation case brought (and won) by former Prime Minister Lee Kuan Yew against opposition politician Chee Soon Juan and what an international legal organization said about Singapore’s judicial system. This marked the third time that Singapore held Dow Jones in contempt based on the company's op-eds.

Some of these cases may seem surreal to Americans who have grown so accustomed to free expression rights. We take them for granted and have difficulty envisioning societies in which those rights are treated as privileges, or in which those rights are provided lesser protections. In order to preserve the rights that we currently enjoy, we must pass legislation prohibiting the enforcement of foreign libel judgments that would not meet our more protective standards.

This is not a question of interfering with the legal regimes of other sovereigns, but of maintaining American protections for U.S. citizens, allowing them to write, publish, blog, and speak in this country without fear of foreign reprisals. This is not a question of abdicating any personal responsibility for potentially libelous statements made in the U.S., but rather of ensuring that they are tried in a proper forum which affords rigorous protections for opinion statements, and which protects truth. This is a question of maintaining and enhancing American sovereignty, national security, and liberty for all.

This is a matter of avoiding what happened to Cambridge University Press (CUP) in 2007. CUP was merely threatened with a suit by Mahfouz for the publication of Alms for Jihad, a book that exposed how Saudi charitable fronts were funneling funds to terrorist organizations worldwide. A cowed Cambridge settled the case immediately. As part of its settlement, it paid an exorbitant sum, published international retractions and pulped all unsold copies of the book and demanded that all libraries, including Americans, destroy their copies. In stronger terms – CUP – the oldest and most prestigious English-language publishing house - submitted to Mahfouz's demands for the destruction of a carefully documented work, in a throwback to the book-burning tactics of the Middle Ages and Germany's Nazi regime.

This is an issue of avoiding the unfair imposition of improper treatment such as was done against Peter Wilmhurst. He is a British cardiologist who in a scientific meeting in the U.S. criticized in an American company's research into the safety of their product. The American company sued Dr. Wilmhurst in England.

With The Free Speech Protection Act, S. 449, you have before you legislation that is widely supported in the authors' and publishers' communities. It does not involve the appropriation of any funds. It does not involve any interference in the domestic libel laws of other countries. It is aimed at protecting our most basic rights to research, expose injustice and corruption, and express our thoughts and emotions. It is meant to defend our rights to defend ourselves against infringement by foreign sovereigns, and against attack by foreign enemies.

I urge you to pass the Free Speech Protection Act with all due haste, and to reaffirm the guarantees of free expression.