The Terror Finance Blog

Jennifer White on Libel Tourism

I am posting this on behalf of analyst Jennifer White:   

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Money Talks: Truly Deterring Libel Tourism

By Jennifer White

 

  During my days working as an attorney on large Wall Street financial cases, one of my mentors said, as I pondered the organizational review of what I knew would be tens of thousands of pieces of paper: “follow the money.”  While undoubtedly there have been several equally wise words that I have not taken to heart, that comment has never failed to cut to the kernel of any given matter I have worked on, whether be it worth hundreds of millions or a few thousand dollars.

  “The Free Speech Protection Act of 2009” has been introduced in both the House and Senate, (S. 449 introduced by Senators Lieberman and Specter on February 13, 2009 and H.R. 1304, introduced by Representative King on March 4, 2009), specifically to staunch the pernicious practice of libel tourism. 

  Libel tourism is a tactic used by radical Islamists and their supporters to muzzle information about their activities.  Specifically, libel tourists file suits in foreign courts (generally in which they have little or no connection) in order to advantage of that jurisdiction’s law and procedure.  England has been a favored spot for these suits as speech is far less protected in England than under our First Amendment, and in English courts, the burden of proof lies on the defendant. 

  The danger of libel tourism should never be underemphasized.  Libel tourism at the heart of lawfare, or the ways in which radical Islamists use our laws against us.  Lawfare, a far more subtle foe than groundfare, has already substantially furthered the radical Islamist agenda.

June 15 of this year, the House enacted H.R. 2765, “The Free Speech Protection Act of 2008.”  While symbolically important, it utterly fails as a true deterrent to libel tourism.  H.R. 2765 prevented courts from recognizing foreign judgments that conflicted with the First Amendment, but stopped short of providing those harmed by libel tourism with a separate cause of action.  Both H.R. 1304 and S.449, on the other hand, contain three provisions absolutely crucial if we truly wish to deter libel tourism: 1) the creation of a federal cause of action that the harmed U.S. person can bring; 2) damages should the harmed U.S. person prevail in his or her action; and 3) the possibility of treble damages. 

  Money talks.  Libel tourism was pursued in earnest in response against New York based author Rachel Ehrenfeld for her 2003 book “Funding Evil: How Terrorism is Financed and How to Stop it.”  Dr. Ehrenfeld was sued in England by Khalid bin Mahfouz, a Saudi billionaire featured in her book, which, among other things, detailed the Saudi money trail financing the radical Islamist agenda.  The British court, applying English law, found for Mahfouz, and issued a default judgment against Ehrenfeld.  Bin Mahfouz died August 16, but the practice of libel tourism lives on. 

  New York state responded to the default judgment entered against Ehrenfeld by enacting a law that prevented New York state courts from recognizing foreign libel judgments that are inconsistent with the First Amendment, referred to as “Rachel’s law.” Illinois and Florida have passed similar laws and California is poised to do so.

  The 2008 predecessor to the bipartisan 2009 House and Senate “Free Speech” bills is virtually toothless as a true deterrent. While symbolically important, the law merely allows the non-enforcement of foreign defamation judgments the U.S. if the expression in question is not a violation of the First Amendment.  As a number of federal courts had already reached this conclusion, H.R 2765, in fact, merely codified what a number of federal courts had already decided.

  Notably, the merry band of Saudi libel tourists (of which bin Mahfouz was a leader) did not appear to give the introduction of The Free Speech Protection Act of 2008 much thought. Records reveal that little, if any, real lobbying done by the Saudis to prevent its passage.  And really, why should they have bothered?  Without the ability of their victims to bring a cause of action against them and collect damages, what risk were they really running by continuing to suppress the truth?

  The Freedom of Speech Act of 2009, however, presents a whole new ballgame, one with real consequences for the Saudis who have, in the words of one Member of Parliament, made libel tourism an “international scandal” and a mockery of the British courts – continuing their game will likely result in large damage awards against them. 

  Both H.R. 1304 and S. 449 appear stalled in committee – in both cases the House and Senate Judiciary Subcommittees on Courts and Competition.  For actual protection against libel tourism, the critical pieces of The Freedom of Expression Act of 2009 must stay in place –the ability for the harmed U.S. person to bring an action and the corresponding damages provisions.  bin Mahfouz’s son, Abdulrahman, who engaged in serial libel tourism with his father, appears ready, willing and able to continue the practice.  Without the crucial protections of the Free Speech Act of 2009, this bipartisan legislative intiative will turn into yet another symbolic, but toothless, weapon against libel tourism. 

  Notably, a Saudi initiative to prevent the Freedom of Speech Act of 2009 from passing is newly in place.  According to a Member of Parliament who has asked that the British Law Society look into this issue, Shillings is one of the two most active British law firms acting on behalf of libel tourists.  Shillings recently teamed up with a prominent D.C firm, one without any involvement in any previous libel tourism suits, but one with an active practice on the Hill, to “investigate” the issue.  Already “seminars” on the issue of libel tourism are planned in the District as well as in London.  (London appears necessary as various members of Parliament are beginning to express concerns about the issue.)

  Money talks.  And it speaks in various ways.  As my partner meant long ago and Ehrenfeld experienced first hand, money talks by revealing information about alliances, sources and other information.  In recent years this has proven vital to our national security, as so aptly demonstrated by Ehrenfeld and others.

  Money also talks in that its use influences outcomes. We cannot allow money to talk its way out of the passage of the Freedom of Speech Act of 2009. As Representative King stated: “Our journalists provide us with insight on issues that affect all Americans, such as war and terrorism…We cannot allow their voices to be silenced by those who prefer to keep secret the inner details of these issues.”

Winning the War in Afghanistan

 By Rachel Ehrenfeld 

While the Obama administration is debating whether to escalate the war in Afghanistan, there may be a better solution for stabilizing the country. No one expects Afghanistan to become a peaceful, self-sustaining democracy overnight. However, without an effective strategy to turn the situation around, the surge is likely to result in the unnecessary loss of human lives and billions of dollars, while failing to remove the major reason for the instability in the region–the heroin trade.

Since its liberation from Taliban rule in 2001, Afghanistan’s opium production has gone from 640 tons to 8,200 tons in 2007, reportedly falling to 7,700 tons in 2008. The latest U.N.’s International Narcotics Control Board (INCB) report, however, is based only on the production in seven provinces where NATO and US forces are fighting the Taliban. Indeed, Afghanistan continues to supply over 90% of the global opiate market.

“Insecurity and drug production and trafficking…are very much inter-related,” INCB President Hamid Ghodse  told a news conference in London. According to Ghodse, “It is very difficult to say which is the cause and which is the effect.”

But former Afghan Interior Minister Ali Ahmad Jalili is clear: “This is a source of income for the warlords and regional factions to pay their soldiers. The terrorists are funding their operations through illicit drug trade, so they are all interlinked,” he stated in 2005. Since then, the situation has greatly deteriorated.

The Commander of the U.S. Forces (USFOR-A) and the International Security Assistance Force (ISAF) in Afghanistan, General Stanley McChrystal, rightly views the illegal drug trade as particularly dangerous because of its corrupting effects on the Afghan government.

An effective solution for the escalating violence, devastating corruption, crime and growing radicalization in Afghanistan has been available for a while, but previous administrations failed to implement it. The Obama Administration should initiate a new policy that includes drug eradication while providing the farmers with subsidies and skills for viable economic alternatives.

The Administration should fund the final studies necessary to implement the innovative and safe poppy eradication method that previous U.S. governments spent significant resources developing. This entails the use of mycoherbicides, naturally occurring fungi that control noxious weeds. Unlike chemical controls now in use to eradicate illicit plants such as coca shrub in Colombia, mycoherbicides assail only the targeted plant, rendering its cultivation uneconomical. These fungi continue to live in the soil, preventing the future growth of the opium poppy plant, but are harmless to other crops, people and the environment.

On Dec. 29, 2006, then President George W. Bush signed Public Law 109/469, of which Section 1111 requires the Office of National Drug Control Policy to conduct an efficacy study of mycoherbicides’ use on the opium poppy and coca shrub. Yet, the one-year study was never conducted. President Obama should immediately authorize the completion of the study.

The use of mycoherbicides in Afghanistan, combined with adequate enforcement by the military, will diminish the production of heroin. It will also cut off the Taliban’s and the warlords’ hefty money supply, which in addition to funds from the Saudis and the Gulf States, fuels political corruption and the war. This strategy would free up the $150 to $200 billion now used to fight the drug trade and its byproducts–crime, addiction, diseases, accidents, etc.–in the U.S., and make these funds available to help fight terrorism directly.

Unfortunately, while the Obama administration is considering a new policy to stabilize Afghanistan, it has already shifted focus from the War on Drugs to the War on Drug Traffickers. Instead of eradicating the opium crops in Afghanistan, the Administration is now targeting Taliban-linked traffickers and drug labs. But focusing on the criminal elements alone will do little to stop opium cultivation, or boost the economy, if only because there are very few alternatives for most Afghan farmers. Afghan opium production accounts for 97% of the country’s per-capita annual GDP, or $303 of $310.

Implementing this new strategy, while subsidizing the Afghan economy until other crops and industries can replace the illegal heroin trade, seems a better way for America to succeed in fighting the Taliban and the endemic corruption. It would also free up resources for an array of social and governmental reforms, which should be clearly defined and strictly supervised. With no heroin to fund terrorism and subvert the economies and political systems of Afghanistan and Pakistan, the American agenda could take a huge leap forward.

Dr. Rachel Ehrenfeld, author Funding Evil: How Terrorism is Financed – and How to Stop It, is director of American Center for Democracy 

Brazil Threatens Americans' Free Speech

By Rachel Ehrenfeld

Americans writers' free expression is under attack  by foreign courts.

In the most recent assault, a Brazilian widow is  suing an American reporter in a Brazilian court for allegedly defaming the  entire nation of Brazil. She claims Joseph M. Sharkey, a New Jersey - based  freelance travel columnist for the New York Times, offended the "dignity" of  Brazil by criticizing its incompetent air-traffic control on his blog.  Moreover, she claims that under Brazilian law, an "insult" to Brazil is also a  personal insult to her as a Brazilian citizen.

The lawsuit was filed by  the widow of one of the 154 victims who died in a mid-air collision of the  Brazilian Gol Transportes Aéreos Flight 1907 with a U.S. business jet over the  Amazon on September 29, 2006. All 154 passengers on the Brazilian aircraft  died; the seven passengers on the American jet survived.

Joe Sharkey  was one of the lucky seven survivors on the plane, which made an emergency  landing in the Amazon in Brazil. Upon his return to the U.S., Sharkey  published a front-page article in the New York Times about the disaster, and told his story  on major national TV and radio outlets.

The Brazilian authorities  detained the American survivors for lengthy interrogations, and immediately  criminalized the accident, assigning blame to the American pilots. They  proceeded to prosecute - in abstentia - the two American pilots for  homicide.

In response, Sharkey published a blog, which argued against  the scapegoating of two innocent American aviators in an atmosphere of  hysterical anti-Americanism, and criticized Brazil's attempt to cover up the  real problems in its air space over the Amazon.

Sharkey's blog, which  is the putative subject of the lawsuit against him, had a major role in  sorting out the truth and pressuring the Brazilian judge to release the  American pilots who were held for two months. In fact, Sharkey was proved  right when the United States National Transportation Safety Board issued a  report in December 2008 concluding that systemic and operational faults in  Brazilian air-traffic control over the Amazon were the probable cause of the  collision.

Sharkey was sued for defaming Brazil late last year, but  only received an official copy of the complaint, written in Portuguese, on  September 16.th In the meantime, however, the Brazilian court proceeded with  the lawsuit, and it is expected that he will be convicted.

If  convicted, Sharkey would be ordered to pay $500,000 to the Brazilian widow and  publish apologies to the Brazilian nation in major international newspapers  and media outlets - a major financial undertaking.

Had Sharkey resided  in New York state, he would have nothing to fear. In May 2008, New York was  the first state to pass the Libel Terrorism Protection Act, shielding New  Yorkers from foreign libel judgments. Illinois and Florida passed similar laws  and in California, the governor is expected to sign a free speech protection  bill into law by the end of this month.

Alas, Sharkey lives in New  Jersey. Although the New Jersey Senate unanimously passed a similar bill  (S.1643) sponsored by Sen. Loretta Weinberg, it remains enmeshed in a lengthy  approval process by the legislature.

But Joe Sharkey and his family can  be saved from the financial ruin they are likely to face from the Brazilian  libel suit, if the U.S. Senate promptly passes the Free Speech  Protection Act 2009 (S.449 ).

The bi-partisan Free Speech Protection Act  2009 is sponsored by Senators Arlen Specter (D-PA), Joseph Lieberman (I-CT),  Charles Schumer (D-NY), and Ron Wyden (D-OR). The bill is widely supported by  major writers' and publishers' organizations in  the U.S. A less protective bill proposed by Rep. Steve Cohen (D-TN) already passed the House.

The Free  Speech Protection Act will defend Americans' First Amendment rights from  foreign libel judgments that do not provide protection similar to the U.S.  Constitution, and will allow the deterrent of countersuits for damages. The  law will ensure that U.S.-based journalists, researchers and publishers no  longer need to fear the pernicious threat of foreign libel judgments, and will  be able to freely investigate and report on matters of national and  international significance. Congress should pass the Free Speech Protection  Act without delay.

This article was first published in TownHall.com on Sept. 30, 2009