A dramatic episode in the annals of publishing history began early on January 23, 2004, when Rachel Ehrenfeld received an email from a London law firm threatening to sue her for libel for statements in this 2003 book concerning Saudi billionaire bin Mahfouz. Nine months later, his action was filed in London-where British laws make libel especially difficult to disprove.
Ehrenfeld's offense? Her book reports that bin Mahfouz, the former chairman of Saudi Arabia's largest bank, National Commercial Bank, had allegedly deposited "tens of millions of dollars in London and New York directly into terrorist accounts-the accounts of the same terrorists who were implicated in the 1998 bombings of the U.S. embassies in Kenya and Tanzania, in which 224 people were killed, including twelve Americans, and more than four thousand were injured."
The book implicated bin Mahfouz in transferring from the bank's Zakat (charity) Committee some $74 million to the International Islamic Relief Organization (IIRO) and to the Muwafaq "blessed relief" Foundation. Muwafaq in turn allegedly deposited funds directly with al Qaeda. Finally, Ehrenfeld also indicated that much of the funding for terrorism emanates from the Saudis, and from the bin Mahfouz and al Rahji families, who allegedly funnel the monies through a host of "charitable" institutions.
The reporter based her account of bin Mahfouz' alleged miscreance on a variety of reports from reputable journals and magazines, lawsuits, government documents, and data from public and anonymous government officials, among other sources. Although he denies any connection with terrorists, bin Mahfouz is among the targets of 10 lawsuits by the families of the September 11 victims, seeking damages of more than $1 trillion.
In Rachel Ehrenfeld v. Khalid Salim a bin Mahfouz, the author responded by seeking a declaratory judgment that her assailant could not prevail against her in the U.S. on libel charges arising from her 2003 book, Funding Evil. The case was assigned to Manhattan Federal Judge Richard Casey, who is also handling the bulk of the 9/11 lawsuits.
Ehrenfeld's attorney, Daniel Kornstein, considers her suit as important as New York Times v. Sullivan-the 1964 case in which the courts decided for the first time "the extent to which the constitutional protections for speech and press limit a State's power to award damages in a libel action brought by a public official..."
In the U.S., where Ehrenfeld lives and works (and her book was published) her allegations seem reasonable and should therefore be free speech protected by the First Amendment. Undeterred by U.S. law, however, the sheik reportedly sent emissaries at all hours to threaten Ehrenfeld. "You had better respond," his agent told her on March 3, 2005, in delivering some documents from the British action. "Sheik bin Mahfouz is a very important person and you ought to take very good care of yourself."
In Britain, libel laws place the burden on the defendant. Law courts require a reporter to prove the truth of his or her written allegations. In her defense, she must call to testify original sources--including government officials both public and anonymous. Given the impossibility of getting former Secretary of State Madeleine Albright (among others) on the stand, Ehrenfeld chose not to respond in Britain at all. Consequently, she lost the British case by default in May.
Bin Mahfouz is no stranger to U.S. courts of criminal law. In 1992, for example, he paid $225 million (including a $37 million fine) to escape criminal charges in New York involving his role as chief operating officer of the shuttered Bank of Credit and Commerce International. Its New York and London branches were closed, and BCCI was implicated by the Central Intelligence Agency for laundering drug money and supporting international terrorists. In settling, Bin Mahfouz admitted no wrongdoing.
Nevertheless, in October 2001, according to former national security advisor Richard Clarke, the U.S. Treasury Department listed Yasin al Qadi as a designated terrorist for his financial support of al Qaeda. Qadi headed Muwafaq, a Saudi "relief organization" that Clarke said "reportedly transferred at least $3 million, on behalf of Khalid bin Mahfouz, to Usama bin Laden [sic] and assisted al Qida [sic] fighters in Bosnia." So testified Clarke before the Senate banking committee on Oct. 22, 2003.
"Sullivan established the modern ground rules of libel actions and they have been in place since 1964," says Kornstein. Those standards, very friendly to reporters and writers, have put the onus of proof on libel plaintiffs. In this case, 23 copies of a book published in America were picked up in a foreign jurisdiction, which was used to seek judgment against an American. "The question is," Kornstein concludes, "do the Times Sullivan rules mean anything in a world so dependent on the Internet, instantaneous communication and international process that did not exist in 1964." Do they carry the same weight they were meant to carry 40 years ago?
Among those supporting Ehrenfeld in an amici filing with the U.S. District Court in New York are Amazon.com and the American Society of Newspaper Editors. Her legal expenses are expected to top $300,000--although she has to date received no financial backing from the publishing industry. According to the friends of the plaintiff,
"Rarely in the history of the United States have the principles underlying our First Amendment - the need for vigorous, open debate, particularly of matters of such vital public concern as the book at issue here - been more important. The energy, drive and credibility of our investigative journalists and book authors are critical to understanding and coping with international terrorism and other threats to our society. The dangers of foreign litigation against publishers, authors and journalists become more acute daily, in direct proportion to our society's increasing reliance on the Internet for dissemination of information and publications."
Anyone who cares about free speech should read this book.
--Alyssa A. Lappen