Friday, August 24, 2007

Let’s Go: Libel

by Jeffrey Toobin

When the first plane crashed into the World Trade Center, Rachel Ehrenfeld was sitting at her desk in her apartment in midtown. "I was on the phone with my editor in Brussels, finishing an op-ed about terror financing for the European edition of the Wall Street Journal," she said the other day. "I ran up to the roof to see what was going on, then I came back downstairs and did a new lead. It ran the next day."

An Israeli-born American citizen, Ehrenfeld has been writing about terror in its various forms for about twenty years. She developed a special expertise in tracing the money behind terrorist organizations, and after 9/11 she wrote a book called "Funding Evil," largely about the financing of Al Qaeda. Like other authors, Ehrenfeld drew passing attention to the role of Khalid bin Mahfouz, a member of a prominent Saudi banking family, who was, she wrote, allegedly involved "in the funding of terrorism."

Bin Mahfouz was also, it turned out, one of London's most prominent "libel tourists," the term for those non-Britons who try to take advantage of the country's pro-plaintiff libel laws. Those laws not only make it easy for plaintiffs to win damage awards but also allow American publications with small circulations in the U.K. to be sued in the London courts. The best-known recent libel tourist is Roman Polanski, who last month won a judgment against Vanity Fair, which is owned by the same company as this magazine; Polanski was not even required to travel to England to bring his case.

Shortly after the publication of "Funding Evil," Ehrenfeld began receiving demands for retractions from British lawyers for the bin Mahfouz family. She refused to give in, so in 2004 she was sued before the same London judge who decided the Polanski case. "My book wasn't even published in England," Ehrenfeld says. "But they said that because someone bought twenty-three copies there online, that was enough for me to be sued there."

Ultimately, Ehrenfeld decided not to go to England and contest the suit. "There was no way to win," she said. "Under English law, it wasn't enough that I could prove that I had written what my sources told me, but I would have had to prove the underlying truth of the accusations as well. No one can meet that standard." So last year the judge entered a default judgment against Ehrenfeld, which now amounts to at least a hundred thousand dollars.

Ehrenfeld then hit on a novel strategy. Having lost the libel case abroad, she sued bin Mahfouz in an American federal court, seeking to block the enforcement of the foreign judgment against her on the ground that it violated her First Amendment rights. "The Saudis are using their wealth to intimidate people from writing about them," Ehrenfeld said. "I thought it was time to fight back." (Her legal fees already amount to approximately two hundred thousand dollars.)

The bin Mahfouz family maintains a Web site ( largely devoted to recounting its various lawsuits, most of them filed in England, against journalists around the world. (The site does not note that Khalid bin Mahfouz, who held a thirty-per-cent ownership share of the Bank of Credit and Commerce International, or BCCI, paid a settlement of almost a quarter of a billion dollars after the bank's notorious collapse.) "Khalid bin Mahfouz has publicly condemned terrorism in all of its forms and manifestations," Timothy Finn, one of his Washington, D.C., lawyers, said the other day. "And he categorically denies that he has ever provided any assistance or financial support to any terrorist organization." Finn has asked Judge Richard C. Casey, of the federal district court in Manhattan, to throw the case out on the ground that his client has no ties to New York, and that since bin Mahfouz hasn't tried to enforce the British judgment here, there is no live controversy to decide.

Ehrenfeld earns a living by piecing together teaching stints, think-tank assignments, and book deals. "I am working on a new project about how the Saudis are using their money to penetrate the Western and U.S. economies in a strategic way," she said. "This is financial jihad." But she hasn't had much time to spend on the new book this summer. "I'm not reporting," she said last week. "I'm doing fund-raising to pay my lawyers." August 8, 2005

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