Saudi Money Attacking Free Speech in America

Robert Locke was educated at Columbia University and lives in New York City. His archive is at robertlockearchive.com. This article is a Jihad Watch exclusive:

The laws of Saudi Arabia, based upon the sharia law mandated by the Koran, do not recognize the rights and freedoms guaranteed Americans by the Constitution. The Saudi government makes no secret of its ambition to export Islamic tyranny worldwide, as the Koran commands. What most Americans don’t realize, is that American courts are helping it in a number of ways. For example, they are collaborating with Saudi attempts to squash the free-speech rights of Americans with abusive libel lawsuits.

Dr. Rachel Ehrenfeld is a victim of one such lawsuit and a bellwether for the future of free speech in post-9/11 America. This well-regarded Israeli born American expert on the financing of terrorism is the author of several books and the director of the New York-based American Center for Democracy (www.acdemocracy.org). In 2003, she published a book, Funding Evil, alleging that a Saudi billionaire, Khalid bin Mahfouz, a pillar of the Saudi establishment, had been instrumental in channeling money to Moslem terrorists.

Dr. Ehrenfeld wrote that bin Mahfouz, the former owner and chairman of Saudi Arabia's largest bank, National Commercial Bank, had allegedly transferred $74 million from the bank’s Zakat (Charity) Committee to the International Islamic Relief Organization (IIRO) and the Muwafaq "blessed relief" Foundation. Muwafaq was allegedly then the channel to al Qaeda itself. Such use of Islamic charities to fund terrorism is a known pattern. The highest reaches of Saudi society, including its vast royal family, have been plausibly accused.

These allegations are not drawn from thin air, nor do they lack official support. In October 2001, according to former national security advisor Richard Clarke testifying before the Senate Banking committee, the U.S. Treasury Department designed Yasin al Qadi, head of Muwafaq, as a terrorist, because of the al Qaeda tie. Clarke said that Muwafaq had "reportedly transferred at least $3 million, on behalf of Khalid bin Mahfouz, to Osama bin Laden [sic] and assisted al Qaeda [sic] fighters in Bosnia."

One would like to be fair to Mr. Mahfouz, on the off chance that he is merely a wealthy businessman who has shared boardrooms with evil people. But this man has a long history of acknowledged connections with financial wrongdoing. Look, for example, at the tortured exoneration, on his own official website, of his indictment in the legendary BCCI scandal:

Khalid Bin Mahfouz was an investor in BCCI and for a time a non-executive director. At no stage did he hold an executive position in the bank. When BCCI collapsed, Khalid Bin Mahfouz, together with others, was indicted in New York State on the grounds that he had withdrawn sizeable investments in the bank just before its collapse. Khalid Bin Mahfouz vigorously contested the allegations because he had acquired the right to "put" his shares in BCCI at the time he made his investment, and had legitimately exercised that right.

In 1993, after protracted litigation, the criminal case against Khalid Bin Mahfouz was dropped, as was an investigation being undertaken by the Federal Reserve Board into the acquisition of First American Bank. In settling all pending matters, Khalid Bin Mahfouz jointly agreed with Haroon Kahlon, another defendant, to pay approximately US $225 million …The indictment by the New York State grand jury was for a technical violation of law, similar to a "preferred distribution" prior to a bankruptcy. While categorized a "fraud", there was no "theft' committed or "false statements" made or alleged i.e. this was not a crime of "moral turpitude".

(binmahfouz.info/faqs_5.html)

Clearly, this man is no Boy Scout. People do not pay $225,000,000 to get the prosecutor to settle a case against them unless they know they are substantially likely to get convicted. It is probably no accident that bin Mahfouz was named among the defendants in the lawsuits by the families of the 9-11 victims, seeking total damages of more than $1 trillion, for his alleged role in helping finance al Qaeda.

Strictly speaking, he is of course innocent until proven guilty, from the point of view of criminal actions. But he is still, at minimum, a legitimate object of tough investigative journalism, such as American businessmen and politicians have to put up with all the time. Dr. Ehrenfeld’s book, which backs up its charges with extensive documentation, is legitimate. If bin Mahfouz were an American tycoon, this would not even be in question.

But why tolerate scrutiny, when you have the money to abuse the legal system into silencing your critics? Bin Mahfouz has sued Dr. Ehrenfeld in a British court – despite the fact that her book was not published there, nor are he or Dr. Ehrenfeld British – solely in order to take advantage of the fact that Britain has different standards on libel than the US.

Because of historic attitudes towards a man’s right to his reputation, in Britain a claimant need not prove that the allegedly defamatory statement was false – only that it was potentially damaging to his reputation. The courts require the writer to prove his allegations true, and the writer must call original sources to the witness stand to do so.

Under American law, the burden of proof is the reverse: claimants must prove the allegations false. Furthermore, following the famous New York Times vs. Sullivan case of 1964, there is a "public figure defense," giving substantial protection to journalists writing about politicians and other prominent people. In order to win, a claimant must not only show the allegations false, but made maliciously or with reckless disregard for truth.

Worse, British law requires the loser in a court case to pay the winner’s court costs. This is the real attraction for shady millionaires: the chance to bankrupt their opponents into silence. Because of this, Britain has become a Mecca for rich but shady characters seeking to purchase the appearance of legal vindication. There’s even a name for it: libel tourism.

Because Dr. Ehrenfeld’s book was based upon public information, such as statements by government officials, it would have been impossible to to bring her intelligence sources to testify to vindicate her claims. Therefore, she declined to respond to the British lawsuit, and lost by default. Her book was banned in England, and the judge issued an injunction against her.

But the larger issue, of course, is how it became the business of a British court to render judgments against American authors. The legal pretext here is laughably flimsy: despite the fact that the book was never published, or even offered for sale, in the UK, 26 Britons bought copies over the Internet from American booksellers like Amazon.com (which, to its credit, joined an amicus brief supporting Dr. Ehrenfeld in this.) And a few downloaded the first chapter, which was posted on the Internet.

By this standard, every author in the United States is now subject to Britain’s Victorian libel laws, and the Declaration of Independence has failed.

Obviously, British police can’t arrest Dr. Ehrenfeld on the streets of New York, or garnish her life savings here in America. But bin Mahfouz can request a U.S. court to enforce the judgment against her, as there are treaties between the UK and the US to that effect. It is obviously reasonable for an American court to make an American pay parking tickets racked up in Berlin, just as we would expect a German court to enforce a similar judgment in the converse case. But enforcing other nation’s diminished conceptions of free speech are another matter entirely.

To their credit, American courts are not entirely unaware of this problem. In 1997, the Maryland State Appeals Court refused to enforce an English libel ruling against an American, arguing that

the principles of English libel law fail to measure up to the basic human rights standards and are repugnant to public policy and the constitutional ideal of free speech.

This may be an exaggeration, if it were only a matter of the English choosing what laws they want to live under. But it’s not, when their laws are being exported here due to the mindless deference of our own legal system.

After she forfeited her case in the UK, Dr. Ehrenfeld asked an American court to declare the unenforceability of the British judgment in the US. It declined to do so, on the paradoxical grounds that it lacked jurisdiction – precisely what the British court lacks, on any sensible interpretation. Her case is now being appealed; her lawyers’ quite-readable brief may be downloaded here:

www.public-integrity.org/news/Ehrenfeld_v._Mahfouz.pdf

This thoughtlessness by our courts has already damaged freedom of speech in America, and the difficult and dangerous work of investigative journalism against terrorism. As Dr. Ehrenfeld notes,

[British] libel laws have a pernicious chilling effect. I know of two publishers who have cancelled books that cover similar issues to mine — books they had already commissioned and bought — because they don't want to get involved in lawsuits.

The danger element is no joke. Bin Mahfouz has apparently sent emissaries at all hours to threaten Dr. Ehrenfeld, and one of his well-dressed henchmen is alleged to have told her on March 3, 2005, “You had better respond. Sheik bin Mahfouz is a very important person and you ought to take very good care of yourself.” Coming from a man who may have had Osama bin Laden’s phone number in his rolodex, this is not a laughing matter.

Other authors have been affected. Due to bin Mahfouz's intimidation, Gerald Posner, in his book Secrets of the Kingdom, does not mention him or the Muwafaq organization. Loretta Napoleoni similarly expunged bin Mahfouz from her book Terror Incorporated. Dozens more apologized, retracted and paid fines. Dr. Ehrenfeld was also prevented from attending an October 2005 conference in the UK on the financing of terrorism, due to her jeopardy under the libel law.

Dr. Ehrenfeld’s legal expenses may exceed $300,000. Despite the moral support of the American Society of Newspaper Editors, she has of yet received no financial help from the publishing industry whose freedom to print is being threatened. Friends of free speech and American sovereignty can donate to her cause here: www.public-integrity.org/support.

Posted by Robert at July 13, 2006 8:49 PM
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