The Subcommittee on Commercial and Administrative Law Committee on the Judiciary
U.S. House of Representatives
Thursday, February 12, 2009
Dr. Rachel Ehrenfeld
Thank you Mr. Chairman and members of the Committee, for holding this hearing on libel tourism, which affects me personally. Special thanks to Mr. Cohen for inviting me.
Sitting at my desk on January 23rd, 2004, I was interrupted by an email from a law firm in London. This was no ordinary message. It was a letter threatening to sue me for libel in a British court, for statements made in my book Funding Evil; How Terrorism is Financed – and How to Stop It, about their client, Saudi billionaire Khalid bin Mahfouz.
The letter said that Mahfouz denied allegations in my book that he funded al-Qaeda and other Muslim terrorist organizations.
Mahfouz's lawyers demanded my public apology, retraction, removing my book from circulation, legal fees, and a donation to a charity of Mahfouz's choice. This was followed by further messages, faxes, mail, and legal paper served.
I am a scholar dedicated to exposing the enemies of freedom and Western Democracies, through publications in books and articles. The psychological emotional, and financial effects of the threat of this libel lawsuit against me in London, will stay with me as long as I live.
I refused to recognize the English court's jurisdiction over me. I did not believe that I should have to defend myself in a country where my book was not published or even marketed. Nevertheless, I was sued for libel in London, because 23 copies of Funding Evil, found their way to Britain, mostly through the Internet, which also carried a chapter of my book.
In 2005 the British court granted Mahfouz a judgment by default, awarding him hundreds of thousands of dollars, and other sanctions.
Until the New York legislature passed the Libel Terrorism Protection Act last May, I spent many sleepless nights worried that Mahfouz will try to enforce the English judgment against me in New York. His deliberate non-enforcement left it hanging over my head like a sword of Damocles, which aggravated the chilling effects. Mahfouz, also uses a dedicated website to advertise my judgment, with more than 40 other names of those he threatened and sued in London.
Mahfouz's suit has never been tried on the merit. Yet the British judgment affected my ability to publish. The threat he wields over me, and over others, chilled American publishers, especially those with assets overseas, from publishing books containing information on terror financiers.
Mahfouz also chilled my ability to travel to the U.K., lest I be arrested to enforce the British judgment against me. I run the same risk in Europe and in most Commonwealth states due to the reciprocal enforcement of judgments.
The Free Speech Protection Act includes provisions to counter sue and damages. These are essential to remove the chilling effects of foreign libel suits because they will serve as a deterrent to people contemplating to sue American writers and publishers in England or other foreign jurisdictions.
Do you think Mahfouz would have sued me had he known I could counter sue him and ask for damages? And wouldn't that be true for others who sued Americans in London or elsewhere?
Today is a special day to have this hearing. We all know the significance of the man whose birthday we celebrate today. Lincoln was, among other things, a wonderful writer who held this nation together with his words that were published and which we revere to this day.
Imagine if he was intimidated, threatened, and chilled from publishing those words by threat of foreign libel lawsuits.
It is therefore "fitting and proper" that this Committee held this hearing about freedom of expression on Lincoln's birthday. I urge Congress to pass the Free Speech Protection Act "because it is fitting and proper" that it should do so.
We are confronted by libel tourism -- a pernicious and growing phenomenon, especially
after the 9/11 attacks on America -- whereby wealthy and corrupt terror financiers exploit
plaintiff-friendly foreign libel laws and expansive Internet jurisdiction to silence
American authors and publishers. Foreign libel laws have become a potent weapon used
by the forces of tyranny who seek to undermine our freedom. The Free Speech
Protection Act can stop this.
In New York Times v. Sullivan, the Supreme Court struck a critical balance between libel
actions and a free press guaranteed by the First Amendment. The high court raised the
bar for libel plaintiffs to insure our "profound national commitment to the principle that
debate on public issues should be uninhibited, robust, and wide-open." Based on that
principle, the court declared: "libel can claim no talismanic immunity from constitutional
Outside the United States, there are no such "constitutional limitations." The House of
Lords explicitly rejected the Sullivan standard. So did the Canadian Supreme Court.
Although all forty-one-member states of the Council of Europe submit to the European
Court of Human Rights, Article 10 of its charter also rejects the Sullivan standard.
In many countries, journalists can be jailed for criminal libel; truth is often not a defense;
high office holders enjoy extra protection against criticism; publications can be
confiscated; newspapers and broadcast stations can be shuttered; and writers can be
forced to publish adverse court orders, and repudiate as false what they know to be true.
Congress must protect American writers and publishers to guarantee the "uninhibited,
robust and wide-open" debate the First Amendment was designed to protect. Scholars
like me seek Congress's help to stop libel tourism from limiting our ability to write freely
about important matters of public policy vital to our national security.
I can attest that libel tourism is costly, financially and emotionally. I do not command an
army - or control an industry - or have vast wealth - or hold political office. In other
words, I do not possess any traditional sources of power in society. Instead, I write. I am
a scholar dedicated to expose the enemies of freedom and Western democracy. I expend
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. Like
most responsible scholars, I publish only material that can be verified. My credibility and
livelihood depend on it.
In 1992, I published Narcoterrorism: How Governments Around the World Have Used
the Drug Trade to Finance and Further Terrorist Activities, and first called attention to
the intimate relationship between drug trafficking and terrorism.
Terrorism is not cheap. To the contrary, it is a capital-intensive activity. It requires lots
of cash for training, weapons, vehicles, salaries, cell phones, airline travel, food and
lodging; etc. I showed how the drug trade, not just oil profits, fuels terrorist
organizations. While policy makers were romanticizing the Palestine Liberation
Organization as a group of so-called "freedom fighters," I showed how the PLO filled its
coffers with billions of dollars from heroin, hashish, airplane highjacking, extortion and
illegal arms sales. Until my book, neither the American government nor international
agencies for drug control publicly linked narcotics and terrorism.
When asked why he robbed banks, Willy Sutton famously replied: "Because that's where
the money is." I followed his lead and followed the money. This led to my second book,
Evil Money: The Inside Story of Money Laundering and Corruption in Government,
Banks and Business, in which I connected the dots between drug profits, money
laundering, political corruption, Islamic banking and how illicit funds are used to
The Committee undoubtedly remembers BCCI, the Bank of Credit and Commerce
International, the cash till for Hezbollah, the PLO, HAMAS, Abu Nidal and other
terrorist organizations. BCCI's chief operating officer was Saudi billionaire, Khalid bin
Mahfouz, banker to the Saudi royal family and at that time, owner of the National
Commercial Bank of Saudi Arabia. In 1992, Mahfouz paid $225 million to settle criminal
charges against him in New York arising from his control of BCCI.
In 2003, I published my third book, Funding Evil, How Terrorism is Financed and How
to Stop It. In that book, I showed the true face of terrorism. It is not the stereotype of
underprivileged Islamic youth yearning to be religious martyrs, but instead, an
international network of corrupt dictators, drug kingpins, and villains like Mahfouz who
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.
In response, Mahfouz sued me for libel. What happened to me did not occur in a dark
backwater of totalitarian repression like Syria, Saudi Arabia, or North Korea, but in
England. Mahfouz does not live there. I do not live there. My book was not published
or marketed there. Nonetheless, the English court accepted jurisdiction because twentythree
copies of Funding Evil arrived in England via Internet purchases.
English law does not distinguish between private persons and public figures. Allegedly,
offensive statements are presumed defamatory and the libel defendant bears the burden to
prove they are true. Official documents from non-English sources are typically
inadmissible in court, and Arab dictatorships refuse to help Western writers and
publishers prove allegations about terrorism.
Protection of opinion is limited and multiple suits are allowed for a single act of
publication. Libel defendants have limited pre-trial discovery and no right to depose
plaintiffs under oath, as in American courts. Thus, libel plaintiffs usually win, verdicts
are substantial, and defendants must pay the plaintiff's legal fees. It is no wonder then,
the Times of London called London the "libel capital of the Western world."
Mahfouz's threats conveyed by E-mails, faxes, and legal papers were unsettling, and on
one occasion, I was warned to do as he demanded if I "knew what was good for me"
because he has friends in high places who wield great influence in the U.S.
I refused to recognize the English court's jurisdiction because I should not have to defend
The British court granted Mahfouz a default judgment and awarded him
hundreds of thousands of dollars; required me to prevent copies of Funding Evil from
reaching Britain; and ordered me to publish retractions drafted by his solicitors.
Libel tourism by Mahfouz and others like him made me realize something more was at
stake than my book and the particulars involving him. In response, I sued Mahfouz in
New York to declare his English judgment violated my rights under the First
Amendment. That litigation led the New York Legislature last May to enact New York's
version of the Free Speech Protection Act. Illinois followed suit last August.
Until the new statute protected me -- dubbed by the media as "Rachel's Law" --
Mahfouz's English judgment hung over my head like a sword of Damocles and kept me
up at night.
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. Mahfouz's libel tourism 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. In nearly forty cases, Mahfouz obtained settlements against his victims, all
with forced apologies, by the mere threat of libel litigation. His boasts about this on his
website to effectively silence and intimidate his critics in the media and academia.
Case law speaks of the "chilling effect" on free speech threatened by unrestrained libel
actions. My case demonstrates the chilling effect is no mere abstraction. I cannot travel
to the U.K., lest I be arrested 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.
I close with the immortal words of Justice Brandeis in Whitney v. California: