Funding Evil
Encyclopedia
Funding Evil: How Terrorism is Financed and How to Stop It is a book written by counterterrorism researcher Dr. Rachel Ehrenfeld
, director of the American Center for Democracy and the Economic Warfare Institute. It was published by Bonus Books
of Los Angeles, California
in August 2003.
who managed the drug profits for the Taliban and arranged money-laundering operations with the Russian Mafiya." Ehrenfeld goes on to argue that the international community should take stronger action against terrorist funding, including imposing economic sanctions on states that fund or foster terrorism, such as Saudi Arabia
, Iran
, Syria
, Sudan
, Indonesia
, Libya
North Korea
, and Malaysia. Ehrenfeld's book criticizes international aid organizations as well for their often inadvertent support of terror.
that the book is "brutally bipartisan and international in its bare-knuckled explanations of how political power and corporate greed have emboldened and strengthened the likes of Osama bin Laden and Yasar Arafat, while allowing future terrorists to be recruited and trained." He concluded that it "should be required reading for every elected and senior government official in the U.S. and Europe--especially those charged with counterterrorism responsibilities." Nan Goldberg reviewed the book in The Star Ledger, commenting that the book leads to the "inescapable conclusion that the West is funding its own destruction, not only in allowing its economy to become and remain dependent on oil, but also by providing a market for illegal services."
The book became the subject of international legal controversy when the Saudi businessman Khalid bin Mahfouz
and his sons, Abdulrahman and Sultan, alleged in the book to be terrorist financiers, sued the author for libel in London
. Although the book was not published in the United Kingdom
the lawsuit was made possible when 23 copies were purchased in England via online booksellers and a chapter of the book was published for a short time on ABC TV's website. Ehrenfeld refused to acknowledge the jurisdiction of the British and did not appear to defend the suit. The High Court of Justice
ruled against her by default. The Court ordered her and her publisher to pay £10,000 in damages
to each of the three plaintiff
s, with an additional £80,000 costs for a total of £
110,000 ($
225,000). Further distribution of the book from the United States was also prohibited with a previous injunction
being continued. Ehrenfeld was also ordered to publish a correction and apology, but had no intention of complying.
The judge noted that "the nature of the allegations which were made in the book...are of the most serious and defamatory kind." He added that under English law
, the defendants had the opportunity to counter the suit by attempting to "prove, on the balance of probabilities, that the defamatory allegations were substantially true." The Mahfouz family published a statement on their website, declaring that a number of "serious errors of fact" had been published about the family and that they "abhor violence as a way of achieving political or other objectives." Mahfouz had posted similar statements on his website regarding more than 40 similar libel cases and threats to sue against authors and publishers from many countries including the U.S.
Ehrenfeld accused Mahfouz of "forum shopping," using English libel law to chill investigations ("libel tourism
"). Her argument was based on the fact that Mahfouz resided in Jeddah, Saudi Arabia at the time of suit and had sued her in England as opposed to the United States because the libel law framework in the UK was more favorable to plaintiffs. This was rejected by Justice Eady. Mahfouz's English lawyer argued that "Our clients have brought proceedings in England because they maintain residences, transact business and have reputations to protect in this jurisdiction." A representative of Jones Day
, the US law firm representing Mahfouz, asserted that "to any objective observer, it would be Ms. Ehrenfeld who has been misusing the courts."
Ehrenfeld's actions following the initiation of Mahfouz's lawsuit were also noted by the court. A second edition of Funding Evil was published in the US with a new introduction commenting on the lawsuit and the book's cover was amended with the tag line "The book the Saudis don't want you to read."
for the Southern District of New York
. She sought a declaration that the English judgment could not be enforced in the US and that the allegations that she had made against Mahfouz were not defamatory under US law. Her complaint asserted that the Mahfouz's litigation violated her rights under the First Amendment to the United States Constitution
, arguing that Mahfouz "seriously chills legitimate and good-faith investigation into his behaviour. With the benefit of his vast financial resources, he has managed to silence his critics one at a time." In addition, she asserted that she had not properly been served notice and lacked the financial resources to fight bin Mafouz's lawsuit in England.
Her case was supported by free-press advocates in the United States who argued that the case underlined the incompatibility of the English legal system with US constitutional rights. Sandra Baron, the executive director of the Media Law Resource Center in New York, argued that "it's critically important that American journalists and scholars be able to publish on topics of profound importance without having to look over their shoulders to make sure someone isn't suing them in the United Kingdom." A number of major media organizations supported her case, including the Authors Guild, Forbes
, the American Society of Newspaper Editors
, the Association of American Publishers
and Amazon.com
. Major newspapers also supported the cause, including the New York Times, the Washington Post and the LA Times.
Mahfouz sought to have the New York case dismissed, claiming that the court had no jurisdiction over him and no power to rule in the issues raised by Ehrenfeld. Judge Richard C. Casey
found in his favour and dismissed the case in April 2006, ruling that the court lacked personal jurisdiction over Mahfouz under New York state law.
Ehrenfeld appealed the case to the United States Court of Appeals for the Second Circuit
. Ehrenfeld's appeal was again supported by many media organisations in a consolidated amicus curiae
brief, which argued that the "growing and dangerous threat of 'libel tourism' - the cynical and aggressive use of claimant-friendly libel laws in foreign jurisdictions ... has chilled and will continue to chill Dr Ehrenfeld's exercise of her free speech".
The Second Circuit referred the case to the New York Court of Appeals
, New York's highest appellate court
, emphasizing that the case had implications for all U.S. authors and publishers whose First Amendment rights were threatened by foreign libel rulings. The Court of Appeals was asked specifically to determine whether § 302(a)(1) of New York's civil procedure
rules conferred personal jurisdiction over a person who "(1) sued a New York resident in a non-U.S. jurisdiction; and (2) whose contacts with New York stemmed from the foreign lawsuit and whose success in the foreign suit resulted in acts that must be performed by the subject of the suit in New York. Based the Appellate Court's response, the Second Circuit, in its final decision, noted that if the law on New York State court jurisdiction were to change, Ehrenfeld could bring suit again.
Rory I. Lancman
(D-Queens) and Senator
Dean Skelos
(R-LI), introduced a "Libel Terrorism Protection Act" in both houses of the Legislature (bills no. A09652 and S 6676-B) in January 2008 to amend the New York civil procedures in response to the case. Free-press advocates in the author and publisher community strongly supported the passage of the bill.
The bill passed the New York State Legislature unanimously and was signed into law on April 29, 2008. The law enables New York courts to assert jurisdiction over anyone who obtains a foreign libel judgment against a New York publisher or writer, and limit enforcement to those judgments that satisfy "the freedom of speech and press protections guaranteed by both the United States and New York Constitutions."
The Libel Terrorism Protection Act "offers New Yorkers greater protection against libel judgments in countries whose laws are inconsistent with the freedom of speech granted by the United States Constitution.".
As of July 2010, six other states have passed analogs to Rachel's Law: Illinois, Florida, California, Tennessee, Maryland, and Utah. A federal bill based on Rachel's Law was pass unanimously out of the Judiciary Committee and will soon be considered by the U.S. Senate. The bill, S. 3518, the Securing and Protecting our Enduring and Established Constitutional Heritage Act (SPEECH Act), includes several measures aimed at closing loopholes in First Amendment protections for free speech. The act bars the enforcement of foreign libel judgments that do not meet with American standards of due process and First Amendment protections. The burden of proof is placed on the party suing for enforcement. The party suing to prevent enforcement may also sue the libel plaintiff for a declaration that the foreign libel judgment is "repugnant" to American constitutional law, and is entitled to attorney's fees for the legal proceedings.
Rachel Ehrenfeld
Dr. Rachel Ehrenfeld is an expert on terrorism and corruption-related topics. These include terror financing, economic warfare, and narco-terrorism. She has lectured on these issues in many countries, and has advised banking communities, law enforcement agencies, and governments.Dr. Ehrenfeld...
, director of the American Center for Democracy and the Economic Warfare Institute. It was published by Bonus Books
Bonus Books
Bonus Books is an American book publisher based in Los Angeles, California. The company publishes approximately 30 books per year, primarily "how to" books on subjects such as casino gambling, sports biographies, broadcasting and journalism. Frequent authors include Frank Scoblete and John Grochowski...
of Los Angeles, California
Los Angeles, California
Los Angeles , with a population at the 2010 United States Census of 3,792,621, is the most populous city in California, USA and the second most populous in the United States, after New York City. It has an area of , and is located in Southern California...
in August 2003.
Content
Ehrenfeld argues in the book that international networks are used by terrorist groups to finance terrorist activity worldwide. She describes the activities of individuals, various charities, banks, drug trafficking networks, money-laundering schemes and bribed officials, documenting the involvement of specific groups, organizations and individuals of being involved. The involvement of Iran, Hezbollah, and al Qaeda in the drug trade is given particular attention. Ehrenfeld asserts that "it was bin LadenOsama bin Laden
Osama bin Mohammed bin Awad bin Laden was the founder of the militant Islamist organization Al-Qaeda, the jihadist organization responsible for the September 11 attacks on the United States and numerous other mass-casualty attacks against civilian and military targets...
who managed the drug profits for the Taliban and arranged money-laundering operations with the Russian Mafiya." Ehrenfeld goes on to argue that the international community should take stronger action against terrorist funding, including imposing economic sanctions on states that fund or foster terrorism, such as Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
, Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
, Syria
Syria
Syria , officially the Syrian Arab Republic , is a country in Western Asia, bordering Lebanon and the Mediterranean Sea to the West, Turkey to the north, Iraq to the east, Jordan to the south, and Israel to the southwest....
, Sudan
Sudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...
, Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
, Libya
Libya
Libya is an African country in the Maghreb region of North Africa bordered by the Mediterranean Sea to the north, Egypt to the east, Sudan to the southeast, Chad and Niger to the south, and Algeria and Tunisia to the west....
North Korea
North Korea
The Democratic People’s Republic of Korea , , is a country in East Asia, occupying the northern half of the Korean Peninsula. Its capital and largest city is Pyongyang. The Korean Demilitarized Zone serves as the buffer zone between North Korea and South Korea...
, and Malaysia. Ehrenfeld's book criticizes international aid organizations as well for their often inadvertent support of terror.
Reviews
The book received a mixed reaction from reviewers. William B. Scott wrote in Aviation Week & Space TechnologyAviation Week & Space Technology
Aviation Week & Space Technology, often abbreviated Aviation Week or AW&ST, is a weekly magazine owned and published by McGraw-Hill...
that the book is "brutally bipartisan and international in its bare-knuckled explanations of how political power and corporate greed have emboldened and strengthened the likes of Osama bin Laden and Yasar Arafat, while allowing future terrorists to be recruited and trained." He concluded that it "should be required reading for every elected and senior government official in the U.S. and Europe--especially those charged with counterterrorism responsibilities." Nan Goldberg reviewed the book in The Star Ledger, commenting that the book leads to the "inescapable conclusion that the West is funding its own destruction, not only in allowing its economy to become and remain dependent on oil, but also by providing a market for illegal services."
Libel controversy
Khalid bin Mahfouz
Khalid bin Mahfouz was a wealthy Saudi Arabian businessman residing in Ireland. He was accused of supporting al-Qaeda.As of 2002, he was believed to be confined in a hospital in Taif by Saudi authorities...
and his sons, Abdulrahman and Sultan, alleged in the book to be terrorist financiers, sued the author for libel in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
. Although the book was not published in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
the lawsuit was made possible when 23 copies were purchased in England via online booksellers and a chapter of the book was published for a short time on ABC TV's website. Ehrenfeld refused to acknowledge the jurisdiction of the British and did not appear to defend the suit. The High Court of Justice
High Court of Justice
The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...
ruled against her by default. The Court ordered her and her publisher to pay £10,000 in damages
Damages
In law, damages is an award, typically of money, to be paid to a person as compensation for loss or injury; grammatically, it is a singular noun, not plural.- Compensatory damages :...
to each of the three plaintiff
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
s, with an additional £80,000 costs for a total of £
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
110,000 ($
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
225,000). Further distribution of the book from the United States was also prohibited with a previous injunction
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...
being continued. Ehrenfeld was also ordered to publish a correction and apology, but had no intention of complying.
The judge noted that "the nature of the allegations which were made in the book...are of the most serious and defamatory kind." He added that under English law
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
, the defendants had the opportunity to counter the suit by attempting to "prove, on the balance of probabilities, that the defamatory allegations were substantially true." The Mahfouz family published a statement on their website, declaring that a number of "serious errors of fact" had been published about the family and that they "abhor violence as a way of achieving political or other objectives." Mahfouz had posted similar statements on his website regarding more than 40 similar libel cases and threats to sue against authors and publishers from many countries including the U.S.
Ehrenfeld accused Mahfouz of "forum shopping," using English libel law to chill investigations ("libel tourism
Libel tourism
Libel tourism is a term first coined by Geoffrey Robertson to describe forum shopping for libel suits. It particularly refers to the practice of pursuing a case in England and Wales, in preference to other jurisdictions, such as the United States, which provide more extensive defences for those...
"). Her argument was based on the fact that Mahfouz resided in Jeddah, Saudi Arabia at the time of suit and had sued her in England as opposed to the United States because the libel law framework in the UK was more favorable to plaintiffs. This was rejected by Justice Eady. Mahfouz's English lawyer argued that "Our clients have brought proceedings in England because they maintain residences, transact business and have reputations to protect in this jurisdiction." A representative of Jones Day
Jones Day
Jones Day is an international law firm founded in Cleveland, Ohio on March 1, 1893, by Judge Edwin J. Blandin and William Lowe Rice. Jones Day is the eighth largest law firm in the world by revenue, and the fourth highest grossing firm in the US with annual revenues of US$1.4 billion...
, the US law firm representing Mahfouz, asserted that "to any objective observer, it would be Ms. Ehrenfeld who has been misusing the courts."
Ehrenfeld's actions following the initiation of Mahfouz's lawsuit were also noted by the court. A second edition of Funding Evil was published in the US with a new introduction commenting on the lawsuit and the book's cover was amended with the tag line "The book the Saudis don't want you to read."
Counter-suit
In December 2004, before the English libel suit had concluded, Ehrenfeld pre-emptively counter-sued bin Mahfouz in the United States District CourtUnited States district court
The United States district courts are the general trial courts of the United States federal court system. Both civil and criminal cases are filed in the district court, which is a court of law, equity, and admiralty. There is a United States bankruptcy court associated with each United States...
for the Southern District of New York
United States District Court for the Southern District of New York
The United States District Court for the Southern District of New York is a federal district court. Appeals from the Southern District of New York are taken to the United States Court of Appeals for the Second Circuit The United States District Court for the Southern District of New York (in case...
. She sought a declaration that the English judgment could not be enforced in the US and that the allegations that she had made against Mahfouz were not defamatory under US law. Her complaint asserted that the Mahfouz's litigation violated her rights under the First Amendment to the United States Constitution
First Amendment to the United States Constitution
The First Amendment to the United States Constitution is part of the Bill of Rights. The amendment prohibits the making of any law respecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing on the freedom of the press, interfering...
, arguing that Mahfouz "seriously chills legitimate and good-faith investigation into his behaviour. With the benefit of his vast financial resources, he has managed to silence his critics one at a time." In addition, she asserted that she had not properly been served notice and lacked the financial resources to fight bin Mafouz's lawsuit in England.
Her case was supported by free-press advocates in the United States who argued that the case underlined the incompatibility of the English legal system with US constitutional rights. Sandra Baron, the executive director of the Media Law Resource Center in New York, argued that "it's critically important that American journalists and scholars be able to publish on topics of profound importance without having to look over their shoulders to make sure someone isn't suing them in the United Kingdom." A number of major media organizations supported her case, including the Authors Guild, Forbes
Forbes
Forbes is an American publishing and media company. Its flagship publication, the Forbes magazine, is published biweekly. Its primary competitors in the national business magazine category are Fortune, which is also published biweekly, and Business Week...
, the American Society of Newspaper Editors
American Society of Newspaper Editors
The American Society of News Editors is a membership organization for editors, producers or directors in charge of journalistic organizations or departments, deans or faculty at university journalism schools, and leaders and faculty of media-related foundations and training organizations...
, the Association of American Publishers
Association of American Publishers
The Association of American Publishers is the national trade association of the American book publishing industry. AAP has more than 300 members, including most of the major commercial publishers in the United States, as well as smaller and non-profit publishers, university presses and scholarly...
and Amazon.com
Amazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
. Major newspapers also supported the cause, including the New York Times, the Washington Post and the LA Times.
Mahfouz sought to have the New York case dismissed, claiming that the court had no jurisdiction over him and no power to rule in the issues raised by Ehrenfeld. Judge Richard C. Casey
Richard C. Casey
Richard Conway Casey was a United States federal judge for the Southern District of New York. He was nominated by President Bill Clinton on July 16, 1997 to a seat vacated by Charles S. Haight, Jr., confirmed by the Senate on October 21, and commissioned on October 24 of the same year...
found in his favour and dismissed the case in April 2006, ruling that the court lacked personal jurisdiction over Mahfouz under New York state law.
Ehrenfeld appealed the case to the United States Court of Appeals for the Second Circuit
United States Court of Appeals for the Second Circuit
The United States Court of Appeals for the Second Circuit is one of the thirteen United States Courts of Appeals...
. Ehrenfeld's appeal was again supported by many media organisations in a consolidated amicus curiae
Amicus curiae
An amicus curiae is someone, not a party to a case, who volunteers to offer information to assist a court in deciding a matter before it...
brief, which argued that the "growing and dangerous threat of 'libel tourism' - the cynical and aggressive use of claimant-friendly libel laws in foreign jurisdictions ... has chilled and will continue to chill Dr Ehrenfeld's exercise of her free speech".
The Second Circuit referred the case to the New York Court of Appeals
New York Court of Appeals
The New York Court of Appeals is the highest court in the U.S. state of New York. The Court of Appeals consists of seven judges: the Chief Judge and six associate judges who are appointed by the Governor to 14-year terms...
, New York's highest appellate court
Appellate court
An appellate court, commonly called an appeals court or court of appeals or appeal court , is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal...
, emphasizing that the case had implications for all U.S. authors and publishers whose First Amendment rights were threatened by foreign libel rulings. The Court of Appeals was asked specifically to determine whether § 302(a)(1) of New York's civil procedure
Civil procedure
Civil procedure is the body of law that sets out the rules and standards that courts follow when adjudicating civil lawsuits...
rules conferred personal jurisdiction over a person who "(1) sued a New York resident in a non-U.S. jurisdiction; and (2) whose contacts with New York stemmed from the foreign lawsuit and whose success in the foreign suit resulted in acts that must be performed by the subject of the suit in New York. Based the Appellate Court's response, the Second Circuit, in its final decision, noted that if the law on New York State court jurisdiction were to change, Ehrenfeld could bring suit again.
Subsequent legislative activity
Following the Second Circuit decision, two members of the New York State Legislature, AssemblymanNew York State Assembly
The New York State Assembly is the lower house of the New York State Legislature. The Assembly is composed of 150 members representing an equal number of districts, with each district having an average population of 128,652...
Rory I. Lancman
Rory I. Lancman
Rory I. Lancman is a New York State Assembly member representing the 25th Assembly District in Queens, New York.Lancman was born and raised in Queens, where he has lived in what is now the 25th Assembly District for thirty-two years. He is a graduate of New York City Public School 164, Parsons...
(D-Queens) and Senator
New York State Senate
The New York State Senate is one of two houses in the New York State Legislature and has members each elected to two-year terms. There are no limits on the number of terms one may serve...
Dean Skelos
Dean Skelos
Dean G. Skelos is an American politician and the Republican Temporary President and Majority Leader of the New York State Senate. Skelos represents District 9 in the State Senate, which comprises the southwest region of Nassau County. He is the second Long Islander to hold the position of Majority...
(R-LI), introduced a "Libel Terrorism Protection Act" in both houses of the Legislature (bills no. A09652 and S 6676-B) in January 2008 to amend the New York civil procedures in response to the case. Free-press advocates in the author and publisher community strongly supported the passage of the bill.
The bill passed the New York State Legislature unanimously and was signed into law on April 29, 2008. The law enables New York courts to assert jurisdiction over anyone who obtains a foreign libel judgment against a New York publisher or writer, and limit enforcement to those judgments that satisfy "the freedom of speech and press protections guaranteed by both the United States and New York Constitutions."
The Libel Terrorism Protection Act "offers New Yorkers greater protection against libel judgments in countries whose laws are inconsistent with the freedom of speech granted by the United States Constitution.".
As of July 2010, six other states have passed analogs to Rachel's Law: Illinois, Florida, California, Tennessee, Maryland, and Utah. A federal bill based on Rachel's Law was pass unanimously out of the Judiciary Committee and will soon be considered by the U.S. Senate. The bill, S. 3518, the Securing and Protecting our Enduring and Established Constitutional Heritage Act (SPEECH Act), includes several measures aimed at closing loopholes in First Amendment protections for free speech. The act bars the enforcement of foreign libel judgments that do not meet with American standards of due process and First Amendment protections. The burden of proof is placed on the party suing for enforcement. The party suing to prevent enforcement may also sue the libel plaintiff for a declaration that the foreign libel judgment is "repugnant" to American constitutional law, and is entitled to attorney's fees for the legal proceedings.
External links
- Publisher's description of Funding Evil
- Interview with the author discussing the book
- Information from the bin Mahfouz family on the Funding Evil litigation
- NYS Gov. Paterson's press release discussing the new protective law
- Court judgments:
- Summary of the judgment of Mr Justice Eady, 3 May 2005
- Full text of the English High Court judgment, 3 May 2005
- Full text of the US District Court judgment, 25 April 2006
- Full text of the New York Court of Appeals opinion, 20 December 2007