Abuses of the system

Frank S.

L'homme qui rit
Sep 28, 2006
The Mountains of Madness

Libel Tourism
Anxious over allegations of terrorist ties, rich Saudis are trying to silence their critics in court

Oct. 22, 2003 - A group of wealthy Saudi businessmen have opened up a new front in the terror wars. Confronted with inquiries into their alleged ties to the financing of Islamic terror groups, they have launched an ambitious campaign to clear their names by filing defamation suits in the British courts.

In a growing phenomenon that lawyers have dubbed “libel tourism,” the Saudis are seeking to invoke Britain’s plaintiff-friendly libel laws to silence critics in the United States and in the international community.

The legal actions come at a time when American lawyers for the families of September 11 victims are aggressively pursuing a $1 trillion lawsuit in the United States that accuses dozens of Saudi royal princes and wealthy businessmen of providing funding that led to the terror attacks. By targeting U.S. media organizations and others in the British courts, some of the Saudis may hope to shift the focus and win judgements that will bolster their position in the United States.

The opening salvo in this Saudi counteroffensive may start as early as this December when The Wall Street Journal goes to trial in a libel action filed against it by two members of the Jeddah-based Jameel family, which operates the largest independent Toyota dealership in the world.

The U.S. business daily, which publishes a European edition, is also the target of a separate lawsuit filed by the family-run Al-Rajih Banking and Investment Corp., a Saudi group heavily involved in “Islamic” banking activities. Both lawsuits stem from a February 2002 Journal story reporting that Saudi authorities were monitoring about 150 bank accounts for possible suspicious activity related to terrorism, among them, the Journal claimed, accounts maintained by businesses related to the Jameels and Al-Rajihs.

In addition, Khalid bin Mahfouz, a wealthy Saudi who used to head one of the kingdom’s largest commercial banks, has filed suit with his son Abdulrahman in the British courts against Jean Charles Brisard, chief investigator for the lawyers representing the September 11 victims in the United States and the author of a French book—later published in the United States—about the financing of terrorism and the family of Al Qaeda leader Osama bin Laden. Mahfouz is also suing the British weekly newspaper The Mail on Sunday for an article published a year ago which carried the headline BIN LADEN’S TEXAN BANKER HAUNTS BUSH, which repeated allegations from the French author’s book.

In filing the action, the Saudi businessmen and their lawyers are seeking to take advantage of what even U.S. investigators acknowledge has been a recurring problem in their efforts to unravel the financing of international terror groups: a lack of hard evidence showing how the money flows to terror cells. Despite stacks of intelligence reports linking various Saudi charities and businesses to Al Qaeda, U.S. investigators have found it difficult to trace financial transactions involving specific terror cells or operations—and even more challenging to build criminal cases against suspected individual financiers.

The dearth of hard evidence has emboldened some Saudi business figures who say they have been unjustly tarred in the course of U.S. investigations. The British courts provide a favorable venue for recourse. Unlike the United States, British libel law places the burden of proof on the defendant—usually the media—to prove that what they published or broadcast was true.

Under British libel law, said a lawyer close to some of the current cases, the courts presume that a published article is false rather than true. All a plaintiff has to prove is that it was published and that its contents were likely to damage the subject of the article by holding them up to public “odium, ridicule or contempt.” Under the British system, losers in libel cases not only have to pay damages awarded by a jury but also usually have to pay the plaintiff’s legal fees, which sometimes can run to one million British pounds or more. Because of the high financial risks of libel cases, and the draconian nature of British law, libel plaintiffs in Britain sometimes file—or threaten to file—lawsuits to deter other media from reprinting a particularly sensitive story, then let the lawsuit quietly lapse once the controversy has blown over. (In recent years, however, British courts have made it a bit easier for libel defendants by allowing the media to claim that there was an overwhelming “public interest” in publishing a particular controversial story and that publication was undertaken only after exhaustive efforts were made to verify facts and contact parties for comment).

After one recent Saudi-related hearing in a wood-paneled courtroom inside London’s gothic Law Courts complex, one of the British barristers (trial lawyers) in the case told journalists “Say what you like about Osama bin Laden. He’s done wonders for the defamation [libel] bar.”

There has so far been remarkably little attention given to the British lawsuits—in large part because British law greatly limits pretrial publicity that could influence potential jury members. Lawyers and principals contacted by NEWSWEEK this week were reluctant to discuss the cases, although Brisard dismissed the action against him as a “trick” aimed at undermining the lawsuit by the September 11 families in the United States. Norman Chapman, a British lawyer suing the Journal on behalf of the Al-Rajih banking group, said his client had been “vigorously pursuing” the paper for some time. “We want to put the record straight on behalf of our clients.” Andrew Stephenson, the lawyer for the Jameel family’s action against the Journal, said it was natural for his clients to sue in England given their substantial financial interests in the country. “If you’re a Japanese and hit by a car in Trafalgar Square, then you can sue in the British courts.”

A lawyer for The Wall Street Journal declined to comment on the suits. But there are signs that the paper plans to defend itself vigorously. Following recent submissions from the Journal’s principal barrister, prominent human-rights lawyer Geoffrey Robertson QC, the judge postponed the trial date in the Al-Rajih case. The paper wants to try to prove that its allegations against the Al-Rajih’s were “justified” by showing that the bank had provided services to controversial Islamic charities, including the Muslim World League, the International Islamic Relief Organization and the Al Haramain Islamic Foundation. All three have been repeatedly linked in U.S. court documents to alleged terrorist financing, and the Al-Haramain foundation was designated a terrorist entity by the U.S. government in March 2002. The Al-Rajih family is also connected to several charities and businesses in the Washington area that were raided by U.S. Customs and FBI investigators in the winter of 2002 as part of a terrorism-financing investigation.

Nobody from the Al-Rajih family or its banking businesses has been charged in the investigation. But in a lengthy affidavit recently unsealed by a U.S. judge at The Wall Street Journal’s request, a Customs agent said an investigation into possible U.S. tax violations involves U.S.-based executives of a Virginia foundation that federal investigators say was set up to handle Al-Rajih family funds.


French and Belgium judgments against Khalid Bin Mahfouz
Khalid Bin Mahfouz brought libel actions against me and my companies in the UK based on presumed defamatory statements made in reports published on the Internet. UK courts are very convenient for this purpose as British law puts the burden in libel cases on the defendant to prove their accusations. On this issue, see the Newsweek article on "Libel Tourism" of October 22, 2003. Khalid Bin Mahfouz obtained a default judgment of the High Court of London against me on July 1, 2004. Since then, he tried to enforce this judgment in France (my country of citizenship) and Switzerland (my country of residence). A French decision of April 28, 2005 (Kbm French decision 042805.pdf) lifted preliminary measures to enforce the UK decision and condemned Khalid Bin Mahfouz to pay expenses and fees in connection to this action. In addition, an appeal on the enforcement itself is pending. Khalid Bin Mahfouz also sued me in Belgium where his claim was dismissed by a decision of the High Court of Brussels on December 21, 2004 (Kbm_belgium.pdf).
Yeah....that will clear your name... lol. Actions speak louder than lawsuits.