Funding Evil

Funding Evil

Infobox Book |
name = Funding Evil: How Terrorism is Financed and How to Stop It

image_caption = Cover of the first edition of "Funding Evil"
author = Rachel Ehrenfeld
country = United States of America
language = English
genre = Current affairs
publisher = Bonus Books
release_date = 23 August 2003
media_type =
pages = 267
isbn = ISBN 1566251966

"Funding Evil: How Terrorism is Financed and How to Stop It" is a book written by counterterrorism researcher Dr. Rachel Ehrenfeld, the director of the [ American Center for Democracy] and the Center for the Study of Corruption & the Rule of Law. It was published by Bonus Books of Los Angeles, California in August 2003.


Ehrenfeld argues in the book that a clandestine international network is used by Islamic terrorist groups to finance terrorist activity worldwide. She describes the activities of religious-based charities, drug networks, money-laundering schemes and bribed officials, naming specific groups, organizations and individuals whom she asserts are involved. The involvement of Al Qaeda in the heroin trade in Afghanistan is given particular attention, with Ehrenfeld asserting that "it was bin Laden who managed the drug profits for the Taliban and arranged money-laundering operations with the Russian Mafia." 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 and North Korea.William B. Scott, " [ In Review; Funding Evil: How Terrorism is Financed--and How to Stop it By Rachel Ehrenfeld] ". "Aviation Week & Space Technology", Volume 160, No. 3, 19 January 2004, p. 420]


The book received a mixed reaction from reviewers. William B. Scott wrote in "Aviation Week & Space Technology" 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." Writing in the "Washington Times", Joshua Sinai described it as "disappointing" for its dependence on secondary sources and "unnecessarily polemical", particularly in its "overheated" descriptions of Yasser Arafat's personal wealth. Nonetheless, he concluded that it was overall "a thoughtful treatment of an often neglected aspect of terrorism and a major contribution to our understanding of what policy measures are needed to thwart the financial underpinnings of this growing threat." [Joshua Sinai, " [ Anthrax, al Qaeda, funds, and Kashmir] ". "Washington Times", 16 November 2003, p. B06] 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." [Nan Goldberg, " [ What we're reading in November] ". "The Star-Ledger", 2 November 2003, p. 5]

Libel controversy

The book became the subject of international legal controversy when the Saudi businessman Sheikh Khalid bin Mahfouz and his sons Abdulrahman bin Mahfouz and Sultan bin Mahfouz, named in the book as alleged terrorist fundraisers, sued the author for libel in London. Although the book was not published in the United Kingdom the lawsuit was made possible when UK residents purchased 23 copies via online booksellers. Ehrenfeld did not defend herself and was found in default of the suit at the High Court of Justice. In May 2005 Justice Eady ruled that Ehrenfeld's accusations against the Mahfouzes were false and ordered her and her publisher to pay £10,000 in damages to each of the three plaintiffs, with an additional £80,000 costs for a total of £110,000 ($225,000). Further distribution of the libels in England and Wales was also prohibited with a previous injunction being continued.David Pallister, " [ US author mounts 'libel tourism' challenge] ". "The Guardian, 15 November 2007] Ehrenfeld was also ordered to publish a correction and apology, but had no intention of complying.Dominic Kennedy, " [ Libel and money - why British courts are choice of the world] ". "The Times", 19 May 2005] " [ English High Court awards substantial damages to Sheikh Khalid Bin Mahfouz and his sons] ", Al Bawaba, 16 June 2005]

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 claimants have indicated that they are quite prepared to meet any such defence on its merits. Unsurprisingly, no one has ever put forward such a defence or any material which would be capable of substantiating a plea of justification." Instead, he commented, all the defendants had "been able to advance, it is said, is material of a flimsy and unreliable nature, and the claimants have taken the trouble to demonstrate its lack of merit." The bin 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."Larry Neumeister, " [ Book Author Sues Saudi Billionaire] ". Associated Press, 10 December 2004]

Although Ehrenfeld accused bin Mahfouz of "forum shopping" or using English libel law to chill investigations ("libel tourism"), this was rejected by Justice Eady. He described Ehrenfeld's arguments as "tendentious and a misrepresentation of the true position. The claimants are not hiding behind anything and are prepared to meet the defendants head on as to the merits of the claim." The sheikh'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."Sara Ivry, " [ MediaTalk; Seeking U.S. Turf for a Free-Speech Fight] ". "New York Times", 4 April 2005]

Ehrenfeld's actions following the initiation of bin 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." Justice Eady commented that "It appears, therefore, that the defendants are trying to cash in on the fact that libel proceedings have been brought against them in this jurisdiction without being prepared to defend them on the merits."


In December 2004, before the English libel suit had concluded, Ehrenfeld pre-emptively counter-sued bin Mahfouz in the United States District Court 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 bin Mahfouz were not defamatory under US law. Her complaint asserted that the sheikh's litigation against his detractors violated her rights under the First Amendment to the United States Constitution, arguing that it "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." 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 British legal system and 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 [Brendan O'Neill, " [ A town called Sue] ". "New Statesman, 24 July 2006] Samuel A. Abady & Harvey Silverglate, [ 'Libel tourism' and the war on terror"] . "Boston Globe", 7 November 2006]

Bin Mahfouz sought to get the New York case struck out because 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 it lacked personal jurisdiction over bin Mahfouz under New York state law, and therefore there was no need to address the queston of subject-matter jurisdiction. [ [ Memorandum and Order of April 25, 2006] , "Rachel Ehrenfeld v. Khalid Salim a Bin Mahfouz", United States District Court Southern District of New York, 04 Civ. 9641 (RCC)] His lawyers declared that he had no intention of seeking to enforce the judgment in the US.

Ehrenfeld appealed the case to the United States Court of Appeals for the Second Circuit, which referred the case to the New York Court of Appeals, New York's highest appellate court. The court 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. [ [ Opinion of the New York Court of Appeals] in "Rachel Ehrenfeld v. Khalid Salim a Bin Mahfouz", 20 December 2007]

The appeal was again supported by many media organisations in a consolidated "amici curiae" (friend of the court) 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 court ruled against Ehrenfeld in December 2007, affirming the lower court's ruling that the state had no jurisdiction in the case. The Appeals Court judges emphasized that they were not ruling on the propriety of the original English judgment but only on the question of whether there was "a proper basis for jurisdiction" for Ehrenfeld's suit against bin Mahfouz. [Jim Milliot, " [ Appeals Court Reject’s Ehrenfeld’s Bid to Block ‘Libel Tourism’] ". "Publishers Weekly, 20 December 2007]

ubsequent legislative activity

With the failure of the case, free-press advocates called for legislation to be passed to ensure that libel judgments issued by foreign courts could not be enforced in the United States. Michael Broyde and Deborah Lipstadt - whose book "Denying the Holocaust" was the subject of a famous UK libel case - wrote in the "New York Times" that "because the differences in American and British libel laws are drastic, special protections are needed to uphold our tradition of free speech." [Michael J. Broyde & Deborah E. Lipstadt, [ Home Court Advantage] ". "New York Times", 11 October 2007]

Two members of the New York State Legislature, Assemblyman Rory I. Lancman (D-Queens) and Senator Dean Skelos (R-LI), introduced a "Libel Terrorism Reform 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. The bill would enable 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." [Samuel A. Abady & Harvey Silverglate, " [ Rachel's Law: NY's 'Libel-Tourism' Fix] ". "new York Post, 25 February 2008] The bill passed the Senate unanimously but ran into problems in the Assembly, where an advisory committee to the state court administrator opposed the bill on the grounds that it may be unconstitutional.

On 01-May-2008, NYS Governor David Paterson signed into law a bill "that 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." [ [ Governor Paterson Signs Legislation Protecting New Yorkers Against Infringement Of First Amendment Rights By Foreign Libel Judgments ] ] .


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

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