Deal With Wen Ho Lee Begets Warning of Yet More Claims

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A decision by five major news organizations to pay $750,000 to a nuclear scientist named in news stories as the target of an espionage investigation is prompting warnings that the unusual payment could embolden others aggrieved by government leaks and lead to more litigation involving the press.

The New York Times, Los Angeles Times, the Washington Post, ABC, and the Associated Press announced Friday that they agreed to the settlement in order to end litigation brought by the former scientist at the Los Alamos National Laboratory, Wen Ho Lee.

“The implications of this are just staggering,” a former executive director of the Reporters Committee for Freedom of the Press, Jane Kirtley, said in an interview yesterday. “I think this is blood money that has been paid here.”

As part of the settlement, the federal government also agreed to pay $895,000 to Lee to cover his legal costs in pursuing the case.

Ms. Kirtley said the payment from the news outlets was troubling because none of the news organizations or journalists were named as defendants in Lee’s lawsuit, which accused the federal officials of violating a 1974 law, the Privacy Act. The reporters were held in contempt in the case after they refused to identify their confidential sources for stories about Lee.

“The justice of this escapes me,” Ms. Kirtley said of the payment. “It’s the most creative way I’ve seen so far to do an end run around constitutional protections and get money anyway through this collateral attack.” She said the deal could encourage litigation and demands for payment in connection with mundane reports on hospital statements about those injured in crimes and accidents.

“Will it be abused by others? It will,” she said.

One of the immediate beneficiaries of the settlement with Lee may be another scientist, Steven Hatfill. Mr. Hatfill filed suit against the government after he was named by federal officials as a “person of interest” in an investigation into the mailing of anthrax powder in 2001 to news organizations and to the Senate. Neither Mr. Hatfill nor anyone else has been charged with a crime in connection with the anthrax mailings.

The payment to Lee suggests that Mr. Hatfill could look to news organizations to pay some or all of the damages he contends he incurred by being publicly linked with the anthrax probe.

An attorney for Mr. Hatfill, Mark Grannis, declined to comment for this article. However, it is clear Mr. Hatfill’s lawyers have been closely watching developments in Lee’s case.

Last year, when journalists unsuccessfully petitioned an appeals court in Washington to set aside an order compelling their testimony, Mr. Hatfill’s legal team filed a friend-of-the-court brief supporting Lee.

One press lawyer involved in last week’s settlement said he’s not certain that Mr. Hatfill will benefit from the deal. “There are different facts in that case,” said the attorney, who asked not to be named.

The need to unmask sources for use in Mr. Hatfill’s case may be less because some of the statements he is complaining about were on the record or attributed to specific government agencies. The attorney general at the time, John Ashcroft, referred in televised interviews to Mr. Hatfill’s status as a “person of interest” in the anthrax case.

Another contrast with Lee’s case is that Mr. Hatfill is suing a series of news organizations for libel. A case against Vanity Fair and Reader’s Digest is pending before a federal judge in White Plains, while a suit against the New York Times and one of its columnists, Nicholas Kristof, is before a federal court in Alexandria, Va.

The settlement with Lee came as the Supreme Court was considering petitions from the news organizations asking the court to take up the dispute.

One of the reporters subpoenaed by Lee, Robert Drogin of the Los Angeles Times, said the settlement was driven by fears of an adverse ruling from the justices. “We thought there was a great risk for the press if we took it before the Supreme Court,” Mr. Drogin told his newspaper. Some news organizations may also have decided they would rather take the fight to Congress, which is considering a federal shield law that would give reporters added protection.

The settlement will likely head off any involvement by the Supreme Court in the case, but the deal does not wipe from the books the appeals court decision last year upholding contempt findings against the reporters.

A lawyer involved in the settlement said the impetus came in large part from the government lawyers. “There ended up being a lot of movement on the government side,” the attorney said.

In a joint statement, the news organizations said they were “reluctant” to join in the settlement but concluded “this was the best course to protect our sources and to protect our journalists.”

From a strictly economic, shortterm perspective, the settlement was a good deal for the news organizations. Each journalist faced contempt fines which were to start at $500 a day and could escalate. The legal costs were also significant. CNN said the legal fees it paid for a reporter who once worked for the network, Pierre Thomas, exceeded $1 million.

The settlement also showed differences in strategy. The New York Times, which has a policy of not settling libel cases in America, agreed to pay Lee. CNN, which is quick to settle all kinds of thorny litigation, refused.

“We parted ways because we had a philosophical disagreement over whether it was appropriate to pay money to Wen Ho Lee or anyone else to get out from under a subpoena,” CNN said in a statement.

In the end, Mr. Thomas’s new employer, ABC, footed his portion of the bill.

Lee was arrested in 1999 and spent nine months in solitary confinement before prosecutors agreed to drop the most serious charges against him. He denied any espionage and pleaded guilty to a single felony count of improperly copying restricted data. The federal judge in the case apologized to Lee and President Clinton said he suspected the case was mishandled from the outset.

“Our aim was never to target or punish journalists,” an attorney for Lee, Betsy Miller, said. “It was to vindicate the injuries suffered by Dr. Lee resulting from unlawful leaks by government officials who disregarded their obligations under the Privacy Act in favor of pursuing their own political agendas.”


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