World War II began long before the outbreak of military hostilities, with the Nazi campaign to silence its critics. Yet 63 years after the end of World War II, the U.S. today faces new threats to free speech.
Islamic terrorists and their advocates have increasingly succeeded in silencing critics of hatred and inhumanity, much as the Nazis silenced theirs, through intimidation — but also now, through the courts.
The presidential candidates should all speak up, but unfortunately, none have yet addressed the issue.
Hillary Clinton has a gigantic $10 million “conflict of interest,” in the form of Saudi donations to the Clinton Library and Foundation, according to former Clinton political consultant Dick Morris and Eileen McGann. But Democrats Barak Obama and John Edwards and Republicans Mitt Romney, John McCain, and Mike Huckabee have also been eerily silent.
The battle lines are particularly sharp in New York State. There, the Court of Appeals ruled on Dec. 20, 2007 that under current “long-arm” statutes governing business transactions, New York lacks jurisdiction to protect author Rachel Ehrenfeld, whom Saudi billionaire Khalid Bin Mahfouz sued for “libel” in London’s High Court of Justice. Mahfouz sued Ehrenfeld after the 2003, U.S. publication of her book Funding Evil: How Terrorism is Financed–and How to Stop It, which noted that Mahfouz and his family financially supported al-Qaeda and other “Islamist terror groups.”
Only 23 copies of Ehrenfeld’s book sold in England–over over the Internet–but Mahfouz won in the U.K. by default. On learning that former CIA director R. James Woolsey wrote the book’s foreword, U.K. Justice David Eady stated, “Say no more. I award you a judgment by default, and if you want, an injunction, too.” He ordered Ehrenfeld to apologize, retract, pay $225,913.37 in damages and destroy remaining copies. In a case still pending before the Second Circuit Court of Appeals, Ehrenfeld asked the Southern District Court of New York to protect the First Amendment and rule the U.K. judgment unenforceable here.
To protect authors, journalists and First Amendment freedoms, Sen. Dean G. Skelos and Assemblyman Rory I. Lancman on January 13 introduced bi-partisan legislation to establish local jurisdiction. This would deter foreigners from suing and imperiling New York writers and the First Amendment, with the obvious intent of changing U.S. libel laws via overseas courts.
Authors in many states, indeed, nationwide, hope New York will swiftly pass the legislation, and that other states and the U.S. Congress will follow the New York lead. The life blood of Democracy could hang in the balance.
No country has free speech protections as strong as those in the U.S., noted First Amendment attorney Floyd Abrams, who was present Jan. 13 and supports the New York state bill. Moreover, many U.S. federal documents and Congressional testimonies have implicated Mahfouz for terror financing.
Yet in the last decade, the Saudi billionaire has threatened or successfully sued over 40 authors and publishers in the United Kingdom–including numerous Americans–for reports on terror funding that mentioned him. Without trying a single case on its merits, Mahfouz extracted settlements, default judgments, apologies, retractions and fines in all his British “libel” cases–except in the case of Ehrenfeld. Mahfouz’ suits, and others like them, have created an enormous “chilling effect” on free speech, says Ehrenfeld’s New York-based attorney, Daniel Kornstein.
The threat of lawsuits has so the publishing community that many authors are censoring themselves, and many publishers simply refuse to address terror funding at all.
To safeguard America’s publishing capital, New York legislators of all stripes should rush to co-sponsor and pass the new bill. As Senate deputy majority leader Skelos from Rockville Center and Queens Democrat Lancman noted in a Jan. 13 news conferenceoutside the New York Public Library, the London ruling against Ehrenfeld opened the door to “assault by foreign nationals seeking to silence public debate in America” despite the U.S. Constitutional guarantee of protected free-speech.
The Skelos and Lancman bill would amend New York law to give state courts jurisdiction in cases like Ehrenfeld’s. Local courts could declare foreign judgments unenforceable unless the foreign country provides free-speech protections equivalent to those of the First Amendment. This would be especially helpful in cases concerning reporting on terrorism–but also in other frivolous libel cases filed to intimidate American writers and publishers.
The legislation will “protect American authors and journalists from being dragged into kangaroo courts over phony baloney libel charges in jurisdictions that don’t respect freedom of speech and of the press as we do here in the United States,” Lancman said.
Michael Savage Interviews Alyssa A. Lappen
Radio appearance | Jan. 23, 2008
Did Citigroup understand Shari’a law when it jumped into Islamic banking in the 1950s? Alyssa A. Lappen explains the enormous downside risks of importing medieval Islamic religious laws, via Muslim Brotherhood mechanisms, into secular Western banking. Since Islam claims ownership of everything, in trust for Allah, Muslims can confiscated assets from non-Muslims indiscriminately—and did so from Citi, which nevertheless later expanded Islamic banking operations.
by Dr. Rachel Ehrenfeld and Alyssa A. Lappen Human Events | Jan. 23, 2008
All presidential candidates promise to fix our economy, but no one discusses the need to better safeguard our financial markets. The Committee on Foreign Investment in the U.S. (CFIUS), approved Bourse Dubai’s purchase of 20% of the America’s largest electronic exchange, New York-based Nasdaq, on Dec. 31, 2007.
This may soon give Dubai access to the troubled Boston Stock Exchange (BSE), through Nasdaq’s proposed BSE acquisition, which is now pending before the Securities and Exchange Commission (SEC).
“Foreign ownership of our capital markets may make it more difficult for shareholders to obtain information about the inner workings of the stock market,” notes Brent Baker, a former SEC Special Counsel. Nasdaq, like most U.S. exchanges, 5,100 brokerage houses and registered securities representatives, is regulated by the Washington, D.C.-based Financial Industry Regulatory Authority (FINRA). The Philadelphia Stock Exchange (PHLX), however, and the problematic BSE with its rather murky track record of non-compliance, retained their independent self-regulatory organization (SRO) status. Now, Nasdaq plans to purchase both.
“What do the regulators currently do to monitor the BSE, which up until now had been sanctioned several times for failure to regulate itself?” Baker wonders. Indeed, the SEC sanctioned the BSE in 1999 and 2007 for illegal practices. The September 5, 2007 sanction was for the BSE failure to enforce its own rules or comply with a 1999 SEC directive, and for illegal trading activities – including forward trading, from 1999 through 2004. On the same day, the U.S. District Court for the District of Massachusetts ordered former BSE President James Crofwell, to pay a $75,000 penalty “for aiding and abetting the Exchange’s failure to enforce its rules.”
The BSE history raises especially thorny questions about market manipulation and the possibility that unsupervised foreigner investors and securities firms may borrow or manipulate U.S. company stocks, adversely affecting domestic markets and further eroding investor confidence.
Since Bourse Dubai promotes its status as the world’s first and leading Islamic securities exchange, its influence could affect the listings on Nasdaq. Dubai might leverage the “sovereign immunity” of both the BSE and PHLX to list and delist companies on Nasdaq. SEC rules in that case could be irrelevant, and the effects on the U.S. capital markets and economy could be enormous. For example, pharmaceutical companies producing Viagra and contraceptives could be delisted, as could companies based in or doing business with Israel.
“This is a slippery slope,” says Baker, “if the SEC approves the Nasdaq’s purchase of the BSE and PHLX, and they both keep their SRO licenses.”
American regulators “believe in honest and complete disclosure and people invest with the understanding that they will make or loose money depending on their judgment, the markets and the economy,” says John W. Moscow, former Assistant District Attorney and Deputy Chief of Investigations under New York District Attorney Robert Morgenthau.
“In England,” where Dubai will shortly acquire Nasdaq’s 28% stake in the London Stock Exchange, he says, “the governing philosophy is that if God did not want [investors] shorn, he would not have made them sheep.”
The integrity of regulations in Dubai is a more important problem. To attract business, “they are willing to omit the costs of regulation and compliance that exist elsewhere.” Dubai traders deal in arms, women, drugs, and money laundering. “As long as [traders] deliver the money, and so long as the market does what it is supposed to do, it is sufficient,” says Moscow.
The U.S. markets are already in big trouble, says Moscow, given the high trading volume between U.S. and foreign exchanges through shadow accounts to the Federal Reserve Board’s Depository Trust Corporation (DTC), Euroclear and other clearing systems. Nasdaq’s acquisition of the BSE only worsens the problem.
The same owner, through many different foreign corporate entities, can buy majority stakes in many companies and manipulate the market. With no regulation of these trades, no one would be the wiser. “The bad guys are going to eat us alive,” Moscow says.
Indeed, SEC chairman Christopher Cox has now proposed allowing foreign exchanges to sell directly to U.S. investors through U.S.-based brokerage firms. Exchanges with “comparable” regulatory oversight would no longer need to register with the SEC, under the new proposal. But of course, having comparable regulations alone in no way ensures that foreign exchanges enforce their regulations with the same rigor as the SEC.
The U.S. markets remain the most highly and efficiently regulated in the world, according to Moscow. Clearly, that is still not good enough.
— Rachel Ehrenfeld, author of Funding Evil, is director of the American Center of Democracy, and a member of the board of the Committee for the Present Danger. Alyssa A. Lappen, a senior fellow at ACD, is a former editor of Institutional Investor, Working Woman , Corporate Finance and Forbes.
The very expectations of glittering shari’a finance (Islamic banking) profits hypnotize financial institutions, securities exchanges, and banks–and there are few regulatory or monitoring protections against abuses. So why did United Arab Emirates (UAE) government IP address 92.97.131.110 send some 30,000 to 40,0000 spam messages on December 8, 2007, soliciting Islamic finance clients among U.S. citizens and small businesses?
“Need assistance,” the spam asks, soliciting inquiries to , registered to Emirates Telecommunications Corporation at UAE’s federal domain authority.
Let’s hope U.S. consumers and U.S. presidential candidates–unlike those U.S. financiers falling like flies before UAE sheiks–will carefully scrutinize the entire Islamic banking scam.
The UAE email solicitation purports that Islamic finance provides four “attractions:”
* Good alternative source of funds
* Risk perceptions of Islamic financiers
* Off-balance sheet financing
* Preferred mode of financing for certain corporate (sic) and individuals
With wife-beating, stoning women, dismembering thieves, hanging homosexuals, supremacist ideology and an annual head tax (jizya) on non-Muslim subjects–shari’a also orders Muslims to fund jihad (financial jihad—al Jihad bi-al-Mal). As in Qur’an 61:10-11, “strive for the cause of Allah with your wealth and your lives.” and Qur’an 49:15. “Financial Jihad [is]…more important…than self-sacrificing,” says Saudi cleric and Muslim Brother Hamud bin Uqla al-Shuaibi.
Consider the four purported advantages.
First, the Saudi-favored shari’a finance “alternative,” as noted in FrontPageMagazine earlier, is a 20th century construct without basis in Islamic history–and often funds destruction. It’s an “invented tradition” empowering Islamic radicals, writes USC King Faisal Professor of Islamic Thought, Timur Kuran, in Islam and Mammon: “Neither classical nor medieval Islamic civilization featured banks in the modern sense, let alone ‘Islamic banks’.”
Conversely, Americans expect alternative “ethical” and “socially responsible” investing to build human rights in southern Sudan, common shareholder rights, and good corporate governance and transparency–terms not in the shari’a finance lexicon.
Then take “risk perceptions of Islamic financiers.”
Evidently bankers have forgotten to whom the advantage of this second bogus UAE-invoked “attraction” accrues: Citibank’s Islamic financiers in 1955 launched its Saudi American Bank subsidiary in Jeddah and in 1966 opened a Riyadh branch–without presenting due diligence on the risks of operating under shari’a law, which include sudden confiscation. So Citibank discovered in 1980, when the Saudis seized SAB by royal decree, denied Citi any future profits, and ordered the bank to train Saudis staffers.
Likewise, the “risk perceptions of Islamic financiers” apparently aided criminals at the Bank of Credit and Commerce International (BCCI), which was founded as an Islamic bank. BCCI perpetrated the largest fraud in banking history, costing depositors and investors at least $21 billion before U.S. prosecutors closed it in 1991. BCCI was also established “to help the world of Islam, and [as] the best way to fight the evil influence of the Zionists,” as Rachel Ehrenfeld noted in Evil Money (Harper Collins, 1992, pp. 160, 164-5, 169-70). Thus under UAE president Sheikh Khalifa Bin Zayed Bin Sultan Al-Nahayan’s late, terror-financier father, BCCI funded such “alternative” organizations, states and projects as Hezbollah, al Qaeda, Syria, Iran and Pakistan’s nuclear bomb manufacturing.
And Islamic banking’s third “advantage”–its off-balance sheet financing–most readily explains its fourth: the domain’s preference by “certain corporate (sic) and individuals.”
And that includes leashing the downside risks in off-the-books financing. Hundreds of billions of dollars in subprime mortgages caused the current global credit crisis, which is ravaging global equities and bond markets, and could slice $6 trillion from U.S. home values and take years to resolve.
In the 30 years since Bank of America technology and an 8.5% BOA mortgage-backed “pass-through” spawned a landmark market innovation–securitization–underwriters transformed trillions of dollars in claimed cash flows on illiquid assets into increasingly liquid, traceable securities. Collateralized debt obligations (CDOs) made mortgage-backed and other complex lending securities so liquid that in the 1980s, U.S. brokerage firms practically sold them on street corners.
During that 1980s securitization boom, the Muslim Brotherhood heavily used the new Western financial technology to develop MB founder Hassan al-Banna’s shari’a banking invention. Today, Islamic financial institutions also manufacture “special purpose entities” (SPEs)–the same kind that coincidentally helped destroy Enron. Naturally, Islamic financial engineers renamed the prickly SPEs “special-purpose vehicles (SPVs)”–legal devices to “restructure interest-bearing debt, collecting interest [as] rent or [a] price mark-up.”
So-called sukuk al-ijara (shari’a bond) issuers sell real estate or assets to SPVs, which capitalize their investment by selling share certificates. In turn, the SPVs then lease back the assets they purchased to the sukuk issuers, collecting principal plus interest, which they pass on to sukuk investors as “rent.” When the sukuk matures, the SPVs sell or return the property to the sukuk issuers.
In short, the supposed “alternative” Islamic finance instruments, which claim to avoid usury, use Western structured finance tools–“some of the most complex ever created.” You got it. Shari’a bankers transform liquid, traceable cash flows from interest-bearing debt into illiquid assets.
How is that more secure for the financial markets?
Actually, financial innovation has sometimes caused market dislocations. Often, the bigger the innovation, the greater the unforeseen consequences–and market declines. Take the role of “portfolio insurance” in the 1987 crash. Or the 1994 bust of mortgage-backed bonds, which wiped out $1 trillion in value–then roughly 10% of the U.S. bond market. That free-fall took down (by several notches) many huge pension funds, municipalities and institutional investors–and also beached a few hedge funds like dead whales.
So how does the complex purported shari’a finance alternative create more security for Western financial markets?
It doesn’t. Under “complexities,” the December UAE solicitation for Islamic finance clients admitted, “Shari’a regulations can override commercial decisions.”
The email also noted two other major shari’a finance problems:
* Documentation is not standardized
* Inter-creditor agreements can be complex (emphasis added)
Taking monumental risks does not even eliminate usury. All “Islamic finance today is interest based,” complains Rice University Islamic economics, finance and management chairman, Mahmoud el-Gamal, in the Financial Times. Disparaging Islamic banking as “shari’a arbitrage,” el-Gamal calls it “first and foremost about religious identity.” And the “forefathers” of so-called “political Islam” intended precisely that in their conception of this 20th century financial concoction.
In reality, “innovative” Islamic financial securities involve enormous risks, which may be an intended prong of the Muslim Brotherhood’s strategic financial jihad.
Sukuk issues entice investors with yields much higher than Western bonds. While central Western banks orchestrate historic, simultaneous rate reductions to contain losses feared to equal those of the 1986 to 1995 savings and loan crisis, a sukuk index with a mere 3.8 year duration sported 6.2% “coupon” on Nov. 30, 2007. Meanwhile, in mid January, yields were only 2.89% on intermediate Treasuries–and just 5.25% on the Lehman Brothers intermediate U.S. corporate bond index. Only long term U.S. corporate debt yielded more than 6.5%. No wonder sukuk issues have been fully subscribed.
But two key determinants of bond quality remain–the surety of payments for the scheduled life of the loan, and the certainty that, on maturity, investors will recover 100% of their principal.
Simply believing Islamic sukuk to be inherently safer than Western bonds doesn’t improve their quality of their higher interest rates–oops–“rent.” Islamic or not, buying a sukuk makes its purchaser a creditor. And for the same reasons “junk” is synonymous with high-yield bonds, larger returns carry greater risks.
Which says nothing of the dubious underlying “profit and loss sharing” Islamic finance philosophy. Investors should look doubly hard at whether to expect profit or loss when a sukuk matures–that is, whether recouping the loan’s entire “face value” is even in the cards. That might depend on the values of underlying properties or assets at maturity. But then, “Shari’a regulations can override commercial decisions,” and so on.
In 1983, my esteemed colleague, former Forbes senior editor Howard Rudnitsky, warned in a booming real estate tax-shelter market, “heavy leverage involves risks, and if the market turns bad, the top-heavy financing could wipe out the equity. The creditors would get the property back, the syndicator would keep his fees and the investor would get the shaft.” Not to mention the back taxes, interest and penalties if the Internal Revenue Service ruled the enterprise “uneconomic.”
The same principles apply here. With or without spam, better, safer and fairer for government and IRS regulators, banks, markets–and investors–to take all finance, unIslamic.
Alyssa A. Lappen, a senior fellow at the American Center for Democracy, is a former senior editor of Institutional Investor, Working Woman and Corporate Finance and a former associate editor of Forbes.
By Rachel Ehrenfeld and Alyssa A. Lappen Washington Times| Jan. 17, 2008
The antiquated Securities and Exchange Commission’s computer system prevents investigators from safeguarding U.S. market integrity. “It’s like working with one hand tied behind their backs,” Republican Sen. Chuck Grassley commented about the Dec. 17 release of the Government Accountability Office (GAO) report he’d initiated — “SEC: Opportunities Exist to Improve Oversight of Self-Regulatory Organizations.” Why can’t the government with the world’s most advanced computer technology and capabilities equip its agencies with state-of-the-art systems allowing them to better monitor markets and transactions, including illegal activities?
In response to the GAO criticism, SEC Chairman Christopher Cox acknowledged, “additional information-technology changes such as these may help the [SEC] enforcement staff to effectively analyze trends, manage current caseloads and focus areas of investigation.” But all federal officials — not just at the SEC — should worry about much more than insider trading.
Take terror financing. So far, no U.S. official at any level, including presidential candidates from both parties, has publicly addressed how radical Muslim groups and Islamic terror organizations raise major sums to facilitate the murder of Americans in Afghanistan, Iraq and elsewhere, among other things.
Two years ago, President Bush denounced “the murderous ideology of the Islamic radicals [which] is the great challenge of our century.” But U.S. dependency on Middle East oil made the Saudis and their Gulf neighbors rich beyond their wildest dreams. Saudi funding propagates global Islamist extremism that former CIA Director James Woolsey describes as “the soil in which al Qaeda and its sister terrorist organizations are flourishing.” The September 11 commission awarded the government an A- for its “vigorous efforts against terror financing,” both in 2003, and again in its October 2005 progress report.
In fact, government efforts thus far have apparently targeted the wrong funding sources. The vast Middle East sums feeding the global spread of radical Islam and jihad have not diminished. Yet, our government tells us, the Saudis and their neighbors are U.S. allies.
Such disinformation, combined with outdated monitoring technologies and systems, contributes to continuing government failure to secure U.S. financial institutions, economic stability and national security.
Government agencies have long warned of the federal failure to properly monitor and impede funds flowing to terrorist organizations. These include several GAO reports and a May 21 IRS report criticizing government ability to identify charities favored by radical Muslims to fund terrorism.
“The IRS provides only minimal assurance that tax-exempt organizations potentially involved in terrorist activities are being identified,” it says. Furthermore, the report recommends that the IRS and other agencies “develop and implement a long-term strategy to automate the process… to identify potential terrorist activities related to tax-exempt organizations.” Another major issue slipping under the radar concerns the growing influence of petrodollars on U.S. economic institutions, banks, markets and government agencies.
Due diligence currently available identifies the routine and obvious risks associated with Western market participants. However, growing Islamic banking and Shariah-compliant industries promote themselves as hot new financial markets in which to invest. The attraction for U.S. and Western banks and investors is the $1 trillion and rising annual Saudi and Gulf state oil revenues.
Then again, like many other “innovative” products, the “ethical” and “socially responsible” Middle East and Islamic banking and investment market present many new risks not currently addressed either by their proponents or by regulatory agencies, much less due diligence services now available.
These markets and products lack transparency and Western accounting. Frequently, their documentation and offering statements do not disclose information required by federal laws and banking regulations. Furthermore, this market is increasingly governed by radical Islamic clerics whose provenance is unknown to the Federal Reserve Board, U.S. and international equities and bond ratings agencies, index providers and other insufficiently educated market participants and facilitators.
Data-mining software is available in the market today. But it lacks the ability to also analyze social and political networks and identify terrorist links. An important new program will shortly be available to fill that gap. It will also aid collection, processing, investigation, discovery, data-sharing and reporting intelligence.
The government needs this technology to stop terror financing. And businesses need objective consultants with regional expertise, language skills and access to the latest software to fully meet their “know you customer” and disclosure regulations.
Businesses that fail to take these extra precautions are liable to suffer major losses, market dislocations and possible prosecution for material support of terrorism.
Unless the U.S. Congress and New York legislatures act immediately to stop them, foreign terror financiers and libel tourists now can essentially impose sharia (Islamic) law on American writers and publishers.
Intended or not, a narrow, technical New York Appeals Court decision on Thursday Dec. 20, 2007 produces that net effect. The ruling concerns jurisdiction in Dr. Rachel Ehrenfeld’s suit against Saudi billionaire Khalid bin Mahfouz, seeking a federal declaratory judgment against him to render unenforceable in the U.S. a U.K. High Court default “libel” decision. By implication, the New York Appeals Court ruling harms all publishers and writers in New York, the world’s publishing capital.
Ehrenfeld’s case stems from her 2003 book, Funding Evil: How Terrorism is Financed—and How to Stop It, where American Center for Democracy Director reports Mahfouz’ well-documented terror funding. (Full disclosure: Since September 2005, I’ve been an ACD Senior Fellow.) As always after such terror financing reports, Mahfouz sued Ehrenfeld for libel in Britain. His attorneys informed U.K. High Court Justice David Eady that former CIA director R. James Woolsey wrote her book’s foreword. “Say no more,” Eady replied. “I award you a judgment by default, and if you want, an injunction, too.”
Eady then ordered Ehrenfeld to apologize, retract, pay Mahfouz $225,913.37 in damages and destroy remaining copies of her book. Instead, she ignored the British default judgment and false libel claim—never tried on its merits—and asked the Southern District Court of New York to rule the U.K. judgment unenforceable here.
In the U.S., the Supreme Court’s seminal 1964 New York Times v. Sullivan decision defined libel or slander by a journalist as stating or writing falsehoods or misrepresentations that damage someone’s reputation—and in cases of public figures, doing so with malice.
Under sharia, by contrast, libel constitutes any oral or written remark offensive to a complainant, regardless of its accuracy or intent. Slander “means to mention anything concerning a person that he would dislike, whether about his body, religion, everyday life, self, disposition, property, son, father, wife, servant, turban, garment, gait, movements, smiling, dissoluteness, frowning, cheerfulness, or anything else connected with him,” according to Ahmad Ibn Lulu Ibn Al-Naqib (d. 1368). 1
Repeat: Sharia regards even the truth as slander if its subject dislikes the facts. Now applied through foreign courts, sharia law interpretations of libel have demonstrably undermined U.S. press viability already. Though Mahfouz never proved merits in any libel case, he has threatened or sued more than 35 journalists and publishers (including many in the U.S.) through Britain’s High Court, and exacted fines, apologies and retractions from all but Ehrenfeld. Last Thursday, New York’s Appeals Court substantially (if not intentionally) allowed the application of sharia rules here.
New York State recently held that it can collect sales taxes from “commercial” enterprises with as little physical presence as a single link on any New York-based website. While temporarily reversed on November 15, the state’s controversial opinion will be enforced after the 2007 Christmas season.
Yet, also by New York fiat, Constitutional First Amendment rights now take a back seat to the state’s conservative “long-arm” statutes—which protect distant commercial enterprises from state courts. A Saudi national suing an American journalist in Britain, Mahfouz hired numerous New York agents and couriers and used many New York electronic and telephone communication systems expressly to halt Ehrenfeld’s investigations and publications concerning terror finance. However, on Dec. 20 the New York Appeals Court established Mahfouz’ New York-based commercial transactions as less commercial (or significant) than a distant merchant’s sales link on a New York-based website.
In its unanimous June 8, 2007 request for a local ruling on jurisdiction, the U.S. Second Circuit Court of Appeals panel specifically extended as wide a berth as possible to the New York Court of Appeals to consider First Amendment rights within the context of Ehrenfeld’s case.
However, the New York Court ignored the federal instructions to consider Constitutional issues’or the effects this case will consequently have on Constitutional rights in the world’s publishing capital. “However pernicious the effect of this practice [libel tourism] may be, our duty here is to determine whether defendant’s New York contacts establish a proper basis for jurisdiction,” wrote Judge Carmen Beauchamp Ciparick, an appointee of former Governor Mario Cuomo.
Shockingly, New York’s Court of Appeals allowed Mahfouz’ commercial actions (and any similar commercial actions of any other foreign terror financier and libel tourist) to subjugate Constitutional First Amendment rights to archaic commercial statutes.
Now, the U.S. Congress and New York legislators must swiftly enact new “long-arm” statues, suitable to our electronic age, before further damage to the U.S. Constitution ensues.
