Mark Your Calendar to hear Arianna Huffington . . .

at CFAC’s annual First Amendment Assembly, to be held September 29 & 30 at UC Berkeley. If you can attend only one professional conference this year, this is it: CFAC’s gathering of the best and brightest in journalism, law and public policy, produced in partnership with the UC Berkeley Graduate School of Journalism.

COMMENTARY

Thanks to AG’s threats to indict press in leak cases, reporters need not rely on 1st Amendment to protect sources. They can take the Fifth.

By Peter Scheer

Our Attorney General, Alberto Gonzales, has stated publicly that he believes journalists may be prosecuted under federal espionage laws for publishing articles based on leaks of classified information. The comments, in an ABC News interview, were directed at the New York Times (for its disclosures about NSA’s warrantless eavesdropping) and the Washington Post (for stories about foreign countries’ assistance in the CIA’s use of “extraordinary rendition").

He didn’t intend it, but the AG’s threats may have given reporters at the Times and Post—and at the Los Angeles Times, the San Francisco Chronicle and other news organizations looking down the barrel of federal leak investigations—a powerful defense to the inevitable demands, backed by grand jury subpoenas, that they identify their confidential sources: They can “take the Fifth.”

For the past two years the journalism community has been fixated on the shortcomings of the First Amendment as a source of protection for reporters’ confidential sources. In the federal arena, where state Shield Laws are of no help, one federal appellate court after another has rejected assertions of a “reporter’s privilege,” grounded in the First Amendment, to refuse to testify about anonymous sources.

But if the First Amendment can no longer be counted on to keep reporters out of jail, invoking the Fifth Amendment privilege—refusing to disclose the name of a confidential source because doing so could be self-incriminating—may succeed in protecting both the source and the reporter.

Until Gonzales started musing publicly about news organizations’ criminal exposure for leaks of classified information, the risk of an indictment of reporters and their employers might have been seen as too remote to permit a reporter to refuse to testify about sources. The espionage statutes have never been used against journalists, and for good reason: such prosecutions would be tantamount to adoption of an Official Secrets Act, something that Congress, in modern times, has always been loathe to do.

But times have changed. The risk of prosecution is not remote anymore.

The Fifth Amendment has gotten a bad rep because of its long association with organized criminals and corrupt public officials–and because of the common perception that, by pleading the Fifth, one is implicitly admitting guilt. In fact, the Fifth amendment does not so much imply guilt as it does a refusal to be of assistance to the government in meeting its burden of proving guilt. Why offer to help a prosecutor who wants to put you in jail?

But even if the implication of guilt is unavoidable, one has to ask, guilty of what? In the case of subpoenas to James Risen and Eric Lichtblau, the Times’ reporters who wrote the NSA wiretapping stories, relying on the Fifth Amendment to refuse to testify would imply that they are “guilty” of:

–obtaining evidence of a domestic surveillance program

–that was authorized by the President

–yet conducted without the judicial oversight required by applicable federal law

–and then reporting this information in the pages of a national newspaper.

If that is an admission of guilt, then Risen and Lichtblau should wear it as a badge of honor. By invoking the Fifth Amendment, they would be admitting that they did their jobs.

Of course, the Fifth Amendment will be of no avail if the government, in order to preserve the prosecution of reporters’ confidential sources, is willing to forgo prosecuting the reporters. In other words, prosecutors have the option of granting formal immunity to reporters. Once immunized, reporters may not continue–on Fifth Amendment grounds–to refuse to testify about their sources since their risk of being prosecuted will have been removed.

Nonetheless, getting immunity in the current circumstances is a victory in itself. In the face of Gonzales’ bluster about indicting the press under the espionage laws, the Justice Department would not be thrilled about having to immunize the press. And obtaining immunity would leave reporters no worse off with respect to protecting confidential sources under the First Amendment or any other legal theory available. Those arguments would be unaffected by a grant of immunity.

In the coming months, as the New York Times, the Washington Post and the San Francisco Chronicle all face down federal, criminal leak investigations, they should be thankful for Gonzales’ saber-rattling. Let’s hope he makes more threats to prosecute the media.
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Disagree? Have something to add? Send us a comment. We’ll publish the best ones.–PES

COMMENTARY

Why the doom-and-gloom about the settlement in the Wen Ho Lee case? Under the circumstances, this deal is a victory for the press

By Peter Scheer

“Deeply troubling.” “Profoundly disturbing.” “A huge disappointment.” So intoned various media law mavens in lamenting the decision of the New York Times, Los Angeles Times, ABC News, Washington Post and Associated Press to join in a settlement of an invasion of privacy lawsuit filed by Wen Ho Lee, an atomic scientist once suspected of espionage.

Lee had sued the federal government for its leaking of damaging information about him to the press, which, in a flurry of articles in 1998, had rushed to the apparently premature judgment of Lee’s guilt. Lee did not sue the news organizations, but subpoenaed their reporters to force them to disclose the sources of the leaks. In the settlement announced last Friday, the government agreed to pay Lee $895,000; the media organizations each agreed to pay Lee an average of about $150,000 (bringing the total settlement cost to $1,645,000).

So why the doom-and-gloom from the First Amendment commentariate? Unless you subscribe to the unrealistic view that the press should never, ever pay a dime to escape litigation, this settlement can only be seen as a victory for the affected news organizations and their reporters.

Consider that each news organization had already paid about $1 million in legal fees; that the reporters (Robert Drogin of The LA Times, H. Josef Hebert of AP, Walter Pincus of The Washington Post, James Risen of The New York Times and Pierre Thomas of ABC) had already been held in contempt and fined $500/day; that the news organizations themselves could be hit with ruinous contempt fines; that continued litigation might easily cost each news organization another $500,000 in legal fees; and that their only real hope for judicial relief–an appeal to the U.S. Supreme Court, which had declined to review the very similar appeals of Time Magazine’s Matthew Cooper and the New York Times’ Judith Miller only a year ago–was fading fast. (Indeed, the media were prescient: The Supreme Court on Monday denied their appeals.)

Consider all of this, and suddenly the opportunity to end the losses and eliminate further risks in exchange for a payment of $150,000 looks like an offer the press couldn’t refuse. This is especially so when you take into account that the media were not exactly blameless in this matter. The New York Times, to its credit (and, you can be sure, to its lawyers’ consternation), had conducted an internal investigation and published an extensive mea culpa, acknowledging mistakes in its coverage of the Lee case. That Lee never sued the Times for libel is one of the unexplained oddities of this litigation.

Nor is there much risk that, by settling with Lee, the press will encourage other would-be plaintiffs to try to extract payments from media organizations by subpoenaing them as witnesses. $150,000, after all, is not much of an inducement to filing suits that cost considerably more than $150,000 to litigate. Moreover, the Lee case, as a federal suit in which news organizations were third-party witnesses, was highly unusual. In more typical cases alleging violations of state law, subpoenas to reporters as witnesses would have been blocked by Shield Laws in effect in nearly all states.

There is also the delicious irony that the U.S. Justice Department, which is currently investigating leaks to the New York Times and Washington Post, and has indicated that news organizations could be prosecuted criminally for stories based on leaked national security information, has agreed to pay Lee money–which Lee can only be due on the theory that the Justice Department authorized the leaks about him.

In other words (and notwithstanding the disclaimers always made in settlements), the government’s payment to Lee is tantamount to an admission of official leaking at the same time the government has declared war on leaks. Oops. The Justice Department’s hypocrisy is showing. That, in itself, is a victory for the press.

Finally, the payments to Lee, which were necessary to free the reporters from the threat of fines and possible jail, may give a boost to efforts in Congress to enact a federal Shield Law. New legislation introduced last month would, if enacted, provide a qualified privilege to reporters in situations like the Lee case.
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Peter Scheer, a lawyer and journalist, is executive director of CFAC.

COMMENTARY

Wanted by the FBI: Journalists’ phone records showing calls to and from confidential sources.

By Peter Scheer

Last week two reporters for ABC News reported that the FBI had secretly obtained their phone records—showing whom they had called and who had called them—in order to identify a confidential source as part of an apparent leak investigation.

Neither ABC nor the reporters, Brian Ross and Richard Esposito, had an opportunity to go to court and try to block the government’s access to the phone records—by the time they found out what the government was up to (which, ironically, they learned unofficially, through a leak from the FBI), the data were already in the agency’s hands.

How can the government do this, you ask?

The answer is to be found in the Patriot Act, which, as renewed earlier this year, expands the authority of the FBI to use “National Security Letters” to obtain from a phone company or ISP information about their customers.

On the say so of FBI higher-ups alone, the FBI can now demand “toll billing records” and “electronic communications transactional records” for any “person or entity.” National Security Letters are not subject to a warrant requirement or other judicial supervision. Requested phone records must be turned over as long as they are “relevant” to “an authorized investigation to protect,” among other things, “clandestine intelligence activities . . .” A related provision muzzles the phone company, barring disclosure “to any person” that the FBI “has sought or obtained” the information.

These provisions are custom-made for leak investigations of news stories on national security and intelligence matters. Think the New York Times’ stories revealing warrantless surveillance of phone calls by the NSA, or the Washington Post’s reporting on the CIA’s use of prisons in central European and Asian countries to hold and interrogate terrorist suspects.

Pulitzer prizes notwithstanding, the government has acknowledged launching leak investigations into the sources for both stories. A CIA employee, Mary O. McCarthy, has already been fired in connection with the Post articles. Was she identified as a confidential source through examination of the Post’s phone records? Have the New York Times’ phone records already been turned over to the FBI by the phone company, without the Times’ knowledge?

For years, lawyers representing news organizations have taken comfort from an internal Justice Department policy that requires prosecutors to negotiate with journalists over access to their records or sources. If nothing else, the government’s adherence to this policy has meant that news organizations traditionally have had advance notice of an attempt by the FBI or a grand jury to obtain their records. Advance notice has enabled news organizations to go to court to contest a government subpoena.

The Justice Department policy requiring negotiations still exists. But an inconspicuous exception to that policy has, in the case of leak investigations, become a huge loophole. Prosecutors need not negotiate with the press over access to phone records when to do so would pose “a substantial threat to the integrity of the investigation in connection with which the records are sought.” The Justice Department is apparently invoking this exception in leak cases where a journalist’s communications with a confidential source are ongoing.

The difference between having and not having advance notice of an FBI effort to obtain phone records is, in practice, the difference between being able to protect—or not—a confidential source. In 2004, for example, the New York Times successfully resisted a grand jury subpoena in an investigation of a leak to Times’ reporters (including Judith Miller, who seems to be a magnet for press subpoenas). The leak concerned plans for an imminent FBI raid of a charitable organization allegedly linked to terrorists.

The grand jury never received the phone records for the Times’ reporters. (The case is on appeal in the Second Circuit Court of Appeals). If this case arose today, and the FBI used its National Security Letter authority to pursue—from the phone company—the Times’ reporters’ calling records, they would have been turned over and the Times wouldn’t have learned of the disclosure for up to 90 days after the records were in the FBI’s hands. By that time the Times’ government source could already be fired—or indicted.

The government’s more aggressive stance in leak investigations poses real problems for reporters and news organizations that cover national security matters in a serous way. To protect confidential sources, reporters may have to forgo use of phones and email to communicate with them. Of course, face-to-face meetings also create risks of discovery, but meetings, particularly in public places, may be more ambiguous than the irrefutable evidentiary maps left by electronic communications.

One way or another, the press must learn fast how to protect confidential sources working in the Defense Department, intelligence agencies and the State Department. If those sources dry up, public debate on matters of war and peace will be hugely impoverished.
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Peter Scheer, a lawyer and journalist, is CFAC’s executive director.

Dan Gillmor Joins CFAC Board

Dan Gillmor, a pioneer of journalism on and about the Internet, is the newest member of CFAC’s board of directors. Gillmor is currently director of the Center for Citizen Media, a joint project of UC Berkeley’s Graduate School of Journalism and the Berkman Center for Internet & Society at Harvard Law School.

Gillmor was a technology columnist at the San Jose Mercury News from 1994 to 2004. He is the author of We the Media: Grassroots Journalism by the People, a 2004 book that is widely credited as the first comprehensive look at how the collision of technology and journalism is transforming the media landscape. Gillmor posts regularly to his own blog and to the blog of the Center for Citizen Media.

Regulators analyzing MediaNews’ acquisition of the San Jose Merc, CC Times and Monterey Herald will focus on role of Hearst, owner of SF Chronicle.

Will publishers disclose their secret antitrust filings?

By Peter Scheer

The MediaNews Group, which proposes to buy the San Jose Mercury News, Contra Costa Times, Monterey Herald, and 30 Bay Area weekly newspapers, is paying a 20% premium over the price that McClatchy paid Knight-Ridder for these same publications less than two months ago. Antitrust regulators in the U.S. Justice Department, who must decide whether to go to court to try to block the transaction, will want to know why.

One explanation is that MediaNews, which already owns or controls eight daily and three weekly newspapers in the Bay Area, thinks the deal will yield economies of scale, allowing it to operate its newly acquired properties more efficiently than Knight-Ridder was able to. Another explanation is that MediaNews’ dominance of a restructured market will enable it to raise prices.

From the standpoint of antitrust, the first reason is completely benign. If a merger will allow multiple companies to lower prices to consumers by shedding duplicative costs, antitrust regulators are happy—even if those “costs” are reporters covering overlapping beats. Regulators are agnostics on questions of journalistic quality, or the human toll of lost jobs. The focus of antitrust analysis is on benefits to consumers (with “benefit” defined almost exclusively in economic terms), not benefits to affected companies, their shareholders or employees.

Antitrust regulators will be very concerned, however, if they suspect the second explanation: that MediaNews paid a premium because its competitive position in the Bay Area newspaper market—where its circulation will rise from approximately 290,000 pre-deal to over 800,000 post-deal—will permit it to raise rates. Raising rates, when not justified by higher costs, is the essence of harm to consumers under the antitrust laws.

MediaNews’ share of the Bay Area daily newspaper market will be somewhere north of 65% if the McClatchy sale goes through as planned. MediaNews will own or control every daily in the region except the San Francisco Chronicle (owned by Hearst Corp.), the San Francisco Examiner (owned by Clarity Media Group), and the Santa Rose Press Democrat (owned by the New York Times). While that is a high degree of market concentration—and almost certainly would have drawn a challenge from the Justice Department twenty years ago—it is likely to be seen today as inconclusive.

Why? Because these newspapers not only compete with each other, but also with Craig’s List, eBay, Yahoo, Google and numerous other Internet-based businesses (not to mention television and radio) offering help-wanted ads, real estate listings and sales of new and used cars, as well as retail display advertising. MediaNews’ share of a “market” redefined to include these competitors is small–too small for MediaNews to be able to dictate prices.

But another aspect of the McClatchy-MediaNews deal is not so easily dismissed. I’m referring to the role of Hearst, owner of the Chronicle, which will be MediaNews’ primary competitor in the Bay Area.

As part of the deal, Hearst will also become a MediaNews investor and partner. Hearst will pay to McClatchey $263.2 million in cash for the St. Paul (Minn.) Pioneer Press and Monterey County Herald, while MediaNews will pay $736.8 million for the Mercury News, Contra Costa Times, and various weeklies. After the purchases are completed, Hearst will give the Pioneer Press and the Herald to MediaNews and, in exchange, Hearst will receive a stake (size unspecified) in MediaNews’ properties outside the Bay Area.

Regulators are suspicious whenever they see ostensible competitors engaging in transactions that could cause them to be less competitive with each other—or, worse, that could facilitate an agreement to fix prices or divide up the market. Hearst and MediaNews will point out to the Justice Department that Hearst’s investment won’t reduce its incentive to compete in the Bay Area because its investment will be limited to MediaNews’ properties in completely different markets outside the Bay Area.

But that may not be enough to satisfy regulators. The question they will ask is: Why Hearst of all possible investors? If Hearst’s only function is, as described, to be a source of investment capital for a deal between McClatchey and MediaNews, why not use other investors whose participation would raise no competitive issues at all? Why use the one company that has the resources and incentive to object to the deal, and whose participation creates at least the risk of a lessening of competition?

The answer is not obvious. It may be that Hearst is able to generate tax savings in the deal (hence, the complex purchase-and-swap of the St. Paul and Monterey papers), and those savings make it a cheaper source of capital. Or, it may be that Hearst sees strategic value in partnering with MediaNews in ownership of newspapers outside the Bay Area. Of course, these explanations don’t preclude a scenario that is anticompetitive.

Whatever the answer, the public is entitled to hear it and make its own judgment. Although filings with the Justice Department or Federal Trade Commission in such “pre-merger reviews” are traditionally confidential, let’s hope that McClatchy, MediaNews and Hearst, which are all in the business of making information public, will elect to tell their readers what they are telling government regulators.

Peter Scheer, a lawyer and journalist, is Executive Director of CFAC.
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