Global Relief v. New York Times Co ( 2004 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-1767
GLOBAL RELIEF FOUNDATION, INCORPORATED,
Plaintiff-Appellant,
v.
NEW YORK TIMES COMPANY, ASSOCIATED
PRESS, AMERICAN BROADCASTING COMPANIES,
INCORPORATED, et al.,
Defendants-Appellees.
____________
Appeal from the United States District Court for
the Northern District of Illinois, Eastern Division.
No. 01 C 8821—David H. Coar, Judge.
____________
ARGUED SEPTEMBER 22, 2003—DECIDED DECEMBER 1, 2004
____________
Before ROVNER, EVANS and WILLIAMS, Circuit Judges.
ROVNER, Circuit Judge. In the months following the
September 11, 2001 terrorist attacks, journalists and news
agencies published reports concerning the government’s
efforts to cut off all sources of funding for terrorist activi-
ties. The defendants here reported that Global Relief
Foundation was one of the targets of government investiga-
tions into sources of funding for terrorism. Global Relief
Foundation sued the defendants for defamation, complain-
ing that contributions to the organization evaporated fol-
2 No. 03-1767
lowing these reports. Truth is an absolute bar to recovery
for defamation and the district court granted summary
judgment in favor of the defendants after finding that each
of the reports was substantially true. We affirm.
I.
The plaintiff, Global Relief Foundation, Inc. (“GRF”), was
incorporated in Illinois as a charitable organization. The
defendants are all reporters or news organizations. They in-
clude the New York Times Company (the “Times”), American
Broadcasting Companies, Inc. (“ABC”), Globe Newspaper
Company a/k/a The Boston Globe (the “Globe”), Associated
Press, Inc. (the “AP”), Daily News, L.P. (“DNLP”), Hearst
Communications, Inc. (“Hearst”), Antonio Mora (“Mora”),
Martha Mendoza (“Mendoza”), Judith Miller (“Miller”), Kurt
Eichenwald (“Eichenwald”), William Louis (Zev) Chafets
(“Chafets”), Scott Winokur (“Winokur”) and Christian
Berthelsen (“Berthelsen”).
In the days following September 11, 2001, the U.S. gov-
ernment sought to identify the persons and organizations
responsible for the attacks. President George W. Bush
announced that the United States would make no distinction
between those “who committed these acts and those who
harbor them.” By September 15, President Bush publicly
identified Osama bin Laden and the al Qaeda organization
as the main suspects in the attacks. A few days later, the
President stated that the United States would also focus on
non-governmental organizations which served as fronts or
as funding mechanisms for terrorist organizations. On
September 23, 2001, President Bush implemented Executive
Order 13224, declaring a national emergency to deal with
the threat of terrorist attacks and specifically authorizing
the government to freeze the assets of people and organiza-
tions that supported or were associated with terrorism.
Each of the defendants subsequently reported on the gov-
No. 03-1767 3
ernment’s investigations into organizations linked to ter-
rorism. Because these reports form the bases of the libel
claims, we will detail each report as it relates to GRF.
A.
The first report came the day after the Executive Order
was issued. ABC broadcast a report by Antonio Mora on its
“Good Morning America” program, detailing the govern-
ment’s actions in freezing the U.S.-held assets of “charities
and non-governmental organizations in the U.S. and abroad
that funnel money to bin Laden and other terrorists.” Mora
noted that the president had issued an executive order to
follow through on his promise to cut off funds to terrorists.
He stated, in relevant part:
Now, a few of the charities accused of getting funds to
bin Laden have operations here in the U.S. They’re listed
there. The Holy Land Foundation out of Richardson,
Texas; The Islamic Relief Agency out of Colombia,
Missouri; Global Relief Foundation out of Bridgeview,
Illinois, and the Al Kifah Refugee Center in Brooklyn.
Now, most deny the charges. Now, there are dozens of
others abroad that are listed as terrorist fronts, too. So,
Charlie, it is the first punch in this financial war
against terrorism.
Good Morning America, September 24, 2001, Transcript
from Video Monitoring Services of America, L.P. Later in
the day, ABC published a retraction on its website, reading:
In an early report on President Bush’s Executive Order
to freeze assets around the world, Good Morning
America said that certain U.S.-based charities (the Holy
Land Foundation, the Islamic Relief Agency, the Global
Relief Foundation, and the Al Kifah Refugee Center)
had been accused of “getting funds to Bin Laden.” This
is not the case. We regret the error.
4 No. 03-1767
B.
The second report came in an article by Zev Chafets in the
September 28, 2001 edition of the New York Daily News.
The focus of the article was the Council on American-
Islamic Relations (“CAIR”), a group the author states was
“in bed with at least two philanthropic groups suspected of
being fronts for one of the Middle East’s most lethally anti-
American, anti-Jewish jihadists: Palestinian Hamas.”
Chafets commented that although CAIR condemned the
September 11 attacks, the group did not acknowledge that
the attacks were connected to Osama bin Laden and that
they were carried out in the name of an Islamic holy war:
On the other hand, the CAIR is very specific about how
the public should respond to the attacks on America:
Send money. It recommends contributing to three org-
anizations—the Red Cross, the Holy Land Foundation
and the Global Relief Foundation. . . . The Global Relief
Foundation, located in Bridge View [sic], Ill., has been
accused by Israel and American security experts of
funneling money and support to Hamas. Like the Holy
Land Foundation, it is currently under intense federal
scrutiny.
CAIR is untroubled by these investigations. In fact, it
regards these two organizations as victims of persecu-
tion. “There’s been a campaign to shut them down for
years,” Hooper1 says. “You tell me if they are legal
American organizations.”
They are. For now.
Bush is right to insist that not every Islamic and Arab
group supports holy warriors such as Hamas. But, as
his staff ought to know by now, some have, and still do.
1
“Hooper” is Ibrahim Hooper, a spokesman for CAIR, who denied
any connection between CAIR and Hamas earlier in the article.
No. 03-1767 5
“Beware the Wolves Among Us,” New York Daily News,
September 28, 2001, p. 30, Zev Chafets.
C.
A few days later, the New York Times published the third
report, focused on the “financial assault” against Osama bin
Laden. During the prior week, the Bush administration had
frozen the assets of twenty-seven individuals and organiza-
tions linked to bin Laden. The article reported that adminis-
tration officials were preparing to freeze the assets of
approximately two dozen more charities and other organ-
izations “that are suspected of providing money and support
to his terrorist operations.” The article discussed individu-
als and organizations under investigation for ties to bin
Laden:
The new list of suspect organizations, now under review
by a group of officials led by Treasury Department
representatives, includes charities in Saudi Arabia and
Chicago, an Arab bank and at least three “hawalas,” the
informal money-lending networks common in the Arab
world. The list is expected to be announced within two
weeks.
New York Times, “A Nation Challenged: The Investigation;
U.S. Set to Widen Financial Assault,” October 1, 2001,
Judith Miller and Kurt Eichenwald (hereafter “Nation
Challenged”). The article described the complex web of fi-
nancing terrorists use for their activities, including ties to
relief organizations that provide legitimate humanitarian
services at the same time they support terrorism. After
discussing the Benevolence International Foundation as a
group being investigated for conducting both legitimate
charitable work and terrorist support, the authors turned
to GRF:
Administration officials are also recommending that an
American charity be included on the new list—the
6 No. 03-1767
Global Relief Foundation, which provides emergency
relief, medical aid and engages in other humanitarian
efforts around the world.
Global Relief, based in Bridgeview, Ill., long a hub of
militant Islamic activity, is also making an appeal on
its Web site for victims of the catastrophes at the World
Trade Center and the Pentagon, though it does not
refer to them as terrorist attacks.
Global Relief was originally included two years ago on
a list circulated by the Clinton administration of 30
organizations with suspected ties to terrorism. But in
an interview last year Stanley Cohen, a lawyer for
Global Relief, called the investigations of the foundation
“another of the government’s pathetic attempts to sully
committed Islamic organizations.”
Id. These final three paragraphs of the lengthy article
contain the only mention of GRF.
D.
Martha Mendoza, an AP national reporter, authored the
fourth report on GRF’s list, an October 5, 2001 piece titled,
“Islamic Aid Groups Scrutinized.” As in the Nation
Challenged article, Mendoza recounted the president’s move
to freeze the assets of twenty-seven people and organiza-
tions the prior week, and discussed future targets of the
government’s terrorist financing investigations. She de-
scribed the government’s investigation process of reviewing
open source information and gathering data from the CIA,
the FBI, foreign governments and the State Department to
determine whether credible evidence existed to place a
particular organization on the list:
Among U.S.-based relief organizations receiving close
federal scrutiny are Benevolence International Founda-
tion based in Worth, Ill.; Global Relief Foundation in
No. 03-1767 7
Bridgeview, Ill.; and the Holy Land Foundation for Relief
and Development in Richardson, Texas, according to
two government sources involved in the investigation,
who spoke on condition they not be identified. Those
organizations may or may not be on the government’s
next list, the sources said.
Washington Post, “Islamic Aid Groups Scrutinized,” October
5, 2001, Martha Mendoza, AP National Writer. After
detailing denials of involvement with terrorism by both Holy
Land Foundation and Benevolence International, Mendoza
turned to GRF:
Global Relief Foundation, which received about $4.9
million in contributions in 1999, is also working in the
Afghanistan area, said spokesman Ashraf Nubani, an
attorney in Springfield, Va.
Nubani said his organization is being unfairly singled
out because it is run by Muslims. But he said his group
helps anyone in need.
“GRF would have no problem in providing humanitar-
ian assistance to a suicide bomber’s family,” he said.
“They could become destitute after that act and may
well need food or medicine. But that’s a footnote to
what we do, a worst case scenario.”
According to its promotional materials, Global Relief
Foundation is a “humanitarian organization working to
provide care, support and relief to people in need
throughout the world” through medical aid, family as-
sistance and scholarships.
Id.
Mendoza described the Islamic view of charitable giving
and then detailed the problem of money earmarked for the
needy finding its way to terrorist organizations. She cited
a recommendation by the president of the National Committee
for Responsive Philanthropy that potential donors should
8 No. 03-1767
conduct due diligence on organizations before giving, check-
ing the local Better Business Bureau or online services such
as guidestar.org that reviews charities. Mendoza com-
mented, “No reports of terrorist involvement appear on
guidestar’s reviews of Benevolence International, Global
Relief or the Holy Land Foundation.” There were no other
references to GRF in the article.
E.
The fifth report was published in the Boston Globe on
October 11, 2001. Staff reporter Mac Daniel explained that
charity is an act of worship for Muslims. He used GRF as
an example of an organization that encourages charitable
giving through its website:
Through these requests and the millions of dollars it
has generated, however, Global Relief Foundation, based
in Illinois, may also be a clandestine agent of terror,
according to federal investigators.
The GRF, which claims to be one of the world’s largest
Muslim humanitarian organizations, has been under
federal scrutiny for some time. Two years ago, after the
deadly bombings of two US embassies in East Africa, the
group’s name appeared on a federal list of 30 US
charities and relief agencies with alleged ties to terror-
ism.
The Bush administration last month froze the assets of
27 organizations allegedly tied to Osama bin Laden and
various terrorist groups. Global Relief Foundation this
week is expected to be added to an updated Treasury
list of US charities and relief agencies with alleged ties
to terrorism, government officials said. The expected
action follows investigators’ matching of the group to a
database of 14 million questionable transactions in the
United States and overseas.
No. 03-1767 9
Adding to the group’s mystery was the fleeing of its co-
founder and former director, Hazem Ragab, last year
after FBI agents tried to question him about his ties to
a Texas mosque that helped raise funds for GRF, ac-
cording to the Chicago Tribune.
Boston Globe, “Charity Probe: Muslim Relief Agency Eyed
in Terror Link,” October 11, 2001, Mac Daniel. Daniel then
explained that although GRF claimed to fund humanitarian
efforts, it could not account for funds sent overseas, totaling
millions of dollars, and was vague in IRS filings regarding
how the money was spent. The article included the views of
GRF’s lawyer, Ashraf Nubani:
For Nubani, GRF is the innocent target of a nation en-
raged. He denied that the group’s funds go to anything
but humanitarian aid and said the organization has
only been in “casual” contact with federal investigators.
Nubani blamed the negative attention on GRF on
“Zionist journalists” and others with anti-Muslim
agendas.
But in interviews over the past week, Nubani refused to
name relief agencies that could vouch for GRF’s work
overseas. He did not allow access to GRF’s full financial
records despite numerous requests.
Id. Daniel concluded the report by pointing out that a
number of legitimate international relief agencies were
unfamiliar with GRF.
F.
The sixth and final report was published by Hearst
Communications on November 7, 2001. Scott Winokur and
Christian Berthelsen reported on Bay Area donations to
Chicago-area Muslim charities that were being investigated
for “possible terrorist money-laundering activities.” San
Francisco Chronicle, “2 Muslim Charities Probed for Terror
Link; Bay Donors Chip in to Chicago Groups,” November 7,
2001, Scott Winokur & Christian Berthelsen. According to
10 No. 03-1767
the article, contributors claimed they thought the money
was going to charitable uses and were surprised to learn
some of their donations may have gone to support terror-
ism:
Global Relief and the Benevolence International Foun-
dation of Palos Hills, Ill., are two of the organizations
the U.S. Treasury department is scrutinizing. As of
Friday, the department had frozen the assets of 88
other individuals and organizations and is expected to
add to the list again today, The Chronicle has learned.
Id. The authors described a man who gave $5200 to GRF
after being presented with a list of charities at his mosque.
He believed the money was used for the poor and said there
had been no mention of the Taliban, bin Laden or al Qaeda.
In a section titled, “Charities Say It Isn’t True,” the authors
discuss denials and evidence:
Benevolence International and Global Relief have de-
nied roles in terrorist financing and condemned the
Sept. 11 attacks on the World Trade Center and the
Pentagon.
According to a report in the Los Angeles Times on
Sunday, however, the Treasury Department recently
sent a confidential memorandum to state charity offi-
cials asking for information about eight Muslim groups
in the United States, including Benevolence International
and Global Relief.
A Treasury spokeswoman, Tasia Scolinas, declined to
comment on the memo or on charitable groups that may
be named in future seizures.
However, a spokesman for the Texas attorney general
confirmed yesterday that his office did receive such a
communication.
Rita Katz, a security consultant in Washington, D.C.,
who specializes in charitable organizations suspected of
No. 03-1767 11
serving as terrorist fronts, said donors to Benevolence
International and Global Relief get only part of the
truth about the ways their contributions are used.
“They won’t tell you the money is going to Hamas,” Katz
said, referring to the principal Palestinian terrorist org-
anization. “They will tell you the money is going to
humanitarian activities, which isn’t wrong; they do give
money to humanitarian organizations as well. But their
fund-raising literature says nothing about al Qaeda or
jihad.”
Id.
After describing an individual who stopped giving to
Benevolence International, the article reported that GRF
raised nearly $5 million in 1999:
It describes its mission as the provision of economic,
occupational and agricultural aid, with an emphasis on
Bosnia and Chechnya.
A spokesman for Global Relief, Asim Ghafoor, said the
foundation has contacted both the Office of Foreign
Asset Control and the National Security Counsel for
confirmation of reports that its assets eventually could
be seized.
He said it hasn’t gotten any response from the govern-
ment.
“They (reporters) told us there was reason to believe we
were being investigated,” but the foundation hadn’t
received “even a knock on the door” from federal au-
thorities, he said.
Ashraf Nubani, a Springfield, Va., attorney for Global
Relief, attributed reports naming the organization to
“anti-Muslim hysteria” and the “Israel-can-do-no-wrong
lobby.”
Id. There were no further mentions of GRF in the article.
12 No. 03-1767
II.
On November 15, 2001, GRF filed its diversity complaint
in the district court, alleging defamation in each of the
reports detailed above. Approximately one month later, on
December 14, 2001, the Office of Foreign Assets Control
(“OFAC”) blocked the assets of GRF pending investigation.
See http://www.treas.gov/offices/enforcement/ofac/actions/
20011214a.shtml. GRF was notified of the blocking order in
a letter from OFAC on that same day stating:
The United States Government has reason to believe
that Global Relief Foundation Inc. (“GRFI”) may be
engaged in activities that violate the International
Emergency Economic Powers Act, 50 U.S.C. Sections
1701-06 (“IEEPA”). You are hereby notified that pur-
suant to the authorities granted by IEEPA, the U.S.
Department of the Treasury is blocking all funds and
accounts and business records in which GRFI has any
interest, pending further investigation and resolution
of this matter.
R. 114, Ex. A, at 20 n.12. On October 18, 2002, the Treasury
Department designated GRF a “Specially Designated Global
Terrorist.” R. 114, Ex. D. “The term specially designated
global terrorist or SGDT means any foreign person or per-
son listed in the Annex or designated pursuant to Executive
Order 13224 of September 23, 2001.” 31 C.F.R. Part 594.310
(emphasis in original). As we discussed above, that Execu-
tive Order declared a national emergency to deal with the
threat of terrorist attacks and authorized the government
to freeze the assets of people and organizations that
supported or were associated with terrorism. The list of
persons designated pursuant to Executive Order 13224 has
grown considerably since it was instituted. GRF now finds
itself on the list in the company of Osama bin Laden, al
Qaeda and Hamas along with hundreds of other individuals
and organizations. GRF has challenged its designation in a
No. 03-1767 13
separate lawsuit. See Global Relief Foundation, Inc. v.
O’Neill, 315 F.3d 748 (7th Cir. 2002), cert. denied, 124 S. Ct.
531 (2003).
GRF sued all of the reporters and news agencies involved
in publishing the six reports we have detailed, contending
that each report was false and defamatory. The defendants
moved for summary judgment, contending that their state-
ments regarding the investigation of GRF for terrorist ties
are true. The district court noted that GRF offered nothing
other than blanket denials of links to terrorism to refute the
truth of the news reports. Under Illinois law, the court
found, the defendants could prevail on summary judgment
by demonstrating that the reports were substantially true,
that is, that the gist or sting of the allegedly defamatory
material was true. The court then analyzed each article to
determine its “gist” or “sting.” The court concluded that the
gist of each article was that the government was investigat-
ing GRF for links to terrorism and was considering freezing
the organization’s assets. None of the reports stated that
GRF was a terrorist organization or even was linked to a
terrorist organization, only that the government was
investigating GRF to determine if such links existed. The
defendants produced affidavits from government sources
confirming that the government was in fact investigating
GRF for links to terrorist groups and was in fact contem-
plating freezing the organization’s assets at the time the
reports were made. The court thus found that the reports
were substantially true and entered summary judgment in
favor of the defendants. GRF appeals.
On appeal, GRF argues that the court erred in finding the
reports were substantially true. GRF maintains that the
defendants should be required to demonstrate not only that
they accurately reported the government’s suspicions but
that GRF was actually guilty of the conduct for which the
government was investigating the group. GRF states that
it has never provided money or assistance to terrorists and
14 No. 03-1767
thus the reports were false and defamatory. GRF urges this
court to find that the defenses of substantial truth, innocent
construction and neutral reportage were not applicable
here. GRF also complains that the district court should
have consolidated this case with GRF’s parallel action
against the government to better enable GRF to complete
discovery on the issue of the truth of the government’s
accusations. GRF contends the reports could not be inno-
cently construed, and that GRF adequately pled defamation
per quod when it alleged that the defendants accused the
organization of giving aid to terrorists following September
11, 2001 and that GRF lost most of its donations following
publication of these articles and reports.
Our review is de novo. Jackson v. Illinois Medi-Car, Inc.,
300 F.3d 760, 764 (7th Cir. 2002); Smith v. Severn, 129 F.3d
419, 425 (7th Cir. 1997). Summary judgment is appropriate
when there is no genuine issue as to any material fact and
the moving party is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(c). We view the record in the light most
favorable to the non-moving party and draw all reasonable
inferences in that party’s favor. Smith, 129 F.3d at 425. The
non-moving party must make a showing sufficient to
establish any essential element of its case for which the
non-movant will bear the burden on persuasion at trial.
Smith, 129 F.3d at 425. This means that GRF must show
that there is more than mere metaphysical doubt as to the
material facts. Id. The applicable substantive law will
dictate which facts are material. McGinn v. Burlington
Northern R.R. Co., 102 F.3d 295, 298 (7th Cir. 1996). GRF
has brought a state law defamation suit and we will there-
fore apply the substantive law of the state in which this
diversity case was filed, in this case, Illinois. Allstate Ins.
Co. v. Menards, Inc., 285 F.3d 630, 634 (7th Cir. 2002) (a
district court sitting in diversity must apply the law of the
state in which it sits). Illinois law therefore determines
which facts are material.
No. 03-1767 15
A.
To prove a claim of defamation, a plaintiff must show that
a defendant made a false statement concerning the plain-
tiff, that there was an unprivileged publication of the
defamatory statement to a third party by the defendant,
and that the plaintiff was damaged. Dubinsky v. United
Airlines Master Executive Council, 708 N.E.2d 441, 446-47
(Ill. App. 1 Dist. 1999); Cianci v. Pettibone Corp., 698 N.E.2d
674, 678 (Ill. App. 1 Dist. 1998). GRF has raised a genuine
issue of material fact related to damages by showing that
donations to the organization diminished after the publica-
tion of these statements. A statement is considered defam-
atory if it tends to cause such harm to the reputation of
another that it lowers that person in the eyes of the com-
munity or deters third persons from associating with that
person. Bryson v. News America Publications, Inc., 672
N.E.2d 1207, 1214 (Ill. 1996); Dubinsky, 708 N.E.2d at 446;
Restatement (Second) of Torts, § 559 (1977). Again, there is
no real argument about whether the statements at issue
tended to harm the reputation of GRF in a way that deterred
third parties from dealing with the group. The statements
were issued in the immediate aftermath of the September
11, 2001 terrorist attacks, and revealed (in even their most
innocuous reading) that the government was investigating
GRF for possibly providing money to terrorists and was
considering freezing the group’s assets. On summary judg-
ment, we must assume that allegations of a government
investigation into funding of terrorism tended to harm the
reputation of GRF in a way that deterred third parties from
dealing with the group. The articles themselves, which quote
persons who had donated to GRF or other charities in the
past, are replete with evidence that donors had serious
misgivings about the group on hearing of the government
probe. GRF has produced sufficient evidence of publication;
the statements appeared in prominent newspapers and
on national television. The issues on summary judgment,
16 No. 03-1767
then, are whether the statements were false, whether the
defendants had some privilege to publish them, and whether
the defendants had any other defense that would entitle
them to judgment as a matter of law.
The Supreme Court has held that when a private-figure
plaintiff seeks damages against a media defendant for speech
on matters of public concern, the plaintiff must bear the
burden of showing that the speech at issue is false before
recovering damages. Philadelphia Newspapers, Inc. v. Hepps,
475 U.S. 767, 776-77 (1986). See also Voyles v. Sandia
Mortgage Corp., 751 N.E.2d 1126, 1133 (Ill. 2001) (falsity is
an element of the plaintiff’s defamation claim and plaintiff
thus bears the burden of proof on falsity). Some of the
Illinois cases frame truth as an affirmative defense that
must be pled and proved by the defendant. See, e.g., Cianci,
698 N.E.2d at 678 (truth is a defense to a defamation ac-
tion); American Int’l Hosp. v. Chicago Tribune Co., 483
N.E.2d 965, 968 (Ill. App. 1 Dist. 1985) (same). We can
reconcile this seeming conflict with the more frequently de-
scribed defense of “substantial truth” discussed in the Illinois
cases. See Cianci, 698 N.E.2d at 678-79; Chicago Tribune,
483 N.E.2d at 968; Tunney v. American Broadcasting Co.,
441 N.E.2d 86, 89 (Ill. App. 1 Dist. 1982); Sivulich v. Howard
Publications, Inc., 466 N.E.2d 1218, 1220 (Ill. App. 1 Dist.
1984). A plaintiff may be able to demonstrate, for example,
that a statement is technically false in some way, meeting
its burden of establishing that element of its case. In
Illinois, a defendant may then defeat the claim by showing
that the statement, although not technically true in every
respect, was substantially true. Tunney, 441 N.E.2d at 89(to establish truth as a defense to a defamation action, it is
not necessary to establish the literal truth of inoffensive
details). See Haynes v. Alfred A. Knopf, Inc., 8 F.3d 1222,
1228 (7th Cir. 1993) (the rule making substantial truth a
complete defense and the constitutional limits on defama-
tion suits coincide). To establish the defense of substantial
No. 03-1767 17
truth, the defendant need only show the truth of the “gist”
or “sting” of the defamatory material. Cianci, 698 N.E.2d at
678-79; Chicago Tribune, 483 N.E.2d at 968; Tunney, 441
N.E.2d at 89; Sivulich, 466 N.E.2d at 1220. See also Haynes,
8 F.3d at 1227 (if the gist of a defamatory statement is sub-
stantially true, error in detail is not actionable). Bearing in
mind that the plaintiff, in this case GRF, bears the burden
of proof on the falsity of the statement, we turn to GRF’s
evidence in support of this element of the claims.
GRF seems to concede (at least for the purposes of sum-
mary judgment) that the government was in fact investigat-
ing the organization for financial ties to terrorism at the
time the statements were published. GRF maintains,
however, that the gravamen of the reports was not that the
government was conducting an investigation but that GRF
was actually involved in funding terrorist operations. GRF
denies that it has ever funded terrorist operations and thus
maintains that the reports were false. GRF characterizes
the fact of the investigation as an “inoffensive detail”
qualifying the true defamatory sting of the reports, that
GRF was a front for terrorists, including al Qaeda.
In support of its claim that it does not and has never
funded terrorism, GRF submitted two affidavits, one by
Mohamad Chehade, the executive director of GRF, and the
other by Roger Simmons, lead counsel for GRF in this case
and in GRF’s case against the government. Both of the
affidavits were submitted first in GRF’s case against the
government. According to Chehade, GRF spends in excess
of 80% of its income on charitable work and approximately
17% on administrative costs. Chehade states the group has
supported clinics, trade schools and hospitals in twenty-two
countries. He avers that GRF has delivered aid to those in
need due to natural disasters such as earthquakes and
drought, as well as to war-distressed refugees in Chechnya,
Afghanistan, Bosnia and Kosovo. Chehade alleges that GRF
18 No. 03-1767
delivered food, medical supplies, tents and blankets to those
in need throughout the world. He also states that in the en-
tire history of GRF’s existence, the group has never engaged
in violence or supported violence, terrorism or military
operations, and has never supplied weapons or military
items to anyone. He also denied that GRF ever provided
humanitarian aid to groups or organizations known to be
engaged in violence. Finally, he denied that GRF has ever
offered to provide humanitarian assistance to families of
suicide bombers in advance of suicide attacks and stated it
has never been GRF’s policy to support suicide bombing
directly or indirectly. Chehade’s affidavit does not address
the government’s investigation into GRF except to acknowl-
edge the December 14, 2001 blocking order and the gov-
ernment searches of GRF’s offices and Chehade’s personal
residence that same day.
Simmons’ affidavit focused not on GRF’s evidence of the
falsity of the statements but on the government’s lack of
proof of the truth of the allegations. Simmons stated that he
had been prevented from taking discovery into the gov-
ernment’s alleged investigation of GRF in the government’s
separate investigation. He complained that many of the
documents the government did produce were redacted and
many documents were withheld entirely. He also maintained
he was prevented from taking the depositions of govern-
ment agents who allegedly had personal knowledge of the
government’s investigation into GRF. Simmons stated that
with discovery, he would be able to establish that the gov-
ernment had no evidence that GRF funneled money to bin
Laden, al Qaeda or Hamas, and that the government had no
evidence that ties GRF to any terrorists. Notably, he did not
aver that the government did not investigate GRF for ties
to terrorism or that GRF had no ties to terrorism, only that,
with adequate discovery, he expected to find that the
government had no evidence that GRF is tied to terrorism.
Simmons’ affidavit does little to demonstrate the falsity of the
No. 03-1767 19
reports. For the purposes of summary judgment, Chehade’s
affidavit demonstrates a genuine issue on whether GRF has
ever funded terrorist activity. That genuine issue, however,
may not be material or relevant if the true gist or sting of
the publications was not that GRF funded terrorism but
that the government was investigating GRF for ties to
terrorism and was considering blocking the group’s assets.
The defendants characterize the gist or sting of the articles
from this latter perspective. According to the defendants,
the gist of each report was that the government was in-
vestigating GRF for financial links to terrorism and was
contemplating freezing the group’s assets. The defendants
have produced affidavits of two government agents, FBI
Special Agent Brent Potter and OFAC Director Richard
Newcomb, demonstrating that the government was in fact
investigating GRF for links to terrorism at the time these
reports were issued. Potter stated that since 1997 he had
been assigned to investigate GRF for possible ties to ter-
rorist organizations (including al Qaeda) and for possible
support of terrorist activities. Although the affidavit is
heavily redacted, Potter detailed some of the evidence the
FBI collected tying GRF to terrorism. Potter revealed, for
example, that GRF was in contact with Wadih el Hage, a
man convicted in the 2001 trial related to the bombings of
U.S. embassies in Kenya and Tanzania. El Hage had served
as personal secretary to Osama bin Laden prior to moving
to Kenya in 1994. While in Kenya, el Hage was in contact
with bin Laden and his military commander, Muhammad
Atef, and also was in contact with GRF’s offices in Belgium
and in Bridgeview, Illinois. According to Potter, GRF promotes
the Islamic jihad movement against established govern-
ments in the Middle East and Asia. The FBI also came into
possession of a copy of GRF’s Arabic-language newsletter
titled, “Global News” that encouraged giving to GRF so that
the money could be spent “for God’s cause (the Jihad),” and
stated that the funds are disbursed for “equipping the raiders,
20 No. 03-1767
for the purchase of ammunition and food.” According to the
Global News, the most important disbursement of Zakat
(the obligation of Muslims to donate 2.5% of their personal
wealth to God) “is on the Jihad for God’s cause.” The FBI
also recovered from GRF’s dumpster photographs of soph-
isticated wireless communications equipment, including
radio transceivers, HAM radio base sets, long range radio
antennas, batteries, power packs, binoculars, ropes, saddles
and tools. The model of radio portrayed in the photos was
found in possession of an al Qaeda suspect under investiga-
tion in the embassy bombings, and was also used in a
terrorist group assassination attempt on Egyptian President
Hosnia Mubarak in 1995.
Newcomb’s affidavit explains generally OFAC’s responsi-
bility in administering U.S. economic sanctions programs
and IEEPA Executive Orders. As this duty relates to GRF,
Newcomb explained that OFAC issued the December 14,
2001 blocking order pending its investigation of GRF:
In making its determination, OFAC evaluated the var-
ious criteria set forth in E.O. 13224, with a primary
focus on subsections 1(c) and 1(d)(I). Subsection (c) per-
mits blocking where persons are determined “to be
owned or controlled by, or to act for or on behalf of”
persons within the scope of the order. Subsection 1(d)(i)
is a basis for blocking where persons are determined to
“assist in, sponsor, or provide financial, material, or
technological support for, or financial or other services
to or in support of” the terrorists and terrorist activity
falling within the scope of the order. OFAC considered
both classified and unclassified information in reaching
its decision to issue the blocking order.
R. 114, Ex. B, ¶ 34. According to Newcomb, since at least
September 2001, “GRF has been the subject of investiga-
tions by Treasury and the FBI relating to links to interna-
tional terrorist organizations and their activities. Based on
No. 03-1767 21
meetings I have attended and briefings I have received from
my staff, it is my understanding that GRF’s links to
terrorist groups generally have been known within the
intelligence and law enforcement communities dating back
many years.” R. 114, Ex. B, Annex, at ¶ 2.
In addition to these affidavits, the defendants also point
to the December 14, 2001 blocking order that froze GRF’s
assets pending completion of the investigation and the
subsequent Treasury Department designation of GRF as a
Specially Designated Global Terrorist (“SDGT”). The
defendants thus argue that they have proved the truth of
their reports that the government was investigating GRF
for links to terrorism and moreover have truthfully reported
on the government’s subsequent action in freezing those
assets and designating GRF as a terrorist organization. The
defendants argue that requiring the media to prove the
actual and ultimate guilt of the subject of a government
investigation would dramatically and improperly chill the
ability of the press to report on the actions of government
and would deny the public information about matters of
vital public concern. We turn to the articles to determine
whether GRF has shown the falsity of the reports, and to
assess the gist or sting of each article.
1.
As with all of the other reports, Antonio Mora’s statements
about GRF were preceded by a report on the September 24,
2001 Executive Order. Mora accurately reported that the
Order was expected to focus on charities and non-govern-
mental organizations in the U.S. and abroad. Mora added
that GRF was one of “a few of the charities accused of
getting funds to bin Laden.” He also repeated the accused
groups’ denials. At the time he made this statement, GRF
had not been “accused of getting funds to bin Laden.” The
22 No. 03-1767
group was being investigated for its financial ties to terror-
ists but had not yet been officially or publicly designated as
a terror financier by the government. In that sense, Mora’s
report was not technically true. The gist or sting of the
report, however, was substantially true.2 That is, the
government was investigating GRF for its ties to terrorism
and anticipated blocking GRF’s assets and adding the org-
anization to the list of SDGTs. As it turned out, the only
inaccuracy of Mora’s report was in the timing of the govern-
ment’s official and public actions against GRF. GRF was not
named in the September 24, 2001 blocking order; it was
named on December 14, 2001, and then was designated a
SDGT in October 2002. Mora’s report was prescient, not
inaccurate.
2.
In the September 28, 2001, New York Daily News article,
Chafets focused primarily on CAIR. He criticized CAIR for
being associated with two philanthropic groups suspected
of being fronts for Hamas. Subsequently, he described CAIR’s
bid for donations to the Red Cross, GRF and the Holy Land
Foundation, stating that GRF has “been accused by Israel
and American security experts of funneling money and
support to Hamas,” and that the group is “currently under
intense federal scrutiny.” GRF, of course, was under intense
federal scrutiny at the time. Although GRF had not been
accused publicly of funneling money to Hamas, the group’s
ties to terrorism were known for many years in the intelli-
gence and law enforcement communities according to the
director of OFAC. The question again was timing. In short
2
Illinois law treats libel and slander alike and thus it is irrele-
vant that Mora’s remarks were spoken and the statements of the
other defendants appeared in print. Bryson, 672 N.E.2d at 1215.
No. 03-1767 23
order, the accusations were made public and the report
proved to be substantially true, as is sufficient under
Illinois law.
3.
The New York Times similarly reported on the Executive
Order and the organizations listed in it. The article then
turned to groups not yet named but anticipated to be
included in future government action. GRF is listed as a
group that administration officials “are also recommending”
be included on the new list. The article reveals that GRF
appeared two years earlier on a Clinton administration list
of thirty organizations with suspected ties to terrorism.
GRF does not dispute the reference to the Clinton-era list,
but instead complains about the “recommending” language,
arguing that it is a mere repetition of a government slur
against GRF. But again, the report is true. Administration
officials were investigating GRF for ties to terrorism and
had been doing so since 1997. Government officials did
recommend that GRF be included on a future list and it was
in fact subsequently included on the list of blocked organi-
zations and SDGTs.
4.
The AP report recounted the Executive Order and the
organizations included in the first blocking order. The
article identified GRF as one of several “U.S.-based relief
organizations receiving close federal scrutiny” that “may or
may not be on the government’s next list.” The article also
repeated a statement by GRF’s lawyer, who remarked that
GRF would “have no problem in providing humanitarian
assistance to a suicide bomber’s family.” This is the worst
of what the AP had to say about GRF. We need not spend
much time analyzing this article because as should already
24 No. 03-1767
be clear, this report was literally and absolutely true. GRF
was under close federal scrutiny and its inclusion on the list
of blocked organization was under contemplation. Although
GRF denies that it would aid the families of suicide bomb-
ers, it does not dispute that its own lawyer actually said
this to the press. That dispute is thus immaterial to the
defamation claim.
5.
In the Boston Globe article, author Mac Daniel reported
that GRF “may be a clandestine agent of terror, according
to federal investigators.” Daniel noted that GRF appeared
on a list of thirty U.S. charities with alleged ties to ter-
rorism two years earlier, following the embassy bombings.
The October 11, 2001 article asserted that GRF was ex-
pected to be added to the Treasury list of U.S. charities with
alleged ties to terrorism in the following week. Daniel noted
that GRF would not produce documents showing how its
money was spent once it was sent overseas, and that
legitimate international relief agencies were unfamiliar with
GRF. This article was substantially true. The government
suspected GRF of funding terrorist activities, considered
blocking the group’s assets and later blocked those assets
and named GRF a SDGT.
6.
The Hearst article focused on Bay Area donors to Muslim
charities that were being investigated for financial links to
terrorism. The authors described GRF as an organization
the Treasury Department was scrutinizing, and repeated
GRF’s denials of any involvement in terrorism. The report
also quoted a security consultant, Rita Katz, who opined
that donors to GRF get only part of the truth about the
ways the contributions are used. Katz stated that although
No. 03-1767 25
some of the money goes to humanitarian activities, some
goes to Hamas or al Qaeda. Katz’s comments were consis-
tent with the government’s actions against GRF and added
nothing to the article’s true recounting of the government’s
investigation.
B.
Ultimately, all of the reports were either true or substan-
tially true recitations of the government’s suspicions about
and actions against GRF. “When determining the ‘gist’ or
‘sting’ of allegedly defamatory material, a trial court must
look at the highlight of the article, the pertinent angle of it,
and not to items of secondary importance which are inoffen-
sive details, immaterial to the truth of the defamatory
statement.” Parker v. House O’Lite Corp., 756 N.E.2d 286,
296 (Ill. App. 1 Dist. 2001) (citing Gist v. Macon County
Sheriff’s Dept., 671 N.E.2d 1154 (Ill. App. 4 Dist. 1996))
(internal quote marks omitted). Any inaccuracies which do
no incremental damage to the plaintiff’s reputation do not
injure the only interest that the law of defamation protects.
Haynes, 8 F.3d at 1228; Gist, 671 N.E.2d at 1157. We will
thus ignore inaccuracies that do no more harm to GRF than
do the true statements in the articles. The gist or sting of
each article was that the President had issued a blocking
order on September 24, 2001 against a number of organiza-
tions suspected of providing financial assistance to terrorist
groups, and the government was now contemplating adding
other charities and non-governmental organizations to the
list of blocked entities. Each article named GRF as one of the
charities being investigated by the government, and a few
noted that GRF had appeared on a list of organizations with
suspected ties to terrorism years earlier. Many of the
articles included GRF’s denials and none of the articles
concluded that GRF was actually guilty of the conduct for
which it was being investigated. See Cartwright v. Garrison,
26 No. 03-1767
447 N.E.2d 446, 449-50 (Ill. App. 2 Dist. 1983) (statement
that possible legal ramifications resulting from States’
Attorney’s investigation could include criminal penalties
could not reasonably be interpreted as accusing plaintiff of
a crime and thus was not actionable). The government in
fact added GRF to the list of blocked entities within a few
months of these publications, and later classified GRF as a
SDGT or Specially Designated Global Terrorist. GRF
continues to fight that designation in a separate case but
that dispute does not change the fact that the government
in fact took these actions as reported. The only inaccuracy
in the articles is the timing of the government’s official
actions against GRF and this inaccuracy does no more harm
to GRF than the true statements in the articles. Recall, too,
that GRF had already appeared two years earlier on the
Clinton-era list of thirty organizations with suspected ties
to terrorism. Moreover, for a number of the reports, GRF
has no evidence demonstrating the falsity of the report and
thus fails to make out an essential element of its claim. For
the remainder of the cases, where something in the report
was not technically true (such as the timing of the govern-
ment’s accusations and actions), the defendants are entitled
to judgment on the defense of substantial truth. See
Sivulich, 466 N.E.2d at 1220 (article was substantially true
even though it contained immaterial error as to the date the
complaint was filed). The defense of substantial truth is
normally a jury question. Parker, 756 N.E.2d at 296; Cianci,
698 N.E.2d at 679; Gist, 671 N.E.2d at 1157. But first,
courts must ask whether a reasonable jury could find
substantial truth has not been established. If the answer is
no, the question is one of law. Parker, 756 N.E.2d at 296;
Cianci, 698 N.E.2d at 679; Gist, 671 N.E.2d at 1157. This is
such a case. No reasonable jury could find that substantial
truth has not been established. The court was thus correct
to enter judgment in favor of the defendants.
No. 03-1767 27
C.
We reject GRF’s argument that these media defendants
must be able to prove the truth of the government’s charges
before reporting on the investigation itself. We find una-
vailing GRF’s attempts to distinguish three cases which are
directly on point. See Gist, 671 N.E.2d 1154; Sivulich, 466
N.E.2d 1218; Vachet v. Central Newspapers, Inc., 816 F.2d
313 (7th Cir. 1987). On August 1, 1994, Gist was charged
with burglary to a motor vehicle and a warrant was issued
for his arrest on that same day. The warrant was not served
on Gist, and after he spoke to someone at the sheriff’s
department on October 26, 1994, a “no-charge” was issued.
Gist, 671 N.E.2d at 1156. Nonetheless, the sheriff’s depart-
ment subsequently distributed a “most wanted fugitives”
flyer that contained Gist’s picture, his name, and the charge
for which he was wanted, along with similar information for
other fugitives. The flyer stated that these fugitives were
wanted as of October 6, 1994 and warned that they should
be considered armed and dangerous. Gist sued the sheriff’s
department for defamation, and the department defended
the claim by citing the defense of substantial truth. As in
the instant case, the court looked to the gist or sting of the
allegedly defamatory material. The court found:
Here, the essence of the matter is that plaintiff was
wanted on an arrest warrant as of October 6, 1994, for
burglary to a motor vehicle, which is entirely true. That
plaintiff “might possibly be armed” or “should be consid-
ered dangerous” or was a “most wanted” fugitive— to
the extent such statements can even be considered as
applying to plaintiff or asserting facts about him— are
all secondary details, immaterial to the truth of the
Crime Stoppers flyer. Viewing the three allegedly defam-
atory statements under the totality of the circumstances,
we conclude that the trial court’s decision was also
proper in light of the “substantial truth” of the flyer.
28 No. 03-1767
Gist, 671 N.E.2d at 1157-58 (emphasis in original). The
court did not require that the sheriff’s department prove
the truth of the underlying burglary charge but only the
truth of the statement that Gist was wanted for burglary as
of October 6, 1994, even though the charges had apparently
been dropped by the time the flyer was distributed.
Similarly, in Sivulich, a newspaper printed a story about
a physical confrontation between Sivulich, a high school
football coach, and NeCastro, the grandfather of one of the
players. NeCastro filed a civil suit against the coach, and on
the next day, the story appeared stating that Sivulich was
involved in an altercation with the grandfather of one of the
players, that the altercation resulted in the loss of a tooth
and more than $500 worth of “personal damages to the 70-
year-old man.” The article continued:
Charges of aggravated battery have been filed against
Sivulich. Final papers were signed Wednesday, served
in court Thursday and are expected to be handed to
Sivulich today. Sivulich will have until Nov. 9 to re-
spond to the charges.
Sivulich, 466 N.E.2d at 1219-20. Sivulich sued the newspa-
per, alleging that the statement “charges of aggravated
battery have been filed against Sivulich” was libelous per
se. Sivulich argued that the word “charged” could only be
interpreted as a criminal charge when in fact criminal
charges were never filed. The court found that, read in the
context of the statement about personal damages and a
$500 loss, it was clear that the charges were of a civil
nature. The court thus found that with the exception of an
immaterial error as to the date the complaint was filed, “the
article is substantially true.” Sivulich, 466 N.E.2d at 1220.
The civil suit was ultimately settled. Again, the court did
not require the newspaper to prove that Sivulich actually
was guilty of aggravated battery or that he caused personal
damages of $500. It was enough that the newspaper was
No. 03-1767 29
substantially truthful in its report that civil charges had
been filed against Sivulich.
Finally, in Vachet, a newspaper published a story about
the arrest of the plaintiff, Michael Vachet, on charges of
harboring a fugitive and driving on a suspended license. An
elderly woman had been raped and police were searching
for their primary suspect, Michael Saucerman. Vachet had
called the police to tell them he knew where to find
Saucerman. Saucerman had been traveling with Vachet,
and after a purported attempt by Vachet to arrange
Saucerman’s surrender failed, the police decided to charge
Vachet with harboring a fugitive. A police lieutenant pre-
pared an affidavit to obtain a warrant for Vachet’s arrest
but the prosecutor’s office failed to complete the paperwork
and the warrant had not yet been issued when Vachet was
arrested. A local newspaper reported that Vachet was ar-
rested on charges of harboring a fugitive and driving on a
suspended license. The article explained that police arrested
Vachet on a warrant alleging that Vachet knew the where-
abouts of Saucerman, who was wanted on a charge of at-
tempted murder and other charges. The next day, when
Saucerman was arrested, the newspaper repeated that
Vachet had been arrested and charged with harboring
Saucerman. Vachet sued the paper for falsely reporting that
he had been arrested and charged with a criminal offense
involving moral turpitude. Vachet, 816 F.2d at 314-15. He
specifically complained that the articles caused him to
appear to be associated with the alleged rapist of an elderly
woman.
The paper defended by asserting the substantial truth of
the articles because Vachet had in fact been arrested for
harboring Saucerman, a fugitive. Vachet pointed out that
the warrant had never actually issued. Applying Illinois law
as we must in this case as well, we found that literal truth
was not needed but that the newspaper could successfully
defend the suit by showing the truth of the gist or sting of
30 No. 03-1767
the story. Vachet, 816 F.2d at 316. The gist or sting to which
Vachet objected was his association with a suspected rapist
of an elderly woman. We found that the gist of the story
was true: Vachet had been arrested for harboring a man
suspected of raping an elderly woman. We found the
particulars of the arrest, whether by warrant or as autho-
rized by state statute, were inoffensive details. Id. We did
not require the paper to prove that Vachet had in fact
harbored Saucerman.
GRF’s main response to these cases is that each involved
public investigations and proceedings, and that the defen-
dants in the instant case were reporting on secret investiga-
tions. But there is no difference between public and private
investigations in the applicability of the defense of substan-
tial truth:
A person does not have a legally protected right to a
reputation based on the concealment of the truth. This
is implicit in the rule that truth—not just known truth
(see Restatement (Second) of Torts § 581A, comment h
(1977); Prosser and Keeton on the Law of Torts, § 116,
at pp. 840-41 (5th ed. 1984))—is a complete defense to
defamation. And the burden of proving falsity rests on
the plaintiff.
Haynes, 8 F.3d at 1228. The fact of the investigation was
true whether or not it was publicly known. That is all that
the defendants need to show for the defense of substantial
truth. This they have done.
D.
GRF also complains that it was prevented from com-
pleting discovery into the government’s investigation and
evidence against GRF. GRF wished to depose the authors of
the affidavits on which the defendants rely for their defense
of substantial truth. GRF complains that the affidavits do
No. 03-1767 31
not establish that GRF actually funneled money to terror-
ists and that only through depositions could GRF show that
the government had no evidence capable of supporting the
imputation of guilt. GRF’s argument misses the mark again,
however, because the sting of the articles was not that GRF
was actually funneling money to terrorists but that the
government was investigating the group for links to terror-
ism and contemplating freezing GRF’s assets. The sting was
that such an investigation was being conducted, not that
GRF was guilty of the conduct for which it was being
investigated. The particulars of the government’s investiga-
tion are thus not relevant to this defamation case and the
district court was within its discretion to rule without
allowing this discovery. GRF does not seriously dispute that
the government was in fact conducting the investigation.
The resulting blocking order and designation as a SDGT did
not materialize out of thin air, after all, but were the result
of a government probe. Whether the government was
justified in its probe is irrelevant to the defamation claims
when these media defendants accurately reported on the
investigation itself.
III.
We have carefully considered all of GRF’s other argu-
ments and find no merit in them. The district court was
correct to enter summary judgment in favor of the defen-
dants because their reports about GRF were substantially
true. GRF was in fact the subject of a federal investigation
for links to terrorism and the government ultimately
concluded that the group’s activities earned it a spot on the
list of Specially Designated Global Terrorists. Whether the
government was justified in its investigation or correct in
its ultimate conclusion is irrelevant to a suit against news
media defendants for accurately reporting on the govern-
ment’s probe.
AFFIRMED.
32 No. 03-1767
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—12-1-04