CROSS-FIRE IN THE DRUG WAR

American journalist Al Giordano runs Narco News from his laptop in Mexico,
reporting on the drug trade with a decidedly activist slant that aims to
get under the skin of drug traffickers, money launderers, corrupt
governments, and journalists for big news companies he thinks have
overlooked important stories in Latin America.

Among his targets has been Roberto Hernandez Ramirez, the president and
primary shareholder in Banco Nacional de Mexico (known as Banamex),
Mexico's second biggest bank, which was acquired last month by Citigroup
for $12.5 billion.

Hernandez, whose stock value would be $1.9 billion if the deal goes
through, was first accused in 1996 by the Mexican newspaper Por Esto! and
later by Narco News of cocaine trafficking, money laundering and other
illicit acts. He has vigorously denied the charges and pressed for
sanctions against Por Esto! in three Mexican courts, both for publishing
the stories and for taking photos on his private beachfront in the Yucatan.
Three Mexican courts dismissed the case. (See sidebar, Mexican Bank,
Mexican Web Site, New York Courtroom.) [below]

But now, Banamex has brought a libel suit in New York against Narco News,
Giordano, and Mexican journalist Mario Renato Menendez Rodriguez. It claims
the state has jurisdiction in the case because Narco News' site is
registered at a post office box in Manhattan and Giordano repeated the drug
allegations at a forum at the Columbia University School of Law, among
other reasons. The parties had their first hearing in the suit July 20 in
New York, where Judge Paula Omansky expressed concern about her court's
jurisdiction and sought to find out exactly what happened in the Mexican
courtrooms. She has asked both sides to file affidavits before the next
hearing begins.

The ramifications of the libel suit extend well beyond this case. An
attorney for Narco News filed a motion to dismiss, arguing that if the
lawsuit is allowed to proceed, it would send a signal to libel plaintiffs
that they could shop for a friendly forum in which to sue any Web site
anywhere in the world -- a precedent that would imperil free speech on the
Net. OJR spoke to Giordano, a former writer for the Boston Phoenix, last
week at a Greenwich Village restaurant for more than an hour about his
case, the Web site and public journalism. What follows is an edited
transcript of that conversation.

Q. How did you start Narco News?

A. I went to Mexico in July 1997 and I spent the better part of the next
year retired from journalism. I'd had it. I was a political reporter and
there was nothing happening anymore in politics. And the state of
journalism itself bothered me. ... I went to Chiapas with the idea of
learning from the Zapatista independent rebels because they seemed to be
the only ones in the hemisphere having any success at making social change.

The Zapatistas taught me what I should have already known: "Look, we don't
want you to live like an Indian. We just want the right to live as who we
are. And who you are is a journalist." (And I responded,) "No, I'm not."
They got me thinking maybe there was a way to do journalism without being
beholden to advertisers or the constant struggle to pitch work at a market
niche that is bought by consumer products. And much of the alternative
press has really gone down that route just as a matter of economic
survival. They had to. But what I want to do as journalism seems to be dying.

Q. Have you found a way to do that and still make a living?

A. I don't make enough to live in New York, but I make enough to live
comfortably in Mexico. The cost of living is very cheap.

Q. So you're still doing freelancing?

A. Yes, I do translation work and analysis work. I get small grants so it
seems to be working out.

Q. But does Narco News have any income?

A. No, it doesn't even have a bank account. It has a defense fund now, but
that all goes to lawyers. I have regularly been approached by people who
want to advertise because they're looking at the hit count and it's quite
substantial. But part of the point of Narco News is that it doesn't need to
make money. It really needs no more than your $270 annual (payment) to the
ISP. I use Hotmail, which is a free Internet service, and part of the thing
is that you don't need a large corporation or sponsor behind you.

Q. Let's talk a little about the site. How many hits you get?

A. Before we got sued we had an average of 3,000 hits a day and now we have
an average of 25,000 hits a day.

Q. Do you know where your audience is from?

A. Primarily the English-speaking world, but whatever method we use to
measure hits, the part about how they measure what countries they come from
doesn't work. But I have almost 1,000 subscribers now. And a good solid
percentage of them are journalists, from the United States, from Mexico,
from the rest of Latin America, and the rest are from Europe.

Q. And has that mostly been since the trial got underway?

A. I had 185 subscribers when the Village Voice published the story last
December.

Q. Are you kind of a one-man Narco News?

A. Yes.

Q. You had something way down there (on the site) that refers to
correspondents. Do you have people feeding you stuff they couldn't print
elsewhere or were giving you tips?

A. All of that. This is a project in citizen journalism. From day one we
have always invited the public to participate, to criticize, to publish
their thoughts whenever it was relevant or newsworthy.

Q. You say this is a project in public journalism. Talk to me about how
this has been a success as public journalism and where you would like to go
with it. Say the lawsuit goes away, what is Narco News in your wildest dreams?

A. Narco News will simply stick to what works, which is translating the
work of courageous Latin American journalists and commentators and
perspectives on the war on drugs that are generally not heard in the
English-speaking world. And doing original reporting, analysis and
commentary, and offering space for myself and others on the drug war in
Latin America and the United States' drug policy. Narco News is born to
die. The day that drugs are legalized, the day there is no more narco
trade, the day there is no more mafia, Narco News will simply be an
archive. It's not a profit-making venture. But unfortunately, it looks like
Narco News is going to be around for a while.

Q. Are you married, or have kids? Assets?

A. I have no kids. I have no assets. I own no property. I own no car. When
I left the Boston Phoenix, I defaulted on my credit card and I went to
Mexico with $800 to my name. I own a laptop, which was bought with a grant
from the Angelica Foundation, and I own a guitar that I use sometimes to
supplement my income. Obviously Banamex has plenty of laptops, so I figure
that Roberto Hernandez is after my guitar, but he ain't getting' it.

Q. If somebody else wanted to start an activist Web site but owns a house
and has some assets -- should he have no assets to start a Web site like this?

A. No, I would recommend that he join the National Writers Union and take
out libel insurance, which is something any NWU member can do. People can
do what silly old me should have done.

Q. Who else has been supporting you? I know you have the Electronic
Frontier Foundation filing a brief, but what about the First Amendment
Coalition or other newspapers?

A. Nope. Nope. Nope.

Q. Have you contacted them?

A. I have contacted them all.

Q. And can you summarize why they said no?

A. You should call them and ask. I think in some cases the organizations
are sincere and overburdened. Some say that because it's in a state court a
national organization can't do it. Or because it's a foreign case they
can't do it. ... This case is going to make new law. It is either going to
make good law or it is going to make bad law. That's why we're here. I
could have avoided this; I didn't have to be here. But if I didn't come,
then every other Internet site in the world, every other activist site
would be in greater jeopardy because of my own cowardice.

Q. What's the most important element of this case?

A. It's the big economic powers that forum shop and use the courts to
harass people of modest means. That is the real threat to free speech in
this day and age. In other words, it's not the government anymore doing the
censorship, it's the private sector. It's the new ruler.

Q. Anything else you'd like to add?

A. In Banamex's motion to dismiss, they sought to add more reasons why they
had jurisdiction in New York, each of them more spurious than the next. The
most outrageous one was that they claimed because in the days after we
founded Narco News, I received an invitation from the Media Channel, at
Mediachannel.org, to affiliate with them. Now, there're no dues involved,
there's no payment, there's no financial transaction involved. It is just a
show of solidarity with other authentic journalists around the world. The
Media Channel now has more than 600 affiliates. ... Banamex is trying to
establish a precedent here where any one of these could be hauled into New
York court for something they said in their home country. This is outrageous.

Q. Are they based here?

A. Yes, they are based in Times Square. Imagine the consequences not just
for the Media Channel and its affiliates but for every journalism
organization that has an office in New York, or for citizen organizations.
New York would lose its role as a haven for free speech. And I'm not just
talking about journalism, I'm talking about Broadway, the union movement,
I'm talking about the Statue of Liberty, opening the doors up for people to
pursue a certain kind of freedom. This is being threatened by the new world
economic order, where people with lots of money can just throw their money
around and abuse the court system. That's what is at stake here.

Q. Do you think you're going to get a fair trial?

A. Yes.

Q. Anything else you want to add?

A. I have not stopped publishing about Hernandez or Banamex or Citigroup or
any of the parties here. To the contrary, ever since I learned about the
lawsuit, and particularly after the Citigroup-Banamex merger were announced
in May, I have published far more about all three entities than I had
before the lawsuit was filed. We start reporting again next month. Stay tuned.

[sidebar]

MEXICAN BANK, MEXICAN WEB SITE, NEW YORK COURTROOM

Is Banamex Forum Shopping Or Simply Seeking Its Day In Court?

When Al Giordano, a former political reporter for the Boston Phoenix, moved
to Mexico and started a Web site to cover the drug wars in Latin America,
he didn't suspect the endeavor would land him in a New York courtroom.

But there he was on July 20, sitting in front of Judge Paula Omansky of the
state Supreme Court, New York's trial-level court. The court's actions in
the case bear watching by the legal community, law professors -- and anyone
running a Web site. (For Giordano's take on the case, see the main article,
Cross-fire in the Drug War.) [above]

Narco News, which Giordano published from his laptop in Mexico, now has him
in a legal standoff with one of Mexico's most important bankers and a
powerful Washington, D.C.-based law firm. The lawsuit was filed a year ago,
the first hearing was held 10 days ago, and attorneys said it could take
five months before even the issue of jurisdiction will be decided.

Make no mistake, Narco News posts a style of writing you won't find landing
in your typical American driveway or on the major wire services. The slant
is opinionated, left-wing and activist. But that doesn't undermine its
legitimacy, especially on the Web.

Last fall Giordano gained media attention when an Associated Press
correspondent in Bolivia resigned after Narco News reported that the AP
writer had lobbied the government there on a water project. And Giordano
takes credit for spurring major U.S. papers like the Los Angeles Times to
report that the president of Uruguay was calling for the decriminalization
of illicit drugs.

The current libel and slander case was originally brought in 1997 against
Por Esto!, a daily newspaper in the Yucatan with a circulation of 70,000;
it also publishes a Web site. It ran a three-part series in December 1996
alleging that drugs were being shipped to banker Roberto Hernandez
Ramirez's beachfront property in the Yucatan, unloaded and flown to the
United States. It also said he was damaging Mayan ruins on his property and
that he and his business partner were trying to run off local fisherman and
other landowners.

Giordano said the Por Esto! report was "supported by witness testimony,
documents, facts." He said "the neighboring fishermen also went on the
record, including at least one by name, as witnesses to the boat and plane
activity in and out of Hernandez's property."

The bank and Hernandez deny the accusations and maintain that the
publishers of the Web site and the newspaper knew the statements were false
when made.

Por Esto's reporters were taken to the Hernandez property by local
fisherman who said they had seen drug trafficking taking place on the
property. The reporters also took photos, which, according to the captions,
show trash washed up on the shoreline that indicates drug traffickers were
in the area. Another photo shows stacks of packages in a warehouse. The
caption identifies the packages as cocaine seized by local authorities.

Thomas McLish, an attorney with Akin, Gump, Strauss, Hauer & Feld, the firm
representing Banamex, disputes the caption information. "Menendez and
Giordano have continually mischaracterized and misrepresented what those
photographs show. Banamex is unaware of any photographs that support the
defendants' accusations," he said in an e-mail interview last week.

However, after Por Esto publisher Mario Menendez ran the story, turned the
cocaine over to the police, and filed a criminal complaint against
Hernandez, the paper was slapped with trespassing and defamation charges.
Giordano said local law officers were in Hernandez's back pocket, which is
why the publisher and not the bank faced charges.

Menendez's case was heard in three different courts, but he eventually won
at all levels. McLish said the case was dismissed on a technicality.

"Banamex did everything it could do under the law of Mexico," David Atlas,
the attorney for Menendez, said told the New York court July 20.

After the case was dismissed, Menendez and Giordano traveled to New York in
March 2000 to attend an event at Columbia Law School, where they both made
statements recounting the story about Hernandez. They returned to Mexico
and in April 2000, Giordano started the Narco News Web site. In late May,
he ran his first story about Hernandez, in which he cited Por Esto's
reporting and says his own investigation into the allegations have
convinced him the accusations are true.

On Aug. 9, 2000, the bank filed suit in New York, charging libel over the
written accusations and slander charges for the statements made at the law
school as well as statements made to the press around the same time. The
defendants are Menendez, Giordano and the Narco News Bulletin.

Judge Omansky, who made it clear that she wanted more information about
Mexican law and how this case was handled there, nonetheless said that if
she were in the defendant's shoes, "I would feel free to come to the United
States and say substantially the same thing" if I'd just been cleared in
Mexico.

The bank, popularly known as Banamex, is a wholly owned subsidiary of Grupo
Financiero Banamex-Accival, also known as Banacci. Hernandez is the
chairman of the board of directors, general director and largest
shareholder of Banamex. U.S. financial behemoth Citigroup is in the process
of buying Banacci in a $12.5 billion cash and stock deal. Reuters reported
earlier this month that Hernandez's stake would be worth $1.9 billion if
the takeover is completed. Banacci is also one of the most popular Latin
American stocks with U.S.-based investment funds, according to a Reuters
report.

McLish, who argued in court that the accusations against Hernandez could
jeopardize his assets under the U.S. Drug Kingpin Act, declined in an
e-mail exchange to address whether the issue holds any implications for
Citigroup.

EFF Warns Of Threat To Independent Journalists

The Electronic Frontier Foundation filed a brief with the court in support
of Giordano. "The EFF is concerned that the bank resorted to New York
courts to try to shut down this Web site because it could not do so in
Mexican courts," Cindy Cohn, legal defense director of the EFF, said in a
statement. "This kind of forum shopping threatens to shut down one of the
greatest benefits of the Internet -- giving a voice to independent,
Internet-based journalists. Faced with having to defend themselves in
far-flung jurisdictions, many independent journalists will simply choose
not to publish on the Internet."

But McLish said his client is not shopping around for a forum to convict.
"This is the first lawsuit that Banamex has filed regarding these
accusations. There were prior proceedings in Mexico, but they were brought
by the Mexican government, not Banamex, and did not even involve the same
statements at issue now, and did not address the truth or falsity of the
statements. Banamex was not a party to the Mexican proceedings."

The bank's complaint spells out its defamation claim: "Describing it as
'the Banamex story,' the Narco News Bulletin articles have falsely asserted
and implied that (a) Banamex was purchased and is funded with the proceeds
of illegal drug trafficking, (b) Banamex is controlled and managed by a
criminal drug trafficker, (c) Banamex maintains a favored position with the
government of Mexico, including law enforcement authorities, through
bribery with money illegally obtained from drug trafficking, and (d)
incontrovertible proof exists that Banamex's president and chairman is
involved in drug trafficking. In addition, some of these articles repeated
and republished false and defamatory statements defendant Menendez made
about Banamex while in New York."

Giordano claims that all his stories are true and whatever issue there is
should be resolved in Mexican courts since that is where he posted the
stories. Attorneys for the bank claim the stories are false, that the
pictures do not show what the captions claim, and that the case can be
tried in New York for a number of reasons.

McLish said in court that the bank pays taxes in the United States and does
millions of dollars of business here. The complaint also points out that
the Narco News site is registered to a post office box in New York, and
that many of its readers live in New York. It also states that Narco News
is affiliated with organizations in New York that raise funds on his behalf.

"Their false and scurrilous statements are highly damaging to Banamex in
New York, where it is subject to U.S. laws that impose harsh and
potentially ruinous penalties upon foreign banks associated with drug
trafficking and money laundering. It would make no sense to sue somewhere
else for false statements they made in New York to New York audiences,"
McLish said.

The Internet service provider for Narco News, Voxel.net, is in Maryland.

Jurisdiction On The Net A Murky Issue

The problem faced by Narco News is not unique, said Jonathan Zittrain, an
assistant professor at Harvard Law School and the faculty co-director of
the Berkman Center for Internet & Society.

Zittrain, who has no involvement with the case, said that generally,
someone could sue wherever a claim of harm arises. "It would be up to the
court where it was filed. The court could say people could read it here,"
he said. "It gets mushy pretty quickly."

Zittrain said the possibility of so many Web sites being hauled into court
is slim because of the expense in bringing a suit. But if a big corporation
decides to sue a little guy and begins a long and costly court fight,
that's nothing new just because it happened online. "If a large bank wants
to make you unhappy, they can make you unhappy even if you go nowhere near
the Internet," Zittrain said.

Giordano said about $20,000 has been given so far to the legal fund to
battle Banamex, but that more is needed.

"This is becoming very expensive," he said at a news conference following
the New York court hearing. "We're fighting for freedom of the press for
journalists everywhere."

Giordano also asserts that the case was filed in New York just to raise
costs and slow down the process. "They don't want a speedy trial. They
don't want speedy justice," Giordano said. "They know this is the most
bogged court in the United States."