LIBEL SUIT RAISES QUESTIONS ABOUT ACCOUNTABILITY ONLINE

A Mexican bank sues a journalist who is reporting on the drug war for
statements on the bank's chief.

Four years ago, veteran journalist Al Giordano moved for security
reasons to an undisclosed location in Mexico to write firsthand on
the drug war.

Last Friday, he found himself in a small, crowded courtroom in New
York facing defamation charges filed by Banco Nacional de Mexico,
also known as Banamex.

From Mr. Giordano's perspective, this is a new front line in the
fight against powerful drug traffickers. From the bank's perspective,
it's a question of maintaining integrity.

Either way, Internet and legal scholars say it is a potentially
precedent-setting case that raises fundamental questions about free
speech in the globalized world of cyberspace, as well as the role of
the independent journalists in a media world increasingly controlled
by corporate giants.

"The case ... presents two issues that will play a key role in
determining the viability of online, independent journalism,"
according to Cindy Cohn of the Electronic Frontier Foundation in San
Francisco, which filed an amicus brief on behalf of Giordano et al.
"[One is] the ability of foreign plaintiffs to forum shop abusively,
subjecting online, independent journalists to foreign laws ... and
[two, is] the freedom of online journalists to republish articles on
the Internet from publications in the offline realm without
unreasonably being subjected to liability."

Giordano's alleged offenses occurred at a Columbia Law School forum,
in two press interviews (one with The Village Voice), and on his
website. What he did was repeat allegations that the head of Mexico's
most powerful bank was involved with narco-trafficking and money
laundering. His statements were based on stories about cocaine
trafficking written by Mario Menendez, a Mexican journalist.

Banamex is also suing Mr. Menendez in New York. Three similar
defamation cases brought by the bank against him in Mexico were
dismissed.

"This is a harassment suit, this is a slap suit. They cannot win this
suit," said Giordano outside the State Supreme Court building. "They
only hope to drag it on and on to stop me and Mario Menendez from
reporting on the truth of the corrupt drug war."

The bank's attorney says the cases in Mexico were dismissed on a
technicality and that the substance of the allegations against
Banamex's CEO Roberto Hernandez are untrue.

"Banamex is a largely privately owned bank that does millions of
dollars of business in New York," Banamex's attorney Tom McLish told
the judge last week. "Mr. Menendez [and Giordano] came to New York
specifically to defame Banamex by claiming its chairman is a
narco-trafficker and money launderer."

Mr. McLish, of the Washington law firm Akin, Gump, Strauss, Hauer and
Feld, said the allegations make the Banamex chairman vulnerable to
charges he violated the federal "drug kingpin law," and his assets in
the US could be frozen and seized.

Menendez and Giordano, who researched the story independently, stand
by their assertions about the Banamex chairman. Last Friday, they
asked the court to dismiss all charges.

Giordano, an investigative journalist who used to work for The Boston
Phoenix, moved to Mexico to expose what he believes is the complicity
between some legitimate businesses and government officials and the
drug traffickers. "You know the movie 'Traffic'?" he says. "I live
that every day."

Giordano's website, Narconews.com, is also being sued, because it
posted a translated version of one of Menendez's stories on the
Banamex chairman. The lawyer who represents the site contends it is
inappropriate for the Mexican bank to bring charges in New York.

"This site emanates from Mexico," says attorney Tom Lesser. "It has
nothing to do with New York. Its focus is the drug war, the
ramifications of the drug war, and politics in Latin America."

Banamex attorney McLish says New York is the appropriate venue,
because statements were made here and Narconews.com is registered to
a post-office box in New York. "It would make no sense to sue
somewhere else for false statements they were made in New York to New
York audiences," says McLish.

But Giordano, who is representing himself, says the statements made
in New York were "protected opinions" based on specific facts. The
website, in addition, is registered here only to protect his safety.
He insists that Banamex is suing in New York only because it failed
in its attempts to discredit the stories in Mexico.

"If the National Bank of Mexico can sue journalists in Mexico for
telling the truth, there are 1.4 billion websites on this planet
earth that can be dragged into New York, the most expensive court
jurisdiction and the most backlogged in the world," he says. "That
would have a chilling effect."