Government, News Media Settle Suit by Wen Ho Lee

The U.S. government and five news organizations, including the Los Angeles Times, agreed Friday to pay $1.65 million to former nuclear scientist Wen Ho Lee to end a lawsuit claiming his privacy was violated by leaks that portrayed him as a spy.

Lee sued the government, not the media. But he subpoenaed five reporters and demanded that they name the federal officials who spoke to them.

The unusual agreement heads off a Supreme Court confrontation over whether reporters can be fined and jailed for refusing to reveal their sources to lawyers who are pursuing a civil suit.

“This was never about whether the stories were right or wrong or about libel or about classified information,” said Bob Drogin of The Times, who was one of the reporters subpoenaed. “We had fought this for four years and lost at every level. And we thought there was a great risk for the press if we took it before the Supreme Court and lost.”

Earlier this year, the high court refused to block the jailing of New York Times reporter Judith Miller, who had declined to disclose her sources in a criminal prosecution involving leaks from the White House.

Experts in media law said Friday that they were unaware of another case in which news organizations had agreed to pay a settlement when they were not sued.

Jane Kirtley, a law professor at the University of Minnesota, said the news organizations were in an “untenable position,” but she feared the settlement would set a precedent that would encourage more lawsuits. “I think a lot of watchers are likely to interpret this as a concession that there was fault here,” she said.

Federal law has few protections for journalists. Most states have laws that protect reporters from being forced to disclose their confidential sources in most instances. But the Supreme Court has not recognized such a right under the 1st Amendment and its protection for freedom of the press. There is no federal shield law.

The settlement reached Friday leaves the issue in limbo. It also leaves unanswered the question of who leaked damaging information about Lee.

The government did not acknowledge any wrongdoing but agreed to pay $895,000 to the physicist. The money, it said, “may only be used” for his legal fees and taxes.

The media organizations -- ABC, the Associated Press, the Los Angeles Times, the New York Times and the Washington Post -- said they agreed to pay $150,000 each, for a total of $750,000, to avoid further costs of fighting the case.

“We were reluctant to contribute anything to this settlement, but we sought relief in the courts and found none,” the media organizations said in a statement. “The journalism in this case -- which was not challenged in Lee’s lawsuit -- reported on a matter of great public interest, and the public could not have been informed about the issues without information that we were able to obtain only from confidential sources.”

Lee said he hoped government officials and journalists would exercise more caution in disclosing damaging speculation about individuals.

“The rush to judgment that occurred in my case was prompted by a number of calculated, unlawful leaks by government officials,” he said in a statement. The information leaked to the media “was in my case often misleading, harmful and disclosed with a political agenda,” he added.

In the late 1990s, Lee became the target of a spying probe at the Los Alamos National Laboratory in New Mexico. He was fired, and news reports said he was suspected of leaking nuclear secrets to China. He was held in solitary confinement for nine months.

But when his case came to trial, the serious charges against Lee were dropped, and a judge apologized to the scientist for his treatment at the hands of the government. Lee pleaded guilty to one count of unlawfully downloading classified information.

He then sued the Energy Department, the Justice Department and the FBI, not for defaming him with false charges, but for having wrongly leaked information from his private files as a government employee.

The Privacy Act forbids the release of such records, and officials who knowingly violate it can be sued.

Lee’s lawyers suspected the anonymous sources probably were top officials of the Energy Department, including then-Secretary Bill Richardson and the department’s director of counterintelligence, Notra Trulock. But when questioned under oath, these officials and several others denied leaking information about Lee to the media, according to Lee’s lawyers.

Lee’s lawyers then called on the reporters who wrote about Lee’s case and demanded they reveal the names of the unnamed sources cited in their stories. The reporters, including Drogin, refused to reveal whom they had spoken to in confidence.

For nearly five years, the media organizations and Lee’s lawyers battled in the courts.

A federal judge ruled the reporters must “truthfully answer questions” about the identity of their sources. He held them in contempt, imposed $500-a-day fines and threatened them with jail time. However, that order was stayed, pending appeals.

A panel of the U.S. Court of Appeals in Washington upheld the judge’s order, and the full appeals court split 4-4 on the matter.

Lawyers for The Times and other news organizations petitioned the Supreme Court to take up the issue and decide whether journalists should be forced to disclose confidential information in civil suits.

But neither side could be sure how the justices would handle the matter, and they began talks on settling the suit.

The other reporters who were held in contempt were H. Josef Hebert of AP, James Risen of the New York Times, Walter Pincus of the Washington Post and Pierre Thomas, formerly of CNN and now working for ABC News.

CNN did not contribute to the settlement, saying in a statement that it had “a philosophical disagreement over whether it was appropriate to pay money to Wen Ho Lee or anyone else to get out from under a subpoena.”

Brian Sun, the Los Angeles lawyer who represented Lee, said the settlement provides “a measure of vindication and accountability.”

“We believe the settlement will send a message to government officials that they should not engage in unlawful leaks about private citizens,” he said, “and journalists should be sensitive in reporting information that is divulged from officials who have an agenda.”

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Times staff writer Richard B. Schmitt contributed to this report.