Is Harry Reid Engaging in Libel by Implication?

Harry Reid has sparked an uproar by suggesting that Mitt Romney paid no taxes. On the floor of the Senate, Reid stated, “The word’s out that he [Romney] hasn’t paid any taxes for 10 years.” Glenn Kessler summarizes Reid’s follow-up on the claim:

He originally told the Huffington Post that a person who had invested with Bain Capital had called his office and told him this. Then, he told reporters in Nevada that “I have had a number of people tell me that.” Reid has refused to identify his source (or sources).

Kessler notes that, “Without seeing Romney’s taxes, we cannot definitively prove Reid incorrect.” He still faults Reid for making the accusation. Others praise Reid because “his allegations are easy to disprove with evidence that Mitt Romney himself has, viz., Romney’s tax returns,” and “every party nominee for 40 years” has been more forthcoming than Romney about their taxes.

The controversy reminded me of an article on “Libel by Implication,” and a decade-old defamation case, Howard v. Antilla. That case concerned a New York Times article, which asked, “Is Robert Howard really [the felon] Howard Finkelstein? A lot of investors in Mr. Howard’s Presstek Inc., would like to know. But not even the Securities and Exchange Commission can say for sure. And the lingering mystery has roiled a hot stock and left the S.E.C. blushing.” The article reported rumors that turned out to be false, though the defendant said it was based on “1500 pages of notes and documents in her investigative file.” A jury found for Antilla on the defamation claim, but awarded Howard $480,000 on a false light claim. The First Circuit eventually vacated the verdict, engaging in some fine distinctions between claims that someone “might be” and “is” some suspect identity:

Since we conclude that a theory of false light recovery based on the article’s implication that Howard “might be” Finkelstein is not properly before us, we decline to address its constitutional viability. We will therefore proceed to analyze Antilla’s remaining arguments in the context of the false light theory that was actually presented to the jury — namely, that Antilla’s article falsely implied that Howard is Finkelstein and thereby placed him in highly offensive false light. . . .

There is no dispute that Antilla included certain facts tending to support the short sellers’ story: Howard Finkelstein was a convicted felon who had, in fact, used the alias “Robert Howard,” see United States v. Finkelstein, 526 F.2d 517 (2d Cir. 1975); the SEC was unable to confirm or deny the rumor; Dr. Howard’s son was reluctant to provide Antilla with certain information; and Finkelstein’s former lawyer stated that he thought a photo of Howard depicted his former client. Yet countervailing facts were also included. At Antilla’s insistence the editors retained the sidebar that discredited some of the supposed proof short sellers had offered in support of their rumor. . . .

Howard’s attempt to build a case of actual malice for implications arising from Antilla’s article must be doomed to fail. As in Medina, Antilla’s article is essentially an account of two sides of an issue in which she merely raises questions concerning the authorities’ treatment of the dispute. And in the same vein as both Saenz and Newton, the evidence before the jury in this case showed, at most, that Antilla should have foreseen the potential interpretation of her article as accusing Howard of being Finkelstein. But only a strained reading of the article itself would yield such an accusation. Thus, we think that Howard failed, as a matter of law, to meet his burden of proving that Antilla intended or knew that the article falsely accused Howard of being a known felon.

The opinion here raises tantalizing questions about Reid’s use of “the word’s out” to preface his statement about Romney. Was it an ablative absolute construction meant to qualify the “paid no taxes” claim by attributing it to an indefinite cloud of rumorers? Or was it a definitive, final statement, as in everyone knows he paid no taxes? And is the whole question moot because of immunity afforded by the Speech and Debate Clause?

Arrow’s paradox of disclosure suggests how difficult a spot Romney is in: he can only conclusively debunk Reid by giving up the information he’s tried so hard to keep secret (unless, perhaps, some legal proceeding could allow a trusted third party to review the returns and report their substance). On the other hand, First Amendment values caution against penalizing someone merely for speculating or offering opinions. In the Cayman Islands, “you can go to jail not only for revealing information but just for asking for it,” according to Nicholas Shaxson’s book, Treasure Islands. The Caymans’ “Confidential Relationships (Preservation) Law” cannot be a model for US discourse on the tax returns of presidential candidates. And I hope this conclusion adequately suggests that, while I have foreseen the potential interpretation of this blog post as accusing Reid of libeling Romney by implication, “only a strained reading of the [blog post] itself would yield such an accusation.”

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