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U.S., Media Settle With Wen Ho Lee
News Organizations Pay To Keep Sources Secret

By Paul Farhi
Washington Post Staff Writer
Saturday, June 3, 2006; A01

Wen Ho Lee, the U.S. nuclear scientist once identified in news reports as the target of a spying investigation, will receive more than $1.6 million from the federal government and five media organizations, including The Washington Post, to settle allegations that government leaks violated his privacy.

The United States will pay Lee $895,000 to drop his lawsuit, filed in 1999, which alleged that officials in the Clinton administration had disclosed to the news media that he was under investigation for spying for China while working at the Los Alamos National Laboratory in New Mexico.

In addition, the news organizations agreed to pay Lee $750,000. None of the media outlets -- which included The Post, the New York Times, the Los Angeles Times, ABC News and the Associated Press -- had been sued by Lee, and none of their reporting was directly challenged. But all five agreed to the payment out of concern that their reporters would have to give Lee the names of their government sources, as courts had ordered.

"Unfortunately, the journalists in this case . . . reluctantly concluded that the only way they could continue to protect the bond with their sources and sidestep increasing punishment, including possible jail time, was to contribute to the settlement with the government and Wen Ho Lee," said Henry Hoberman, senior vice president of ABC. "It was not a decision that any of the journalists came to easily or happily."

The media's payments, particularly in conjunction with the government's, are "exceptionally" unusual and may well be unprecedented, said Lucy Dalglish, executive director of the Reporters Committee for Freedom of the Press, a nonprofit group that provides legal advice to reporters and media organizations.

Such a settlement, she said, potentially exposes the news media in other Privacy Act lawsuits, such as one brought by Steven J. Hatfill, a federal employee who sued the government after he was identified in news media accounts as "a person of interest" in the 2001 anthrax poisonings. "I'm very troubled by the results," Dalglish said, "but I'm not sure I could have negotiated anything better."

Lee, a naturalized citizen from Taiwan, was fired from his job as a nuclear scientist at Los Alamos, a weapons research facility, in 1999 and held in solitary confinement for nine months. He was released in 2000 without being charged with espionage, although he pleaded guilty to mishandling computer files.

His suit sought the names of the anonymous officials who revealed information about him to reporters, in violation of a federal statute that prohibits the government from releasing protected information from employees' personnel files. Lee's case was strengthened after two federal courts ruled that reporters could be held in contempt if they refused to disclose their sources.

U.S. District Judge Rosemary M. Collyer had threatened stiff sanctions against reporters who refused to name their sources, starting with fines that the reporters would have to pay out of their own pockets.

The reporters were Walter Pincus of The Post, James Risen of the New York Times, Bob Drogin of the Los Angeles Times, H. Josef Hebert of the Associated Press and Pierre Thomas of ABC. Thomas reported on Lee while he was with CNN, but CNN declined to participate in the settlement, saying in a statement that it had "a philosophical disagreement" over the appropriateness of paying a news subject to avert a subpoena.

"It costs money to protect sources," Pincus said yesterday. "It's the only action you could take." He said he felt it was the right decision but added: "It's not a good precedent. It could be a terrible precedent depending on what happens."

Lee's attorney, Betsy Miller, said: "Our aim was never to target or punish journalists. It was to vindicate the injury suffered by Dr. Lee because of the unlawful leak by government officials against him."

The media companies issued a statement that read, in part: "We were reluctant to contribute anything to this settlement, but we sought relief in the courts and found none. Given the rulings of the federal courts in Washington and the absence of a federal shield law, we decided this was the best course to protect our sources and to protect our journalists. 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 the information that we were able to obtain only from confidential sources. We will continue to vigorously fight subpoenas that seek to identify our confidential sources in the future."

The media payments, which were the result of a court-ordered mediation, are the only money Lee will pocket personally. The government payment is conditioned on it being devoted only to his lawyer's fees and the taxes on the media's payments. Government lawyers insisted that the government not pay anything that would be perceived as damages to Lee.

Four of the news organizations paid equal shares of the $750,000 settlement while The Post paid about $10,000 less because it had not exhausted all of its appeals, said one of the parties to the settlement, who spoke on the condition of anonymity because the group issued a joint statement.

Staff writer Charles Lane contributed to this report.

© 2006 The Washington Post Company