CHICAGO (CBS.MW) -- In a case with implications for investigative journalism in the Internet
   age, a Canadian mining company has successfully used British libel law to shut down part of a
   U.S.-based Web site.

   The case, which pits Barrick Gold, Barrick Goldstrike Mines and their chairman, Peter
   Munk, against Guardian Newspapers Ltd., was settled Tuesday with Barrick and
   Munk winning an apology and monetary damages from the Guardian -- as well as
   the deletion of a story from a U.S.-based Web site.

   At issue was a piece written by American Greg Palast, a freelance reporter, regular
   columnist for the Guardian's Sunday Observer and occasional contributor to the
   BBC's flagship nightly television news program.

   "The Best Democracy Money Can Buy," which appeared on Nov. 26 of last year,
   focused on large corporate and individual donations to the Republican Party and the
   presidential campaign of George W. Bush.

   In it, Palast wrote about a $148,000 contribution made by Barrick (ABX: news,
   chart, profile) to the GOP; allegations about Munk's having helped Iran-contra
   figure and Saudi arms dealer Adnan Khashoggi win a pardon from then-President
   George H.W. Bush;  Barrick's 1992 takeover of U.S. government property estimated
   to contain $10 billion in gold for $10,000; and George H.W. Bush's job on Barrick's
   payroll in which the ex-president supposedly interceded with two Third World dictators
   on the company's behalf.

   The part that upset Barrick the most, however, was Palast's reference to allegations made by Amnesty
   International and reports by Tanzanian newspapers that a company subsidiary in the East African
   nation carried out the "extrajudicial killings" of 50 independent miners by burying them alive when they
   refused to vacate a company concession.

   Barrick flatly denies any culpability in the Tanzania murders (and in fact did not own the subsidiary at
   the time of the alleged massacre) and maintains that it was in total accordance with all applicable U.S.
   laws regarding both its campaign contributions and takeover of the Nevada property.

   Suit filed in London

   The company sued for libel in plaintiff-friendly Great Britain earlier this year, charging that the article
   caused it and Munk "great embarrassment and distress" and that their reputations were "extremely
   seriously damaged" as a result. The company asked for monetary damages and an injunction to prevent
   any further dissemination of the article by the Guardian, "its directors, employees, agents or otherwise ..."

   In settlement papers in the High Court of Justice in London, the Guardian stated that there was no
   "intention to make any allegations of corruption or illegality in relationship between President Bush" and
   Barrick; that Barrick was not involved in the alleged deaths of miners in Tanzania; and that Barrick
   acted in accordance with U.S. law in the Nevada mine takeover and in its political contributions.

   The Guardian also offered "sincere apologies ... for any offence caused"; agreed to pay "a substantial
   sum" in damages and legal fees; and said it has deleted the article from its own electronic archives.

   Barrick said in the filing it is satisfied that the "vindication of their reputation ... has been achieved" and
   that it will not pursue the litigation further.

   Spokesman Vince Borg reiterated that the newspaper "has acknowledged [the story] was libelous" and
   said that the company will donate the damages to a "worthy cause."

   Palast, who repeatedly offered to correct or clarify the story if Barrick could prove its falsity, maintains
   an electronic archive of his work on his U.S.-based Web site, www.GregPalast.com. As a result of the
   settlement, he has essentially been forced to delete all references to Barrick in his online story, since
   keeping it up could expose the Guardian to additional aggravated damages.

   "I am not at war with Barrick," Palast told CBS.MarketWatch.com. "I just would like the truth to come
   out. But I can't risk my paper's treasury with U.S. publication.

   "What is sad is the use of British libel laws to ride on the electrons across the Atlantic to shut down a
   U.S. electronic publication," he added.

   U.S. expert weighs in

   It is also troubling to some U.S. First Amendment experts.

   Floyd Abrams is a partner at Cahill Gordon & Reindel and an attorney who won the Pentagon papers
   case for The New York Times. The celebrated press-freedom attorney pointed out that U.S. publications
   routinely delete or alter stories in foreign editions for fear of running afoul of local libel laws.

   "U.S. law provides many more additional protections than exist or ever existed in the United Kingdom,"
   he said. Unlike in the United States, where plaintiffs typically have to show not only that a story is false
   but that it was published with the knowledge that it was false, in England "the person who brings the
   suit doesn't have to prove anything" and the burden of proof is on the defendant.

   While U.S. courts have in the past refused to enforce British libel judgments, the U.S. impact of the
   settlement "is certainly something to keep an eye on, and it should worry people," Abrams added.

   Another major difference between U.S. and British law is that "truth is not an absolute defense" in the
   United Kingdom, said Sandy Davidson, a professor of communications law in the University of
   Missouri's journalism and law schools. In other words, a story can be correct in all of its facts, but if a
   court finds it to be defamatory, the defendant can be held liable.

   Davidson noted that foreign entities in the past have had some success at getting U.S. Internet service
   providers to voluntarily shut down U.S.-based Web sites.

   But, she added, any "court-mandated shutdown would run directly into problems of transnational
   jurisdiction" and the question "of what kind of power a U.K. court might or might not have over a U.S.
   citizen."

   Story still available

   Palast's original story has been widely reproduced both in the United States and overseas. The full,
   uncut version remains online on numerous U.S. Web sites including www.onlinejournal.com. If Barrick
   wants to get it pulled from those sites, it will have to do so through far-less-sympathetic U.S. courts.

   As far as Online Journal is concerned, the piece isn't going anywhere.

   "Unless it will cost Greg his livelihood, you may assume the article will stay," said editor/publisher Bev
   Conover. "As tattered as it has become, this is still America and we still do have First Amendment
   rights. Someone has to stand up to the bullies."

   Borg said the issue of whether Barrick will go after media outlets continuing to run Palast's story "or any
   other libelous statements" is "a speculative question; we haven't decided that at this time."

   And as to why the company sued only in Britain, Borg said, "the article was filed there, the Observer
   [the Guardian-owned Sunday paper in which Palast's work was published] is based there, and that was
   where the jurisdiction was determined to be. It doesn't come down to a question of libel law in one
   jurisdiction, it comes down to a question of truth or libel."

   In terms of market cap, Barrick is the world's most valuable gold-mining company. It trades in Toronto,
   New York, London, Paris and Switzerland. The company will jump from No. 4 to No. 2 in production
   levels if its recently announced acquisition of Homestake Mining (HM: news, chart, profile) goes
   through, as expected, in the fourth quarter of this year.

   On Wednesday, Barrick shares closed down 13 cents to $14.76.