Iran Lawsuit Has Eric Holder Terrified

Just what, exactly, is going on with the advocacy group United Against Nuclear Iran? That's a question U.S. Attorney General Eric Holder doesn't want answered. 
It's covering up. 

Just what, exactly, is going on with the advocacy group United Against Nuclear Iran? That's a question U.S. Attorney General Eric Holder doesn't want answered.

Yesterday the Department of Justice asked a federal district court to dismiss a defamation suit against the group on the ground that a trial might reveal state secrets. How, you ask, could a nongovernmental, nonprofit, nonpartisan organization be in possession of classified information so important that revealing it would materially harm U.S. interests? The government -- big shock -- won't tell you. In the absence of any public justification whatsoever, we're left to parse through the possibilities by speculation -- and to ask whether such a dismissal is compatible with the rule of law.

Begin with United Against itself, an organization confusingly sometimes called American Coalition Against Nuclear Iran, Inc. According to its website, the advocacy group was founded in 2008 by three former diplomats and a retired Central Intelligence Agency director to warn Americans and the rest of the world about the dangers of a nuclear Iran. Its current and former advisory board includes other Americans of similar description, as well as the former heads of Britain's MI-6, Israel's Mossad and Germany's BND. There is also a smattering of academics and policy types. In practice, the organization and its four staff members keep a registry of companies they say are doing business with Iran and seek to pressure them into stopping. Think of it as boycott, divestment and sanctions movement focused on Iran rather than Israel.

Accused of doing business with Iran, most people would probably keep their mouths shut and avoid the publicity. Not so Greek shipping magnate Victor Restis, who is suing UANI in district court, alleging the group defaming him when it sent a letter claiming his companies were "frontmen for the illicit activities of the Iranian regime.” Restis, who also is facing prosecution in Greece for fraud at a failed bank his family controlled, is represented by Washington defense lawyer Abbe Lowell, the go-to guy for tainted government officials.

Something about the defamation suit has made the U.S. government weirdly nervous. First in July, the Justice Department intervened, asking the court to spare United Against from having to reveal its membership lists. The judge called the request “very curious” but granted a temporary stay of discovery in the case. Now the government has gone much further. In a pleading filed with the court, it has asserted its state secrets privilege. It's not just asking for discovery to be halted permanently: it wants the court to shut down the case completely.

As a matter of law, the request by the government to end litigation between private parties is problematic, to say the least. The state secrets privilege is itself a fairly worrisome legal doctrine, under which the government may ask the court to suppress part or all of an ongoing legal proceeding to protect military or state secrets, generally (though not always) classified material. The government makes a private showing to the judge, which need not include all the secrets themselves, but at least is meant to be a guide to where the bodies are buried. Most recently and famously, the Obama Justice Department cited state secrets privilege as one reason to dismiss a lawsuit brought by the father of al-Qaeda spokesman Anwar al-Awlaki.

It's one thing for the government to invoke state secrets when the suit is brought against it or a closely associated entity such as a defense contractor. It is quite another thing for the administration to shut down litigation involving solely private rights between entirely private actors. In all the cases the Justice Department invokes as precedent, at least one of the private parties was a defense contractor intimately intertwined with the government. (My favorite one, the 1985 case of Fitzgerald v. Penthouse, involved a marine biologist who allegedly “made overtures, possibly with CIA and Navy knowledge, to sell dolphin torpedoes or ‘open-ocean weapons systems' to Mexico, Peru, Colombia, Chile, Argentina, and Brazil.”)

If the government can intervene in private lawsuits by telling the judge that some secret might come out, the implications are far-reaching. In particular, it will gain the ability to use a private organization as a secret, unofficial front for its activities, and then hide behind the state secrets doctrine to prevent that fact from becoming public. The government could even defame private individuals through an intermediary, then block the defamed person from defending himself.

United Against Nuclear Iran appears to be a case in point. What state secrets, exactly, could be exposed by a lawsuit charging that the Greek shipping magnate hadn't actually done business with Iran? They might relate to government secrets actually in the possession of the group -- which would mean that the U.S. government was in effect deploying the organization to advance anti-Iran policy. Ordinarily a private organization should not be in possession of classified information unless some authorized government official has provided it.

The state secrets in question might alternatively relate to the financing structure that keeps United Against alive -- which is to say that might show that the organization is literally a government front. It would be problematic to say the least -- and possibly illegal -- for the U.S. government secretly to fund domestic political advocacy. If foreign organizations or governments are funding the group's domestic efforts, that, too creates at the possibility of illegality. Of course the government might be trying to hide something weirder still about United Against. The point is, we have no way of knowing.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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