WASHINGTON — Wen Ho Lee, the nuclear scientist once identified in news reports as the target of a government spying investigation, will receive more than $1.6 million from the federal government and five news organizations to settle allegations that government leaks violated his privacy.
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 pursuing a civil suit.
The government will pay Lee $895,000 to drop his lawsuit, filed in 1999, in which he accused the Energy and Justice departments of violating his privacy rights by leaking information that he was being investigated 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 — The Washington Post, The New York Times, 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 already 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," said Henry Hoberman, senior vice president of ABC.
The media's payments, particularly in conjunction with the government's, may be unprecedented, said Lucy Dalglish, executive director of the Reporters Committee for Freedom of the Press, a nonprofit that provides legal advice to reporters and the media. "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 as a nuclear scientist at the Los Alamos laboratory, a weapons-research facility, in 1999, and 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 fired scientist for his treatment at the hands of the government. He pleaded guilty to one count of unlawfully downloading classified information.
In his lawsuit, he sought the names of the anonymous officials who revealed information about him to reporters, in violation of the federal Privacy Act, which prohibits the government from releasing protected information from employees' personnel files.
Lee's case was strengthened after two federal courts held that reporters could be held in contempt if they refused to disclose their sources.
District of Columbia Circuit Court Judge Rosemary Kollyer had threatened stiff sanctions against reporters who refused to name their sources, starting with fines the reporters would have to pay themselves.
The reporters had appealed the contempt rulings to the Supreme Court. The justices recently delayed a decision on whether to take up the reporters' case after being told a settlement was near.
The reporters in the case are Walter Pincus of The Washington Post, James Risen of The New York Times, Bob Drogin of the Los Angeles Times, H. Josef Hebert of AP and Pierre Thomas of ABC. Thomas reported on Lee while he was a reporter for CNN, but CNN declined to participate in the settlement.
"It costs money to protect sources," Pincus said Friday. "It's the only action you could take." He said it was the right decision but added: "It's not a good precedent." Attorneys for Lee said no retractions are required under the terms of the settlement.
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.
The media companies jointly 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. ... [We] decided this was the best course to protect our sources and to protect our journalists."
The media payments are the only money Lee will pocket personally. The government payment is conditioned on it being devoted only to lawyers' fees and the taxes on the media payments. Government lawyers insisted the government not pay anything that would be perceived as damages to Lee.
Material from Bloomberg News is included in this report.