Is it libel if it's never printed?

On Nov. 7, 1837, as midnight approached, an angry mob gathered in this old steamboat town that slouches on the banks of the Mississippi. Within minutes the crowd had laid siege to the warehouse where the Rev. Elijah Parish Lovejoy was hiding the new printing press he had surreptitiously shipped upriver from St. Louis the previous night.

Lovejoy, an abolitionist editor and evangelist in journalism, had been forced out of St. Louis the year before when he called Judge Luke Lawless an "Irish papist" for not prosecuting a mob that had lynched a local black cook. Over a period of 16 months, mobs had destroyed three of Lovejoy's presses and tried to tar and feather him in hopes of putting an end to the "incendiary publications" in his uncompromising antislavery journal, the Alton Observer.

This particular night the mob came armed. A gun battle broke out, someone set fire to the warehouse roof, and when Lovejoy ran out to extinguish it, he was killed by a blast from a double-barreled shotgun. The press, smashed to smithereens, was dumped in the river.

Lovejoy became abolitionism's first martyr, and his death, coupled with the publication of Harriet Beecher Stowe's "Uncle Tom's Cabin," was an early wind that fanned the spark that became the Civil War. Today, however, Lovejoy is remembered primarily as the first United States newspaperman to die defending the freedom of the press. The Alton Telegraph, which covered the Lovejoy murder in 1837, and today displays in its lobby a fragment of the ransacked handpress, is now fighting for its life in a libel case which it claims raises the same issues Lovejoy died for. "If we buckled up and rolled over, we'd be giving up the Lovejoy tradition. Somebody has to stand up and fight," says the Telegraph's editor, Steve Cousley, whose family has owned the newspaper for the last 92 years.

The fight involves an order last June by an Illinois jury that the 145 -year-old newspaper pay $9.2 million -- twice the paper's estimated worth -- to James Green, a southern Illinois builder, for damages caused by an allegedly libelous memorandum which two Telegraph reporters sent to a federal investigator. The jury ruled that the memo falsely accused Green of ties to the Mafia, and that when these rumors leaked out, Green's bank cut off his credit, ruining his multimillion-dollar construction company.

The reporters testified in court that they sent the "confidential memorandum" to the Justice Department in 1969 in hopes of verifying information on possible criminal activity in the Alton area. The reporters were unable to confirm the accusations of Green's ties to the mob, and the Telegraph never printed the story.

The Telegraph, serving a readership of 38,000 is one of the oldest family-owned newspapers in the nation. The case, one of the largest libel verdicts in Us history, nevetheless has been overshadowed by highly publicized cases such as the $1.6 million award to comedienne Carol Burnett and the $26.5 million (later reduced in half) judgment against Penthouse magazine for a piece of fiction it published. Free-press advocates appear more alarmed, however, by what they see as a dangerous legal precedent being set in the Telegraph case, namely: A newspaper may be forced to close its doors because of a story it never printed.

"The Carol Burnett versus the [National] Enquirer case got enormous publicity and people feel the Enquirer got what it deserved for attacking a nice lady," says Sharon Mohoney, a staff attorney for the Reporters Committee for Freedom of the Press in Washington, D.C. "That case was a battle of titans. But it's the libel suit with a small paper like the Alton Telegraph that is more likely to occur, and the fact is, it occurs in silence to the rest of the world. . . ."

"The First Amendment was meant to protect the little guy. The guy who, maybe , everybody in town disagrees with, still has a right to say it anyway." Paul Findley, a former newspaperman who has represented the Alton area as its Republican congressman for the last two decades, is championing the Telegraph's cause. In April he sent letters of 30 of the nationhs leading editors and publishers urging the establishment of a national defense committee to bail out the Telegraph, which has already spent $180,000 in legal fees. (Findley is part owner of two small-town weeklies, the Pike Press in Pittsfield, Ill., and the Virginia Gazette in Virginia, Ill. His son, Craig, an Illiois state representative, is editor and part-owner of the Gazette.)

Findley recently wrote in his weekly newspaper column distributed to the news media in his district: "I've been a newspaperman since my teens and this case infuriates me. The idea that a newspaper can be sued and possibly driven out of business because of something it didn't print is absurd. The size of the judgment defies all rational explanation."

Findley told the Monitor: "In my day I would feel duty-bound to present whatever scuttlebutt I picked up. The reporters weren't trying to hang anybody. They were just trying to cooperate. If this becomes precedent, then every citizen, especially reporters, is in trouble. They will be reluctant to keep notes and supply leads to law enforcement officials. [The verdict] threatens the very right and obligation of newspapers to gather and disseminate information. The burden shouldn't be borne just by the Alton Telegraph. Every newspaper in the country should chip in and help."

In order to continue publication and protect its assets from seizure while appealing the verdict in state court, the newspaper filed for bankruptcy in April. Under Chapter 11 of the new United States Bankruptcy Act, it has 120 days to devise a plan for reorganization and payment of its debts. Says Steve Cousley: "I've been here since I was 16 yeas old, and the thought of somebody seizing our equipment and selling it at a sheriff's sale is pretty upsetting."

Paul Cousley, Steve's older cousin, has been publisher of the Telegraph for 18 years. His grandfather, John A. Cousley, came from Ireland during a potato famine in the 1840s, worked as a printer on the Telegraph, and eventually bought the newspaper. Paul, who says he has worked on the Telegraph "since I was in rompers," carries a disheveled professorial look about him. He arrives in the news room each day in a rumpled suit that appears to sprout ball point pens from its breast pocket.

Paul Cousley's office oozes with history. Behind his desk is an original gilt-framed portrait of Abraham Lincoln painted during his Illinois senatorial campaign. Nearby are pictures of the newspaper's seven previous publishers and a photograph of the Telegraph's entire staff -- nine employees -- in 1895.

Cousley likes to lean back in his desk chair and tell turn-of-the-century tales about the days when Alton had four newspapers, or the time when the Telegraph was a "dry newspaper" -- refusing to take liquor advertisements -- and had to run an evangelical series to boost its circulation when the local saloons boycotted the newspaper. (According to Steve, the Telegraph still treats "religions as hard news as well as soft news" and has one of the strongest church editorial sections in the country.

Alton, once the most properous town in Illinois, sits two miles upstream from the confluence of the Missouri River and the Mississippi, where barges of wheat, soybeans, and coal from America's heartland are double- and triple-parked on the banks. They are waiting to pass through Alton Lock and Dam No. 26 on their way to New Orleans.

Alton is in the northern portion of Madison County, which along with neighboring St. Clair County, is an industrial suburb of St. Louis. This is blue-collar country, where laborers stick to the union and the shenanigans and influence of the ward-heeling Democratic machine are rivaled only by Chicago's Cook County a la Richard Daley.

"In Madison County, the county employees tithe 1 1/2 percent of their salaries to the state Democratic Central Committee and they're proud of it," says Don Weber, an outspoken maverick Republican who last fall was elected Madison County state's attorney in the wake of Ronald Reagan's national landslide. "County taxpayers are actually subsidizing the Democrats." While tithing is said to be "voluntary", many county employees believe they risk their jobs if they don't do it.

Weber is the third Republican to be elected to a Madison County office in the last 33 years. He says, "If you wanted to be a state attorney, circuit judge, sheriff, county clerk, you pay the Democratic Central Committee $10 to 15,000 to be slated, and with their blessing you win. Recently a few independents challenged the machine and won. I was one of them."

Attorneys like Weber say the judges and blue-collar juries in Madison and St. Clair traditionally are plaintiff-oriented. Consequently, the counties have traditionally attracted lawyers looking to win lucrative personal injury suits. "Madison County is a very popular venue," Weber says. "Attorneys will do whatever they can have their cases tried here. The two counties have a big pool of laborers, with all the steel companies, barge lines, and railroads that come through here. So the juries are much more likely to be sympathetic to the plaintiff than the big companies."

Rex Carr, the East St. Louis attorney who won the $9.2 million verdict against the Telegraph, is one of the most successful plaintiff lawyers in the country. He is also one of four lawyers in St. Clair and Madison counties who belong to the Inner Circle of Advocates, an exclusive 100-member national legal fraternity, whose minimum qualifications include having won at least one verdict exceeding $1 million. Says Carr: "Madison and St. Clair counties happen to be good places to try a case because we've got some good lawyers here and they're not afraid to go to court. Also, this is not a silk-stocking sort of place, and you get a good cross section [on the juries]."

Telegraph editor Steve Cousley suspects the libel suit may be a thinly disguised political vendetta against the newspaper, which has long been a thorn in the side of the Democratic machine. "It appears to be an effort by the local political machine to put us out of business," he says. "We've done a pretty hard-nosed job of reporting on officialdom in the county, digging into things over the years that need digging into. We consider all our reporters to be investigative reporters, and a newspaper that is doing its job will put a spotlight on political officials and judges. Over the years we've made a lot of enemies."

It was the Telegraph's investigative reporting that got it into trouble and eventually led to the costly libel suit. In the late '60s, the Justice Department sent a strike force to East St. Louis to investigate alleged labor racketeering. Brian Conboy, the federal attorney heading the project, asked for cooperation from the press in providing leads on local gangsters. Two Telegraph reporters, Joseph Melosi and William Lhotka, had spent several months prospecting for stories on organized crime in the area and they met with Conboy. He then asked the reporters to put their information in writing.

In March 1969, they sent Conboy a memorandum sketching out rumors of financial misdeeds by builder James Green and his bank, Piasa Federal. The memo was based on tips offered them by a former Madison County sheriff and the sheriff's chief deputy. The reporters' intention in sending the memo was, they later testified in court, to confirm tips for future news stories. The memo, introduced in court as evidence, said in part, "a criminal conglomerate appears to be flourishing unchecked in Madison County." "No one has been able to put all the pieces together. But we may be able to, with your help."

The reporters' correspondence with Conboy stated that someone named Don Hazel , "reportedly the No. 2 crime boss in the county, is connected with James Green Construction Co., a multi-million dollar operation." It further said that Hazel was "a silent partner on some of Green's biggest apartment projects." The communique stated that "big money from the Mafia -- rackets money -- backs all HazelGreen deals" and that Piasa was laundering mob money and giving illegal pledge deals which have "all the earmarks of a kick back from Piasa to favored contractors, like Green."

The Justice Department finally decided not to investigate Green, but Conboy's successor turned the reporters' memo over to the Federal Home Loan Bank Board, which then ordered an inquiry into Piasa. The federal investigators turned up no evidence of Green's connections with the Mafia, but did discover what Telegraph attorney William Cox described as "numerous regulatory violations" and "loose lending practices" in the savings and loan's dealings with Green.

Subsequently, Green's credit was terminated, his construction business faltered, and it finally collapsed in 1972. Robert DeGrand, a former vice-president of Piasa Savings and Loan, testified that Melosi gave him a copy of the memo in February 1974, and DeGrand in turn showed it to Green, who then sued. Melosi told the court he showed DeGrand a copy of the memo but never gave it to him. In the libel suit, Green charged that false accusations in the reporters' correspondence with Conboy at the Justice Department specifically precipitated the failure of his business.

In court, the newspaper argued that the memo to Conboy was confidential -- therefore "privileged" -- and not intended for federal bank investigators. Philip Tone, the Chicago attorney for the Telegraph, argued in the post-trial motion last November that Green's case had not proved, as required by Illinois law, that the reporters were able to foresee the possibility that their memo would have been passed by the Justice Department to other federal agencies, which in turn precipitated the loss of Green's credit. Tone contended that neither the reporters nor the newspaper should be responsible for the Justice Department's "republication" of the memo's contents, since the memo had been marked confidential.

According to Bob Stevenson, a Justice Department spokesman in Washington, the department recently instituted new procedures regarding the relationship between Justice and the news media to eliminate the "cloudiness of who's doing what to whom," which arose in cases like the Alton Telegraph. "Now, if a reporter voluntarily comes in and says, 'Here's my information,'" says Steveson, "then the JD has the right to use it as it sees fit. If the Justice Department wants information from a newspaper, and the paper doesn't want to turn it over, or wants a formal record [of the request], the Justice Department must subpoena [ the material] and the attorney general has to approve the subpoena." The reporter or news organization has no control over how the information is used or to what agencies ti may be sent, "unless the reporter cuts a deal with an individual [at the Justice Department] who gives his word," says Stevenson.

In court, the Telegraph also argued that Green's loans from Piasa were stopped, not because of the memo, but because the bank had extended him more credit than was permitted by federal banking regulations. Blaming the reporters' three-page memo to Conboy for the collapse of Green's business is, Steve Cousley said, like "claiming we brought down a 707 with a BB gun."

Carr disagrees. "The sworn testimony in court is that JimGreen's credit was cut off when the [federal bank] investigator disseminated the story that he [ Green] was with the Mafia. The board of directors of Piasa, without waiting for the investigation report which exonerated him [Green], cut off his credit."

At the end of the five-week trial, the jury returned a verdict after deliberating for only five hours. It awarded Green $6.7 million for personal losses and $2.5 million in punitive damages against the newspaper. Jurors said after the trial they did not consider First Amendment issues of press freedom, but deliberated primarily over how much to compensate Green for his losses.

"This case has about as much to do with freedom of the press as with a judgment against the Telegraph based upon injuries suffered by a pedestrian struck by a Telegraph delivery truck," Carr says. "Melosi and Lhotka, with the blessing of their superiors, sent to the Justice Department charges arguing that a reputable businessman in Madison County was in with the Mafia. They didn't bother to check the facts. It's the duty of any citizen not to pass along or repeat lies about another citizen. Now these reporters want to hide behind a smoke screen of freedom of the press," says Carr, who argued that the fact that Melosi and Lhotka worked for a newspaper was "irrelevant" in this case.

He further sees no reason why the judgment against the Telegraph would deter citizens in reporting suspected crimes. "Every citizen is protected if he reports suspicions to the police for the purpose of having someone arrested. But if he reports suspicions he knows are false or reports them for his own purposes, he is not protected.

"If you believe that someone is beating his wife and you go to police headquarters and say, 'John jones is beating his wife,' for the purpose of having him arrested, that is privileged [communication]. If you report the same set of facts for the purpose of getting a story or for the purpose of picking the apples from his tree after he gets arrested and taken away, then it's not privileged. It's the recklessness of conduct that abuses the privilege."

The Alton Telegraph might have gotten off the hook, Carr says, if the reporters could have proved they had reason to believe that the charges against Green in their memo were true. The reporters, however, did not attempt to verify the information, he says, but simply "stated as fact and passed it along as fact. They didn't come out and say this is what we heard from a deputy sheriff in the basement of the court- house." Freedom of the press, Carr adds, "does not give reporters the license to tell lies in the course of an investigation."

Melosi says, "I thought the information was on the level. I thought it was fact." He claims that the substance of the memo had been supplied by a former Madison County sheriff, the chief investigator in the sheriff's office, and the chief prosecution attorney for the state attorney's office. "These guys were credible sources. They had been involved in investigating criminal activity in Madison County for years. I though they had informants among the local hoods," Melosi says.

"Rex Carr charges we made the whole thing up and we were being lazy reporters ," says Melosi, who left the Telegraph staff in 1978 and now produces a weekly half-hour television program dealing with financial news. "We went as far as we could, and sent the memo off because it was virtually impossible for us to check veracity of the information. We wanted people with more resources to check the charges because the charges were pretty severe."

In general, attorneys say it is difficult to prove libel in a courtroom. Suits are often filed against publications simply as a scare tactic by plaintiffs with no intention of carrying the case to court. Proving specific damages to the plaintiff is frequently impossible.

Once, however, a liber case goes to court -- and in recent years more judges have been denying "summary judgments" and sending cases on to courtroom trials by juries -- the plaintiff stands a better-than-even chance of winning.

Statistics show, Sharon Mohoney of the Reporters Committee says, that only 19 percent of all libel cases actually reach a jury but that more than half of those will result in a verdict for the plaintiff. "If you're the defendant, the game is to avoid the jury, which usually sees only the victim and doesn't look at the law," she says. She says that the judge in the Telegraph case should have ruled the memo to be a "privileged" communication and never sent the case to trial.

One might expect that a 1-in-5 success rate would discourage libel suits, but apparently the trend is just the opposite. A growing distrust of the media and "everybody talking about the litigious society," she says, has meant that more people are filing suits when they feel wronged. Ironically, what the press once thought of as its fines hour, coverage of Watergate, is backfiring. She says, "Some juries and judges feel uncomfortable with a press that has the power to topple a president, even if the story was true."

As far as libel goes, the future does not look rosy for reporters and their news organizations. Recently, F. Dennis Hale, an associate professor of journalism at Bowling Green State University in Ohio, surveyed 86 lawyers who had appealed libel judgments in 24 states over the last four years. Sixty-seven percent believed that the Supreme Court would weaken the protection against libel suits over the next decade. Fifty-seven percent felt the press had become more cautious as a result. The majority of the lawyers questioned, however, believed the press still enjoys more freedom than prior to the 1964 landmark Supreme Court decision New York Times v. Sullivan, which held that, with public officials and figures, the plaintiff must prove actual malice on the part of the publications to win a libel judgment.

On a hill overlooking the Mississippi and downtown alton stands a 93-foot Barre granite monument to the town's press martyr, Elijah Parish Lovejoy. Steve Cousley enjoys escorting visiting reporters on a brief pilgrimage to the monument and Lovejoy's grave site. "In those days, when people didn't like what you were saying they would run you out of town," he says, passing in the shadow of the four-ton bronze Winged Victory on top of the towering stone column.

"Lovejoy made his stand in Alton. It's that tradition of press freedom that the Telegraph is making its stand for. We're here to fight. We're going to come out of this predicament and keep the presses rolling."