(CN) - The American Israel Public Affairs Committee did not defame its former long-time foreign policy director by criticizing his behavior amid a federal investigation, the D.C. Court of Appeals ruled.
AIPAC had suspended Rosen and another employee, Keith Weissman, in 2005 after learning that they were embroiled in an FBI investigation involving Pentagon official Lawrence Franklin, who later pleaded guilty to passing the men classified information.
While Franklin was cooperating with investigators in 2004, he fed bogus information on Iran to Rosen and Weissman, who then passed it on to Washington Post reporter Glenn Kessler in a wiretapped telephone conversation.
A few weeks after the powerful Washington-based pro-Israel lobby suspended Rosen, its outside counsel, Nathan Lewin, received limited security clearance to listen to the tape.
After hearing the evidence, which included Rosen reassuring Kessler that the U.S. had no Official Secrets Act, Lewin urged AIPAC to terminate Rosen after 23 years on the job.
With Rosen fired on March 21, 2005, AIPAC spokesman Patrick Dorton explained to The New York Times that Rosen's behavior "did not comport with standards that AIPAC expects from its employees."
Rosen was indicted for espionage in August of that year, but prosecutors dropped the charges in May 2009. Lewin later said he thought Rosen had committed no crime.
Rosen sued the organization for defamation, but D.C. Superior Court Judge Erik Christian dismissed
Rosen's claim on summary judgment last year, saying AIPAC's statement is "not provably false."
proved unsuccessful Thursday with the court explaining that the word "standards ... could have meant many things, none self-evident, and certainly none specifically directed at 'receiving or handling classified information.'"
At oral arguments in February, however, Rosen's attorney David Shapiro told the three-judge panel that "AIPAC had no standards."
The judges asked, "Written standards?"
Shapiro replied, "Any standards!"
As evidence, the Swick and Shapiro attorney discussed how an AIPAC in-house lobbyist once claimed to have been unaware that information she had in her possession was classified, though the subsequently released documents showed the word "classified" stamped on every page.
Rosen says AIPAC fired him, despite spending more than $4 million on his defense, to abide by the Justice Department's so-called Thompson Memorandum
on corporate fraud.
On Jan. 20, 2003, Deputy Attorney General Larry Thompson wrote that a corporation can avoid prosecution for a worker's misdeeds by firing the employee and publicly condemning his behavior. The corporation would also have to cease paying legal costs and deny substantial severance payments.
Shapiro told the appellate judges that AIPAC fired Rosen and invoked "standards" "to get the DOJ off AIPAC's back." But AIPAC had in fact "lauded" Rosen "for the same behavior in the past," Shapiro said.
In an amicus brief, the Washington, D.C.-based Institute for Research: Middle Eastern Policy argued that "AIPAC's observable standard for employees is 'solicit, obtain and leverage classified information without being criminally indicted.'"
AIPAC had acknowledged a lack of written standards, according to the appeals court. But its deputy executive director, Richard Lee Fishman, testified that there was an unwritten, "assumed standard that people would obey the law ... with regard to classified information or any other illegal activity."
AIPAC Executive Director Howard Kohr also "identified two [unwritten] standards -adherence to 'counsel's advice' and communication with 'total candor,'" the 23-page decision states.
As a result of Rosen's indictment, AIPAC knew more about him than it had in 2005, the appellate panel found.
One example includes Rosen failing to heed the request of AIPAC general counsel to "convene in the office with him" after getting into a verbal altercation with FBI agents at an August 2004 visit to his home, according to the decision, quoting Rosen.
Instead Rosen arranged first to meet in a local restaurant with Rafi Barak of the Israeli Embassy to warn him of an unfolding espionage crisis, thereby giving embassy staff time to flee the U.S., according to an AIPAC brief summarized in the Washington Report on Middle East Affairs.
AIPAC also learned that Rosen had not been totally candid about his relationship with Franklin, the Pentagon official.
"As we have seen by quoting Rosen's responses to questions at his deposition, he either confirmed or failed to dispute the testimony that two high-ranking AIPAC officials, Richard Lee Fishman and Howard Kohr, gave to establish that AIPAC's' standards' for employee conduct were unwritten, capable of multiple, unspecified meanings, and thus - especially because they were identified only by one general, collective word - were not 'provably false,'" Senior Judge John Ferren wrote for the court.