Below is a copy of Adam Penenberg's letter of resignation to Forbes' owner, Tim Forbes.
Tim:
As you know, I have been waging a behind-the-scenes battle with your attorney, Tennyson Schad, over a potential subpoena from the Department of Justice. As a result, I am resigning my position as Senior Editor for Forbes Magazine and columnist for Forbes.com, effectively immediately.
When Jim Michaels hired me in September 1998, he told me he wanted me to break big stories, to bring a fresh perspective to Forbes' tech coverage. I'd like to think I kept my end of the bargain. My first story for the magazine caused this whole mess: "We Were Long Gone When He Pulled the Plug" (Nov. 16, 1998), a detailed look at the hackers who took over The New York Times web site in September 1998. Since Forbes issued a press release about the story, I assume the response within 60 Fifth Avenue was positive.
Since I came onboard the magazine I have published a number of pieces that delved into hacking, computer crime and the threat to privacy. In addition to the Times story, I got the first extensive interview with Kevin Mitnick while he was still in prison ("The Demonizing of a Hacker," Apr. 19, 1999 issue), and I broke a story for Forbes.com about e-Bay getting hacked ("Going Once, Going Twice... Hacked!"). I was one of the first (with Betsy Corcoran's assistance) to publish an article on the Melissa Virus, and even got an award from the South Asian Journalists Association (SAJA) out of Columbia University for my Forbes.com story, "Hacking Bhabha"--an inside account of the computer attack on India's biggest nuclear research center. My Nov. 29, 1999 cover story, "The End of Privacy," where I had a detective investigate me, was widely picked up (and copied) in other media.
But I would have never gotten these stories if it weren't for an intricate network of sources I've developed within the hacking community, as well as in law enforcement and computer security.
Last Fall, Tenn Schad informed me that the Department of Justice was threatening to subpoena me over my Times article. Tenn made it quite clear that he was your attorney, not mine, but that Forbes would represent me as well. I told Tenn I would not testify at a grand jury or take the stand at a trial. Tenn sounded irritated, telling me I was being "naive" and "inflexible." Tenn called a second time and told me that DOJ had amended its offer. Government attorneys wanted me to agree to a "pre-arranged compromise," according to Tenn. Now DOJ was saying it wanted me to confirm the facts of my story on the stand, at both a grand jury proceeding and at trial. Tenn added that Forbes wanted to get this over with as quickly as possible. For some reason he seemed in a hurry. He recommended I accept this offer.
I repeated to Tenn that I would not testify, that this was gross breach of journalism ethics. I explained it would ruin my credibility, since I'd never get another scoop if I cooperated with DOJ. How could a source ever trust me again? I also told him this would make Forbes look bad, since we would be caving in to the government. I asked Tenn how many dealings he'd had with the Department of Justice. He was not able to offer any reassurance, and we hung up on a sour note.
At this point I began to consult with criminal defense attorneys. None of them agreed with Tenn. They warned me that no pre-arranged compromise with DOJ would be enforceable on the stand. Once there, if I refused to answer a question, I could be held in contempt and go to jail anyway, and there'd be nothing I could do about it. One appeals lawyer told me his caseload is rife with cases in which the FBI and DOJ had been accused of reneging on pre-arranged deals. In addition, at a grand jury hearing, jurors can ask questions. Neither DOJ nor I would have control over their content.
Since it was clear my interests and Forbes' interests were in conflict, I hired my own lawyer, James Rehnquist of Goodwin, Procter & Hoar in Boston. A major reason I retained him was that he is a former Department of Justice attorney. He agreed that Tenn's strategy was not only detrimental to me, but to Forbes as well. He couldn't understand Tenn's reasoning either.
Tenn is a great libel lawyer, but this is a criminal case. Would you hire a criminal defense attorney to represent you in a civil case? I would hope not. And I would argue you shouldn't hire a civil lawyer to handle a criminal case--and whenever DOJ gets involved, it's a criminal case.
When I was first informed that DOJ might issue a subpoena, Dennis Kneale told me that "Forbes would take this all the way to the Supreme Court if necessary," that this was "an example of sloppy prosecutorial conduct." Bill Baldwin also took pains to reassure me. He said Forbes would back me all the way, and that I should not worry.
I wasn't surprised. Both Dennis and Bill are top-notch journalists; more importantly, they have integrity. They aren't the type to back down from a fight over a First Amendment issue. I can't believe either one of them would be party to a legal strategy that reflects so poorly on Forbes' editorial credibility.
While I waited for the process to drag forward, my attorney sent Forbes a letter asking the magazine to cover my legal expenses. Tenn responded in writing, calling my hiring of a lawyer "a sort of belts and suspenders approach." He refused our request, and went on to criticize me for not adhering to his script.
He wrote: "While one can admire Adam's commitment to his craft, he fails to see that the hackers, in seeking publicity in Forbes, recklessly placed themselves in the DOJ headlights, yet Adam is willing to fall on his sword and risk contempt by not at least admitting that the article was true and accurate."
Tim, for the record, every single word in my story, "We Were Long Gone When He Pulled the Plug," is true. In fact, the story was fully fact-checked by Forbes and edited by the great Jim Michaels. (He did a phenomenal job, too.). Ironically, I might point out, it also passed muster with the Forbes legal department. But, as I have said to Tenn repeatedly, there's a huge difference between confirming that my story is factually correct in every detail, and taking the stand.
Hard-hitting stories can rankle a certain segment of the population. You know that. So why did you hire an investigative reporter if you didn't intend to back him up the first time the Department of Justice calls up?
The real victims here are the great journalists who work for you. They must be thinking, If it could happen to me, if could happen to them. Will they write that hard-hitting expose, or will they pull their punches because they know that, when push comes to shove, they can't trust Forbes to back them to the hilt?
One thing I do apologize for is the tardiness of this resignation e-mail. (Of course, it's fitting that I inform you of my intention to leave Forbes over the Internet, don't you think? We do live in wonderful times.) I was out of town at a wedding and was taken by surprise when the Washington Post story hit on Monday. But I never have been good at getting things in on deadline.
Sincerely,
--Adam
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