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July 15, 1975

Carlo BORDONI, Plaintiff,

Edward Weinfeld, District Judge.

The opinion of the court was delivered by: WEINFELD


This is another of four libel actions commenced by plaintiff based upon articles concerning the affairs of the Franklin National Bank ("Bank"), which refer to plaintiff's relationship to, and resignation as a director of, the Franklin New York Corporation ("Franklin"), the Bank's parent. The defendants in this case are the Washington Post Company, B. C. Bradlee, its Executive Editor, and Jack Egan, the reporter who wrote the alleged libelous articles.

 Reference is made to and familiarity assumed with this court's opinion filed this day in plaintiff's action against the New York Times, *fn1" since the parties agree that New York law is also applicable here. While the substance of the articles in this case parallels that of the New York Times article, the articles differ in language in some respects and must therefore be examined and passed upon independently.

 At issue in this case are two articles published by the Washington Post, one on June 22 and the other on June 26, 1974. Here, as in the New York Times case, plaintiff, without pleading special damages, alleges the articles are libelous per se because they (1) cast aspersions upon him in his calling, and (2) charge that he engaged in criminal conduct. Here, too, as to each publication, four separate claims are advanced. Three, those that charge plaintiff was libelled in his calling as an expert in international monetary and banking affairs, do not rely upon an innuendo; the remaining claim, which charges the articles meant and were understood to mean that he had violated federal laws, relies upon an innuendo. The defendants in the instant case move for judgment on the pleadings on the ground that the complaint fails to state a claim upon which relief can be granted.

 The June 22 Article -- Claims 1 through 4

 The article, headed "Merger Plan For Franklin Far Advanced," begins by stating that efforts are far advanced to merge "financially troubled" Franklin National Bank with another New York bank or with a major English financial institution; that "the major matter that needs to be cleared up is whether the Federal Deposit Insurance Corporation would assume substantial risk for all potential losses that have not yet been uncovered." The article then continues:

"On Thursday, Franklin National, 20th largest in the country, reported it lost $63 million in the first five months of the year, with $45.8 million attributed to foreign exchange speculation, most of it unauthorized, according to the bank."

 The next three paragraphs describe the nature of the contemplated merger, name banks interested in the merger, and state that "[in] order to restore confidence in the bank, any arrangement would entirely remove mysterious Italian financier Michele Sindona -- now Franklins [sic] major shareholder -- from the scene, according to the source." Plaintiff is not mentioned by name until the seventh paragraph, and thereafter in the eighth, ninth and tenth, as follows:

"It was also learned yesterday that Carlo Bordoni, a director of Franklin New York Corp., holding company for the bank, resigned at the board's request on Thursday although this has not been publicly announced.
"Bordoni, a Sindona intimate and involved in multiple business enterprises in Sindona's far-flung financial web, was formerly a foreign exchange trader with an international reputation for the scale of his speculation.
"Bordoni has been credited with organizing Franklin's foreign exchange department when Sindona purchased 22 percent of the bank's stock in 1972 and introducing his own style of high volume foreign exchange speculation.
"Bordoni's exit follows the firing of a foreign exchange trader who [sic] the bank charged with falsifying records and hiding transactions. In addition, the head foreign exchange trader for Franklin and the executive vice-chairman in charge of this area resigned."

 The article then refers to the resignation of the Bank's chairman and chief executive officer in the wake of a financial statement detailing the Bank's losses, discusses merger prospects, and observes that the Federal Reserve Board "is known to be reluctant to approve a situation where Sindona through Fasco [Sindona's personal holding company] would be the holding company in control of the bank."

 We first consider plaintiff's three claims that he has been disparaged in his business calling, as to which no innuendo is relied upon. The opening statement, that plaintiff resigned as a director at the Board's request, by itself carries no imputation of lack of integrity, nor does it cast aspersions upon his professional competence. The article does not suggest that the request was based upon any ...

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