Palau newspaper faces defamation charges over leaked tax return · Global Voices

Palauan newspaper Island Times has been sued for “negligence and defamation” after sharing on social media leaked tax documents from Surangel and Sons, a company owned by the father of the country’s president. Pacific and global media groups warn that the lawsuit is an attempt to silence Palauan media that “endangers public trust in the media and the transparency of the private sector.”

Palau is a Micronesian state with around 18,000 inhabitants.

Surangel and Sons, the country's largest private employer with diversified business activities, insisted that the newspaper publish an article containing disinformation. “The lawsuit stems from an article published by Island Times that contained false and unsubstantiated allegations against the company.”

Based on tax records, Island Times editor Leilani Reklai claimed that Surangel and Sons reported gross sales of over $70 million in 2023 and claimed deductible expenses of over $67 million, resulting in just $300,000 dollars in corporate profit taxes. In its reporting on the issue, Island Times noted that President Surangel Whipps Jr. has repeatedly emphasized that Palauan companies pay a higher share of taxes.

The company is seeking punitive and compensatory damages. In a statement, Surangel and Sons said that “the cash rewards should be substantial enough to prevent similar behavior by the newspaper and Reklai in the future.”

Facing the pressure, Reklai has insisted she will not resign. She stressed the need to face the charges because of the devastating impact on the media sector.

I feel like the lawsuit is trying to control how the media tells a story here in Palau. I feel like we are intimidated because we are forced to represent a certain narrative instead of representing different perspectives of the community.

If I don't stand up to this, it will be a signal to all journalists here that they will have to reckon with claims for damages from powerful companies and government representatives when carrying out their work.

The Palau Media Council noted that the newspaper reported on issues that were already in the public domain.

This lawsuit raises critical concerns about citizens' access to information and freedom of the press – both cornerstones of a democratic society.

The Council views this legal action as an attack on press freedom and an attempt to undermine the accountability vital to democracy.

It did not produce the information itself but responsibly conveyed what those documents suggested, which has raised questions about the current government's narrative on corporate tax contributions.

Reporting such information is a journalistic duty to ensure transparency in tax policies and government incentives that impact the private sector.

The Pacific Freedom Forum made similar comments about the role of journalists in obtaining, investigating and disseminating official documents and called on Palauan authorities to reform their restrictive media defamation laws. “Many governments have decriminalized these outdated laws because of the censorship and fear they represent.”

The Pacific Islands News Association also released a statement expressing concern about the defamation lawsuit.

Democracy thrives when people are sufficiently informed to form independent opinions about their lives. For this we need strong, independent media. We urge the government and business community in Palau to recognize the media as defenders of democracy and not to suppress them in reporting on important national issues.

However, Surangel and Sons claimed that “unauthorized disclosure of sensitive business information not only violates our privacy rights, but could also potentially harm our competitive position in the marketplace.” The company added that by publishing the article, the Island Times “is harming the employment of hundreds Palauan workers at risk” and announced that it would stop selling the newspaper in its retail stores.

Pacific media watchdogs were also accused of appearing to bias the case.

This approach undermines ethical journalism and threatens the privacy rights of companies in Palau. These organizations appear to have willingly sided with The Islands Times without conducting independent investigations, such as examining the lawsuit we filed.

Palau's finance minister said the leaked tax document contained false and altered information.

I would like to see the media make additional efforts to help educate the public and prevent misinformation and privacy violations of the IRS and other government entities.

In 2023, Palau was among the countries that topped the Pacific Islands Media Freedom Index.