Project Veritas loses jury verdict to Democratic consulting firm

FILE PHOTO: FILE PHOTO: Political activist James O'Keefe speaks at CPAC in Washington

By Jonathan Stempel

(Reuters) - A federal jury has found Project Veritas, a conservative group often accused of using deceptive tactics, liable for violating wiretapping laws and misrepresenting itself in an undercover effort to target Democratic political consultants.

Jurors in Washington on Thursday awarded $120,000 to a member of Democracy Partners, co-founded by self-described progressive strategist Robert Creamer.

Democracy Partners claimed it had been infiltrated by a Project Veritas operative who lied about her name and background to obtain an internship during the 2016 presidential campaign, and secretly recorded conversations while working there.

The firm and Creamer said Project Veritas used "heavily edited" footage in videos that falsely suggested they conspired to incite violence at then-Republican candidate Donald Trump's rallies and schemed to promote voter fraud.

According to the complaint, the espionage cost the plaintiffs, who supported Trump's Democratic opponent Hillary Clinton, more than $500,000 of contracts.

Project Veritas said it did nothing wrong and will appeal.

The Mamaroneck, New York-based group has long characterized its work as journalism, and said the verdict threatens the use of hidden cameras by investigative journalists.

"Project Veritas will continue to fight for every journalist's right to news gather, investigate, and expose wrongdoing - regardless of how powerful the investigated party may be," Chief Executive James O'Keefe said in a statement.

Democracy Partners said in a statement it hoped the verdict would "help to discourage Mr. O'Keefe and others from conducting these kind of political spy operations -- and publishing selectively edited, misleading videos."

Media including the New York Times, which Project Veritas is suing for defamation, and Politico earlier reported the verdict.

The $120,000 award was on a fraudulent misrepresentation claim.

U.S. District Judge Paul Friedman, who oversaw the trial, will assess damages based on jurors' separate finding that the operative, Allison Maass, intended to breach a fiduciary duty, according to the verdict form.

Friedman has yet to rule on the defendants' arguments that they should prevail as a matter of law.

"This case implicates fundamental First Amendment issues. The folks on my left prefer to ignore that fact," the defendants' lawyer Paul Calli said in a statement. "We will see what the finish line brings."

The case is Democracy Partners LLC et al v Project Veritas Action Fund et al, U.S. District Court, District of Columbia, No. 17-01047.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)