A federal judge has dismissed a libel case against a homosexual who claimed Barack Obama's 2008 campaign paid to rig a polygraph test regarding his sensational charge that he had sex and used drugs with the future president.

Larry Sinclair – who claims he twice engaged in sexual activity and used cocaine with Obama in 1999 when Obama was an Illinois state senator – was accused by Internet publisher Daniel Parisi of making false and damaging statements that led to the demise of Parisi's porn website, Whitehouse.com, in 2008.

The alleged defamation did not center on Sinclair's charges of sex and drugs with Obama but on Sinclair's claim in his 2009 book that the Obama campaign and top adviser David Axelrod had agreed to pay Parisi $750,000 to rig the results of a polygraph test.

Parisi failed to present any evidence that Sinclair's claim about Axelrod and the Obama campaign was false, wrote U.S. District Court Judge Richard J. Leon in his Feb. 28 opinion dismissing the case.

Parisi filed March 30 jointly with Sinclair a "Stipulation and Order of Voluntary Dismissal," which effectively ended Parisi's claims against Sinclair and Sinclair Publishing.

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Sinclair recounted in his book, "Barack Obama & Larry Sinclair: Cocaine, Sex, Lies & Murder," Parisi's offer to pay him $10,000 to take a polygraph test regarding his charge that he engaged in sexual acts with Obama in Chicago.

In the deal, Parisi would pay $100,000 if the polygraph showed Sinclair was telling the truth. In a modified agreement, Sinclair was paid $20,000 to take the test. He failed it, according to an examiner's report, and two other examiners corroborated the result, the judge's opinion said.

Parisi alleges Sinclair made defamatory statements in the book, including his assertion that "the polygraph was rigged and was arranged by Dan Parisi and Obama Campaign advisor David Axelrod."

The judge, however, said Parisi failed to show Sinclair had published any knowingly false statements and concluded that he had taken appropriate steps to verify the information before publishing it.

Citing precedent, the judge argued that when the victim of the alleged defamation is a public figure, like Parisi, the statement in question must amount to more than negligence. The statement must be made with actual malice, he wrote, with knowledge that it was false or with reckless disregard as to whether it or not it was true.

Furthermore, Parisi couldn't support his claim that Sinclair' statement was false, the judge said.

"The complaint contains no factual allegations, other than the plaintiffs own assertions that the statements were false," Leon wrote.

Sinclair's source of his allegation against Parisi and the Obama campaign was an anonymous phone call, but he tried to confirm the information with Parisi, who refused to respond, Leon states in his opinion. Also, a Chicago Tribune reporter contacted the tipster and affirmed Sinclair's statement, the judge said.

Along with Sinclair and Sinclair Publishing, Parisi had sued radio talk show-host and Internet author Jeffrey Rense, who wrote the forward to Sinclair's book; booksellers Books-A-Million and Barnes & Noble; book distributor Ingram Content Group; and Internet retail giant Amazon.com.

Parisi still plans to appeal Leon's dismissal of the case against Amazon.com, now the only remaining defendant.

Parisi's suit effectively stopped the hardcover printing of Sinclair's books, with used copies selling for as much $600 on Amazon.com. While defending himself in court, Sinclair was able to sell a paperback edition of the book on his website, LarrySinclair.net.

Sinclair told WND in a telephone interview that he stands by the claims in his book.

"I still believe all the charges I have made are true, and I have seen nothing to date that would change my beliefs," he said.

He also continues to stand by his primary charge against Obama.

"I know from personal experience that Obama lied when he said he had given up drugs in college, and I can attest in detail to the fact Obama engages in homosexual sex," Sinclair said.

In addition, Sinclair says he believes that the murder of Donald Young – the homosexual choirmaster at Rev. Jeremiah Wright's Trinity United Church of Christ in Chicago – was an attempt to protect Barack Obama's secrets. Young was murdered shortly before the 2008 Iowa Caucus.

In the lawsuit, Parisi had sought from Sinclair $30 million in damages for himself and his various corporations, including Whitehouse.com Inc., Whitehouse Network LLC and White House Communications Inc.

Parisi claimed he created the entities to function as news agencies.

Sinclair represented himself in court while Parisi was represented by Patton Boggs, one of the most expensive, prestigious and politically connected law firms in the nation's capital.

Sinclair, with no formal legal training, is not a lawyer licensed to practice law in the District of Columbia.

WND could not reach Parisi for comment. Richard Oparil, Parisi's attorney at Patton Boggs, also did not return WND calls asking for comment.

In January 2008, when Sinclair initially came forward to make his charges against Obama, he admitted to his criminal past, including having served prison time in Florida, Arizona and Colorado.