I wrote a book about charity in an underdeveloped country. I used factual events and NGOs but because the information is so damning--I describe not only fraud and embezzlement, but at one point I describe a lecherous old missionary who is head of a well funded orphanage-- I blended some characters and changed the names of anyone who might be negatively impacted. I also changed names of places. A reader who wanted to know the names of places would be able to discover places and perhaps people, if they did extensive research (for example my Doctoral dissertation was on the region). Could I be sued for libel.
ANSWER: First, regarding the fraud and embezzlement... Do you have proof? If you could demonstrate that these things have actually happened, then no... you're not in any danger, there. If something is true, and you can prove it's true, you can say it.
Now, the "lecherous old missionary" thing... that's a little different. Do you actually accuse him of such? Or do you just describe behavior? Are you sure you're not misinterpreting? This is a dangerous area, legally.
Changing names and places is fairly irrelevant. Because it's not about casual readers finding out who is who and where is where... it's about the people you're writing about being able to recognize themselves. If, for example, your lecherous missionary is 60 years old and named Randolf, and you change him to be a 40 year old named Bob, it may not matter. If Randolf reads the description (including setting, events, everything) and says, "Hey, that's me," then you're in danger. IF, that is, you're portraying him in a way that would offend him. AND you can't prove he did any of the things you say.
So that's the approach you should take. If there's a chance they can recognize themselves... beware.
---------- FOLLOW-UP ----------
I appreciate the timely and thoughtful response.
I am safe with the fraud and embezzlement. But the missionary concerns me. Allow me a brief follow-up. I am not completely clear:
I do not accuse. I describe. Is there a difference in terms of libel?
And, if this helps to clarify my question, it is not a misinterpretation. But it certainly is not first hand. I recount events as recounted to me by his family members, and by women and men who worked for him and were the object of his depredations. None of these people could ever be brought into court as they live in an underdeveloped country far from the US. How would I prove it? Would I be required to?
Okay... I'm going to have to err on the side of prudence and warn you to be very careful with this.
Is there ANY way this missionary could recognize the character in your story as being him? Any way whatsoever?
If so, then you have a problem. Check out the Wikipedia entry on the novel Peyton Place to see what kind of problems can come up when fictionalizing local truths. The author was sued for libel and won an out-of-court settlement... despite the fact that the author insisted six ways to Sunday that the entire book was fiction. Some of the resemblances to locals were just too close to home, so to speak.
So that's what you're really looking at. If your real life missionary can see himself in this character, and take offense at the "allegations" made (even indirectly) about him... then there's the potential for a lawsuit. And you'd be in danger because there's no way you could prove that the behavior you described was accurate.