An interesting and positive shift in thinking at the Department of Treasury appears to be quietly taking place in the context of finding ways to get aid to Somalis suffering from famine and civil war. As reported in our Jan. 27 analysis Legal Roadblocks for U.S. Famine Relief to Somalia Creating Humanitarian Crisis, Treasury told the State Department that transactions with al-Shabab, a listed terrorist group active in Somalia, “were prohibited, but that it would not prosecute American aid officials if they acted in ‘good faith‘” (emphasis added).
According to the New York Times, the State Department had sought assurances from Treasury that its employees, grantees and contractors delivering aid would not face “enforcement action” for “accidental, unintentional or incidental benefits” to al-Shabab. The exchange pointed out the dilemma current national security laws create for humanitarian aid, whether from government or private philanthropic and development agencies.
Treasury is right to take “good faith” into account in situations where aid is critically needed to save lives, but delivery complicated. Completely avoiding a listed terrorist group that controls territory may be impossible in some situations, such as Somalia.
If a “good faith” standard has evolved, it should be applied to nonprofits as well. But it is not. In the past (and there has been no announced change) Treasury has imposed a “strict liability” standard on charities that ignores good faith, due diligence and humanitarian concerns. Instead, in 2007 Treasury officials told Congress under their “dual purpose” theory, if any aspect of an organization is engaged in terrorist support, then there is a problem with the entire charitable organization. No provision for accidental or incidental benefits is made. Treasury’s Chip Poncy said this method “raises operational issues as to whether or not Treasury can look at minimizing collateral damage.” To date, however, Treasury has taken no action to address the “collateral damage” problem.
The evolution of a good faith standard is a good first step toward addressing the problem. There are multiple ways “good faith” of charitable programs can be established. For example, following Internal Revenue Service rules on international grantmaking, conducting site visits and audits of programs and taking reasonable steps to avoid exploitation and abuse by a listed terrorist group all demonstrate good faith.
What is sensible and fair for State Department employees and grantees is also sensible and fair for charities. Treasury should engage in dialog with nonprofit sector organizations to discuss the best way to define and implement a good faith standard for them. This would go a long way to solve the humanitarian dilemma in our counterterrorism laws.