Model Policies for Fair Procedures for Listing and Delisting U.S. Charities

After summarizing current law on how U.S. charities may be shut down for supporting terrorism and citing problems with the lack of due process for charities to defend themselves, this article presents the rationale for a new approach and specific reforms that can bring the system into compliance with constitutional standards.

Summary of Current Law

If it Ain’t Broke …..

Date: 
August 14, 2017
Author: 
Andrea Hall

As the old saying goes, if it ain’t broke, don’t fix it.

The spokesman for the “let’s-shut-down-U.S.-charities-because-they’re-conduits-for-terror-finance” school of thought has been pushing this outdated and discredited narrative in Washington, D.C. over the past year or more. He seems to believe that the Obama administration’s enforcement policy was negligent in its duty to “bust terrorist charities” (his words, not ours), that U.S. nonprofits have been given a free pass over the past eight years, and the result has got to be more terror financing. He is urging lawmakers and the new administration to take us back to the time when he served as a terrorism finance analyst at U.S. Treasury during the George W. Bush administration, and his research seems to reflect those outdated strategies. Since a Hill hearing was held in May 2016, this spokesman has been active in the blogosphere. He has convinced Rep. Ted Poe (R-TX) to introduce a bill that, if passed, would create more problems than it would solve.

Publication of Unindicted Co-conspirator List in Holy Land Case Violated Due Process Rights, Court Rules

Date: 
April 22, 2011
 
Since 2004 the criminal prosecution of the Holy Land Foundation (HLF) and its leaders for material support of terrorism has been, and continues to be, a long running legal battle. One unusual twist has been a May 29, 2007 filing by the prosecution that listed 246 individuals and entities as "Un-indicted Co-conspirators and/or Joint Venturers." In a break with DOJ policies, the list was not sealed and the names, which included most major U.S. Muslim organizations, were made public. Both the trial court in Dallas and the Fifth Circuit Court of Appeals ruled that the release violated due process rights under the Fifth Amendment.

Congressional Effort to Exclude IRW from USG Funding Defeated

Date: 
September 13, 2017

A Congressional budget amendment that would have de-funded a large UK-based humanitarian aid organization was successfully fought back earlier this week.

The amendment, which was proposed by Rep. Ron DeSantis (R-FL) as part of the Department of State’s foreign operations appropriations, would have cut all US government funding to Islamic Relief Worldwide (IRW). A grassroots effort by Islamic Relief USA, InterAction, Charity & Security Network and other organizations sent emails to various Congressional staff members working on the appropriations bill. As the bill went to a vote Monday evening, the amendment was not offered and will not be a part of this funding measure. 

A "Dear Colleague" letter drafted by Rep. Keith Ellison (D-MN) in an effort to oppose the amendment, gathered more than 50 signatures from nonprofit organizations in less than 24 hours, according to Ellison's office. The letter urged members of the U.S. House of Representatives to vote against the amendment, asserting that IRW was singled out for its religious affiliation. 

Charity and Security Network Principles to Guide New Policies

The following ten principles should guide the U.S. government's approach to fixing national security rules and policies that create problems for legitimate charities, development programs, grantmakers, peacebuilding efforts, human rights advocacy and faith-based organizations:

  1. The charitable mission, as stated in an organization's governing documents, should be protected at all times.

Summary of Economic Sanctions Laws and Regulations Authorizing Treasury to Shut Down Charities

Date: 
September 15, 2009

The legal authority for the Department of Treasury to designate a person or organization as a Specially Designated Global Terrorist (SDGT) or freeze assets "pending investigation" is based on laws providing for economic sanctions against foreign nations, going back to the Trading With the Enemy Act in 1917 and ending with the Patriot Act.  

OFAC's FAQs Are Criticized as Misleading

Date: 
June 8, 2017

A list of frequently asked questions (FAQs) recently issued by U.S. Treasury's Office of Foreign Assets Control (OFAC) are intended to clarify its process whereby it removes people from its list of Specially Designated Nationals and Blocked Persons (SDN).

According to OFAC, it removes hundreds of people and entities from the list each year, evidence, it says, that the list is not merely punitive but rather designed to motivate a change in behavior. A removal from the SDN list based on a thorough review that evaluations each request on its merits, applying consistent standards across all cases. Questions on the FAQ page address the entire de-listing process and include "Do I need to hire an attorney in order to file a petition for removal?" and "How long does the entire petition process take?" 

However, the questions and answers have been criticized as misleading. Although OFAC has in recent years de-listed hundreds of people and entities each year, that wasn't always the case. None were delisted in 2001 and 2002, for example, and just over 100 were delisted in 2009. In addition, despite OFAC's claim that the listings are geared to changing behavior, it seems unlikely given that the agency never reveals the specific reason for the listing. The agency also makes it difficult to hire an attorney to assist with a delisting application. A license from OFAC is required to authorize payments to a lawyer, and the license application process is lengthy and cumbersome. Most importantly, there is no relief for persons with names that are similar to a drug dealer or terrorist on the list, although financial institutions will likely refuse to deal with them. 

OFAC's de-listing procedures have long come under fire for the lack of due process and charities that are listed have the additional burden of having their funds frozen indefinitely. 

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