On May 31 a federal court will hear arguments on whether a complaint brought against the Carter Center by the Zionist Advocacy Center (TZAC), which alleges that hosting conflict resolution meetings attended by Hamas and the Popular Front for the Liberation of Palestine (PFLP), both designated as terrorist groups by the U.S., should be dismissed. TZAC alleges that hosting the meetings and serving water, fruit and cookies constitutes illegal material support. The Department of Justice (DOJ) moved to dismiss the case, saying that TZAC’s claims “are without legal basis…” TZAC filed the case under seal in November 2015 using the False Claims Act (FCA), which allows private whistleblowers to seek enforcement of U.S. law. The case was partially unsealed in January 2018. It raises significant questions about how far the Supreme Court’s 2010 ruling in Holder v Humanitarian Law Project (HLP) goes in prohibiting communications and contact with listed groups.
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The Charity and Security Network monitors U.S. and foreign government activities and a wide range of news sources to identify developments in national security policy that impact civil society and nonprofit organizations. We collect and disseminate relevant information on our website, via our Twitter and Facebook accounts, and through our biweekly email newsletter, which contains links to a variety of news articles. To read the most recent issues of our email newsletter or to subscribe, click here.
Our staff also creates news pieces on events and developments of particular interest to our members that are not covered in other news outlets. Those stories can be found below, in revese chronological order.
Two intergovernmental events during the last week of April 2018 demonstrated growing support to address the problems nonprofits organizations (NPOs) are having with access to financial services for international programs. At both the conference on combatting terrorist financing hosted by the French government and the Financial Action Task Force’s (FATF) annual meeting with NPOs and private sector stakeholders, outcome statements emphasized the importance of addressing the “derisking” problem and ensuring that efforts to stop terrorist financing do not unduly disrupt or discourage NPO activities.
Norwegian People’s Aid, (NPA) signed an agreement with the United States Government on March 28, 2018 settling a federal lawsuit alleging that two of its projects - democracy training for youth in Gaza and mine clearing in Iran - violated the terms of a 2012 USAID grant agreement to provide emergency aid in South Sudan. NPA’s grant agreement with USAID stipulated that it did not provide material support to entities on U.S. terrorist lists. NPA said it believed the certification only applied to U.S.-funded activities, but USAID said it applies to all NPA projects, regardless of funding source. The case was filed in 2015 under seal in federal district court in the Southern District of New York under the False Claims Act by attorney David Abrams, a self-described “pro-Israel activist.” NPA said it agreed to pay $2.025 million in order to close the case and avoid the expense of a trial. Because the case settled prior to trial there was no challenge as to whether the either of projects constituted material support. Abrams told Development Today he has two more cases against European NGOs pending under seal.
A bill that passed the House of Representatives this week, the (HR 5443) would require electronic filing of nonprofit tax returns and make those forms available to the public in a machine-readable, searchable format.
The measure grew out of work by The Aspen Institute's Nonprofit Data Project, an effort to improve nonprofit information and transparency, in partnership with GuideStar, Urban Institute, Lilly Family School of Philanthropy, Foundation Center and Johns Hopkins Center for Civil Society Studies. It would enable the public to use IRS Form 990 data for research, fraud reduction, informed charitable giving and other purposes, according to a statement from The Aspen Institute. In committee markup of the bill last week, Rep. John Lewis (D-GA) described it as "sound and good policy."
IRS Form 990s contain information on the missions, governance and finances of nonprofit organizations. Until recently, they were only available as non-searchable images, greatly limiting their potential. This system led the Nonprofit Data Project to issue the report, Information for Impact: Liberating Nonprofit Sector Data, in 2013. Funded by the Bill & Melinda Gates Foundation, the report detailed the benefits of open data, such as increased transparency, improved speed and accuracy, and new opportunities for nonprofit innovation. In June 2016, electronically filed Form 990s were released as open data by the IRS on Amazon Web Services. Approximately 60% of the forms are electronically filed and available through this service.
The bill now moves to the Senate, and if passed, would go into effect the tax year after the law's enactment.
The TAILOR Act (HR 1116), which passed the House of Representative on March 14, 2018, appears to promote implementation of the risk-based approach by bank regulators. It requires federal bank regulators to take “risk profiles and business models” of financial institutions into account when taking regulatory action. Regulators would be required to determine the appropriateness and impact of regulatory action and tailor regulatory action to limit compliance impact, cost, etc. via a risk profile. Regulaory action is defined as "any proposed, interim, or final rule or regulation, guidane, or published interpretation." The agencies would also have to review all rules promulgated in past seven years and make them consistent with this standard. The bill was sent to the Senate and referred to the Banking Committee. A companion bill, (S 366) was filed in the Senate in 2017 by Sen. Mike Rounds (R-SD). Democrats on the House committee filed a minority report opposing the bill because it could result in litigation by banks that would tie up the regulatory system.