US House blocks law that could embolden Trump to crack down on political enemies

Pro-Palestinian organisations could have received outsized impact of bipartisan law, activists say

US president-elect Donald Trump. Reuters

Donald Trump is preparing to retake the White House with the support of a fully Republican Congress, but before he returns to the Oval Office, the House of Representatives has rejected a bipartisan bill that would have emboldened the US executive to crack down on non-profit organisations it deems to be supportive of terrorists.

The bipartisan “Stop Terror-Financing and Tax Penalties on American Hostages Act”, passed on Tuesday night, sought to “to postpone tax deadlines and reimburse paid late fees for United States nationals who are unlawfully or wrongfully detained or held hostage abroad”, and adds a provision “to terminate the tax-exempt status of terrorist supporting organisations”.

The provision is controversial as the bill does not require the Department of Treasury to disclose the specific reasons for denying an organisation's tax-exempt status, or provide any evidence of its designation, according to testimony from the Congressional joint committee on taxation. Despite that, it had cleared an earlier committee hurdle with widespread support from both parties.

But many Democrats now say that after the sweeping victory of Donald Trump and his Republican Party in last week's elections, “conditions have changed”.

The bill gained a majority support with a 256-145 vote on Tuesday night, but failed under voting rules that stipulated it receive a stronger two-thirds majority.

The legislation's detractors said it would have authorised “Donald Trump to recklessly impose a death penalty on any non-profit in America.”

The bill was “originally filed months ago, with good intention, including that of some of my Democratic colleagues,” Congressman Lloyd Doggett, a Democrat from Texas, told the House floor on Tuesday night.

Congressman Jason Smith, a Republican from Missouri, said: “I cannot understand what is controversial about an organisation losing their tax exempt status if they're funnelling [money to] terrorism.”

He also issued a warning to Democrats about a previous House-passed partner bill with similar provisions sitting in wait in the Democratic-controlled Senate: “Guess what? In a couple of months it won't be the Democrat controlled Senate.”

The president-elect's previous threats to lock up journalists and hints that he might consider using the military to crack down on political threats from “the enemy within” increased the stakes for the bill's critics on Capitol Hill.

Mr Doggett had previously drawn parallels to Viktor Orban's government in Hungary.

“We really are giving to one person single-handedly under the orders – we could be under the orders of a vengeful president – the right to make an authoritarian decision,” he told the ways and means committee at a mark-up meeting in September.

Mr Doggett then asked Congressman Robert Harvey, the deputy chief of staff for the joint committee on taxation: “Let's suppose we had an administration that vowed to wreak vengeance on its opponents … Would there be any limitation on that president's Treasury secretary from designating an organisation a terrorist-supporting organisation and strip that organisation of its non-profit status?”

Mr Harvey responded: “That requires me to do some speculation, but I'm not aware of any limitations in the bill.”

The bill's Democratic co-sponsor, Congressman Brad Schneider, specifically highlighted Hezbollah and Hamas in September when he said it was “important we continue to highlight the troubling issues of individuals and organisations here in the United States, many with special tax-exempt status, giving material support to terrorism”.

That has also raised the alarm for pro-Palestine activists in Washington, who have called the piece of legislation a “very, very dangerous bill”.

“All of us are feeling very insecure about this right now,” Medea Benjamin, a leading activist with progressive anti-war group CodePink, said in a statement.

“This comes as a result of all the activism there has been to free Palestine,” said Ms Benjamin, who has demonstrated in favour of a ceasefire and free Palestine on Capitol Hill nearly every day since the war's start.

A vast majority of Washington remains supportive of Israel, and many embrace a definition of anti-Semitism that includes anti-Zionism and criticism of the Israeli government.

But the bill's lead Republican sponsor, Congresswoman Claudia Tenney, said the intention of the legislation is “simple”.

“No American who has suffered the injustice of wrongful detention or hostage-taking by our adversaries should return home to face penalties from their own government,” Ms Tenney said. “Not only does this defy common sense, but it defies compassion.”

Rights groups have also raised the alarm over how the bill puts together these two provisions. The American Civil Liberties Union, joined by more than 120 other civil society organisations, opposed it in a letter to Republican House Speaker Mike Johnson, claiming the proposed law “creates a high risk of politicised and discriminatory enforcement”.

“We do not oppose the provisions … that relate to preventing the IRS [Internal Revenue Service] from imposing fines and penalties on hostages while they are held abroad,” the letter said.

Ryan Costello, policy director with the National Iranian American Council Action, told The National the bill “would essentially kill any non-profit’s ability to function”.

“They couldn’t get banks to service them, they won’t be able to get donations, and there’d be a black mark on the organisation, even if it cleared its name,” he said.