US treasury defends charity law in wake of criticism

The Obama administration is working to reconcile anti-terror measures with zakat.

WASHINGTON // A US treasury department official yesterday defended counterterrorism laws instituted after September 11 that give the government broad powers to shut down charitable organisations suspected of having ties to terrorist groups. Daniel Glaser, the treasury department's deputy assistant secretary for terrorist financing and financial crimes, told a House panel that the Bush-era laws are essential to combating terrorism and have allowed authorities to disrupt the flow of money to al Qa'eda and other groups through international charities, many of which have offices in the United States.

"The sad truth is that terrorist organisations have established and used charities, and have exploited well-intentioned donors," Mr Glaser said in his testimony submitted to members of the house financial services committee. "We will continue to use every tool at our disposal to stop the flow of illicit money to those who seek to harm our citizens." Two weeks after the September 11 attacks, George W Bush issued an emergency executive order authorising the treasury department to shut down and seize the assets of "specially designated global terrorists", or businesses, charities and extremist groups engaged in terrorist activities. The laws have since been broadened to include any entity otherwise associated with the designated groups or those found to "assist in, sponsor, or provide financial, material, or technological support for ? acts of terrorism or designated terrorists".

But critics say the laws are vague and have had a chilling effect on legitimate charitable giving. The matter is further complicated by the fact that groups such as Hamas, which the United States considers a terrorist organisation, also engage in humanitarian work such as building hospitals. The laws have angered many US Muslim leaders and fuelled widespread government distrust in some American-Muslim communities, a point acknowledged last year by Barack Obama, who said in his Cairo speech that laws have "made it harder for Muslims to fulfil their religious obligation".

"I'm committed to working with American Muslims to ensure that they can fulfil zakat," he said. Over the past decade, the treasury department has frozen millions of dollars in assets held by nine US-based charities, seven of which were Muslim charities. Just three of the designated Muslim charities, however, have faced criminal prosecution and only one - the Texas-based Holy Land Foundation for Relief and Development, which funnelled money to Hamas for humanitarian projects - has been convicted of terrorism-related charges.

Michael German, the policy counsel to the American Civil Liberties Union who testified at the hearing, said that the laws violate constitutional rights that protect against unreasonable search and seizure. The laws, he stated in written testimony, effectively allow the government "to shut down an organisation forever, without notice or hearing, on the basis of secret evidence, and without any meaningful judicial review". He also noted that the treasury department is not bound by any timeline or limit as to how long it can hold frozen charitable donations, a central grievance for many in the philanthropic world.

Mr Glaser, however, said in his testimony that each designation is reviewed by attorneys to ensure they are "legally sufficient" and that the Treasury department makes a "good faith effort" to provide a designated group "with an explanation ? as well as information on procedures to seek a licence or challenge the designation". Treasury department officials, he added, have met frequently with US Muslim groups to improve relations and clarify guidelines.

Still, Muslim leaders here said that many people in their communities complain about the laws being unclear. "Every Ramadan, Muslims want to be able to give to charity and many people become afraid to do so," said Corey Saylor, the legislative director for the Council on American-Islamic Relations. "People don't know how to donate and charities don't really know how to operate because everything is so murky."

Kay Guinane of the Charity and Security Network, a non-profit group dedicated to reforming the Bush-era laws, said fear of government repercussions has caused many US-based charities to scale back programmes in conflict zones where terrorist groups operate. "One unintentional mistake made by an organisation that's operating in good faith could conceivably cause it to be shut down and be put out of business," Ms Guinane, who testified at the hearing, said in an interview.

She said the laws should be modified to clarify the definition of "material support" and to afford charities more opportunity to correct mistakes before they are shut down. A federal court this month ruled in favour of an Ohio-based Muslim charity, KindHearts for Charitable Humanitarian Development, which was effectively shut down for alleged ties to Hamas despite never being deemed a "specially designated global terrorist".

The court ruled that the treasury department violated the charity's constitutional rights by freezing its assets without proper notice and by failing to provide the group with a "meaningful" opportunity to respond. [e-mail]