August, 19 2009, 02:30pm EDT
For Immediate Release
Contact:
Rachel Myers, ACLU, (212) 549-2689 or 2666; media@aclu.org
David Cole, Georgetown Law, (202) 365-6779
Fritz Byers, (419) 241-8013
Court Rules Government's Freeze of Charity's Assets Unconstitutional
Treasury Department Violated Fourth and Fifth Amendment Rights of ACLU Client KindHearts
TOLEDO, Ohio
A
federal court ruled for the first time late Tuesday that the government
cannot freeze an organization's assets under a terror financing law
without obtaining a warrant based upon probable cause. The court also
found that the government must give the organization notice of the
basis for freezing its assets and a meaningful opportunity to defend
itself. The ruling came in a lawsuit filed in November 2008 by the
American Civil Liberties Union, the ACLU of Ohio and several civil
rights attorneys on behalf of KindHearts for Charitable Humanitarian
Development, Inc., an Ohio-based charity. The U.S. Treasury
Department's Office of Foreign Assets Control (OFAC) froze KindHearts'
assets three-and-a-half years ago without a warrant, notice or a
hearing, based simply on the assertion that OFAC was investigating
whether the charity should be designated as a "specially designated
global terrorist (SDGT)."
"This historic ruling rejects the
government's argument that the Fourth Amendment's prohibition against
unreasonable searches and seizures does not apply when a case raises
national security and foreign policy concerns," said Hina Shamsi, an
ACLU cooperating attorney who argued the case. "The ruling provides a
much-needed judicial check on executive power. Until now, the
administration has been able to unilaterally and indefinitely freeze
the assets of a U.S. corporation without probable cause and a warrant."
KindHearts has never been found to
have engaged in any wrongdoing and has never been designated an SDGT,
yet it has been effectively shut down since OFAC first froze its assets
on February 19, 2006. As a result of the freeze pending investigation,
it is a crime for anyone to do any business with KindHearts and the
charity has no access to its own property.
"Although KindHearts provided
detailed information to the government about KindHearts' operations,
and requested that the government specify its reasons for blocking
KindHearts' assets pending investigation, the government ignored
KindHearts' submissions and repeatedly delayed in responding to its
requests," said Alan Kabat of Bernabei & Wachtel, co-counsel for
KindHearts. "The court found that the government's actions were
fundamental violations of due process."
In Tuesday's ruling, U.S. District
Judge James G. Carr of the Northern District of Ohio, Western Division,
found that the administration must obtain a warrant based on probable
cause before seizing an organization's assets, citing judicial
precedent holding that the executive branch's "domestic actions - even
when taken in the name of national security - must comport with the
Fourth Amendment."
"For years the Treasury Department
has exercised unchecked power to shut down charities on unfounded
charges of terrorist ties," said Georgetown Law Professor David Cole,
co-counsel for KindHearts. "Yesterday's decision declares that such
power can be employed only pursuant to the basic constitutional
safeguards of probable cause, judicial oversight and due process."
Judge Carr also ruled that OFAC
violated the Fifth Amendment's guarantee of due process because it
"violated KindHearts' fundamental right to be told on what basis and
for what reasons the government deprived it of all access to all its
assets and shut down its operations."
"The judge rightly found that the
government cannot simply freeze an organization's assets, essentially
shutting it down, without providing the organization a meaningful
chance to defend itself," said Alexander Abdo, a legal fellow with the
ACLU National Security Project. "This ruling underscores what we have
said all along - OFAC's unlimited authority to seize a charity's
property without due process is unconstitutional."
KindHearts' founders established the
charity in 2002 - after the government shut down a number of other
charities - with the express purpose of providing humanitarian aid both
abroad and in the United States in full compliance with the law.
Despite the efforts KindHearts took to implement OFAC policies and even
seek its guidance, OFAC froze KindHearts' assets in February 2006.
Other attorneys on the case, now called KindHearts v. Geithner,
are Ben Wizner of the ACLU, Fritz Byers of Toledo, Ohio; Lynne Bernabei
of Bernabei & Wachtel, PLLC in Washington; and Carrie Davis of the
ACLU of Ohio.
More information about the case, including Tuesday's ruling, is available online at: www.aclu.org/kindhearts
The American Civil Liberties Union was founded in 1920 and is our nation's guardian of liberty. The ACLU works in the courts, legislatures and communities to defend and preserve the individual rights and liberties guaranteed to all people in this country by the Constitution and laws of the United States.
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