ACLU Testifies Before House on Anti-Terrorism Financing Laws

At a hearing before a House Committee on Financial Services
subcommittee today, the American Civil Liberties Union testified about
the need for greater transparency and due process in the Treasury
Department's enforcement of anti-terrorism financing laws and its effect
on charitable organizations. The Subcommittee on Oversight and
Investigations hearing was aimed at examining how anti-terrorist
financing laws impact legitimate and lawful charities.

"Unfortunately, at a time when humanitarian aid is needed the
most, the Treasury Department's capricious, arbitrary and discriminatory
enforcement of overbroad U.S. anti-terrorism financing laws has made it
far more difficult for nonprofit organizations to provide critical aid
and services," said Michael German, ACLU Policy Counsel and former FBI
Agent in his testimony. "It is Congress' obligation and duty to
investigate and evaluate the Treasury Department's anti-terrorism
financing efforts to ensure they are fairly and effectively targeting
those entities that specifically intend to support illegal activities of
terrorist organizations. Congress must also ensure that a system is put
into place that will provide transparency and due process while
allowing legitimate aid and services to flow unimpeded."

The International Emergency Economic Powers Act (IEEPA), passed
by Congress in 1977, clarified and limited the president's power to
impose economic sanctions on "any foreign country or a national thereof"
during times of national crisis. However, shortly after 9/11, President
George W. Bush invoked his authority under IEEPA to issue an executive
order which designated 27 organizations and individuals as "specially
designated global terrorists" (SDGTs), and authorized the secretary of
the treasury and the secretary of state to name more organizations to
the SDGT list. The USA Patriot Act further amended IEEPA to allow the
government to block or freeze an entity's assets even without a
designation, by simply opening an investigation into whether it should
be designated.

IEEPA does not specify any standard of suspicion necessary to
designate a charity as a terrorist organization and does not require
notice or a meaningful opportunity to contest the allegations. No
criminal charges ever need to be filed in order to effectively shut a
charity down for good, and the charity need never be told what evidence
or allegations led to its demise.

The ACLU is asking Congress to promote greater transparency and
accountability in Treasury Department anti-terrorism financing
enforcement. Specifically, Congress should reform the statutory
framework for designation of SDGTs under IEEPA to ensure full due
process protections and enact a statute for the seizure of assets of
suspected SDGTs that complies with the Fourth Amendment.

"Our Constitution requires precision in the process of
distinguishing between confederates of terrorist groups who seek to
facilitate their unlawful aims and individuals and organizations whose
legitimate First Amendment expression brings them into association with
such groups," said Jennifer Turner, a researcher with the ACLU Human Rights Program and author of the
ACLU report Blocking Faith, Freezing Charity. "We are dealing with an unconstitutionally
overbroad framework which gives the Treasury Department practically
unfettered authority to shutter charities using secret evidence, without
independent oversight, probable cause, or effective due process
protections to protect against error and abuse. Not only that, it is
clear that the federal government is unequally enforcing terrorism
financing laws. The government's markedly different treatment of
for-profit organizations that have allegedly violated terrorism
financing laws demonstrates this unequal enforcement."

Earlier this month, a federal court ruled that Treasury
Department's freezing of a charity's assets was unconstitutional and
that in order to comply with the Constitution, Congress must fix the law
to require a warrant be obtained based upon probable cause before
taking such action. The court also found that the Treasury Department's
failure to give the charity notice of the basis for freezing its assets
violated the Constitution by preventing the charity from being able to
meaningfully respond to the freeze.

The ruling came in a lawsuit filed in November 2008 by the ACLU,
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
froze KindHearts' assets four 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 an SDGT.

More information about the ACLU's lawsuit is available online at:
www.aclu.org/national-security/federal-court-finds-freezing-charitys-assets-unconstitutional

To read the ACLU's statement submitted to the subcommittee, go
to: www.aclu.org/national-security/aclu-testimony-house-committee-finance-subcommittee-oversight-and-investigations-r

The ACLU's report on charitable giving, Blocking Faith,
Freezing Charity, is available at: www.aclu.org/human-rights/report-blocking-faith-freezing-charity