Anti-Terrorism Financing Laws Unequally Applied

A major government watchdog organization is charging that Muslim charities are being summarily shut down for supporting terrorist causes while giant firms such as Halliburton are receiving the full protections of American law for allegedly breaking U.S. government sanctions against doing business with Iran - a country designated as a sponsor of terrorism.

"There is unequal enforcement of anti-terrorist financing laws," says OMB Watch.

The organization says the USA Patriot Act gives the government "largely unchecked power to designate any group as a terrorist organization". Once a charitable organization is so designated, all of its materials and property may be seized and its assets frozen. The charity is unable to see the government's evidence and thus understand the basis for the charges. Since its assets are frozen, it lacks resources to mount a defense. And it has only limited right of appeal to the courts. So the government can target a charity, seize its assets, shut it down, obtain indictments against its leaders, but then delay a trial almost indefinitely.

Thus far, OMB Watch says, the effort has resulted in the government shutting down five charities that support humanitarian aid in Muslim areas without disclosing any official finding that they were aiding terrorist organizations. But there has only been one indictment, no trials, and no convictions. "Only one official criminal charge has been brought against a Muslim organization for support of terrorism, and that case has not yet made it to trial."

According to OMB Watch, dozens of charitable groups have been investigated since 2001. The organizations shut down were not on any government watch list before their assets were frozen, the group adds.

The organization says the result is that Muslims have no way of knowing which groups the government suspects of ties to terrorism. "Organizations and individuals suspected of supporting terrorism are guilty until proven innocent," it says.

To support its claim that the government is applying the law unevenly and targeting Muslim-American groups, OMB Watch cites the government's "velvet glove" treatment of the Halliburton Corporation, a giant defense contractor.

Halliburton has been under investigation by the Treasury Department - which oversees the terror-financing campaign - and the Department of Justice since 2001 for doing business with Iran, which is listed as a sponsor of terrorism.

But, says OMB Watch, rather than seizing and freezing assets "pending an investigation," Treasury's Office of Foreign Assets Control (OFAC) and the Justice Department sent an inquiry to Halliburton requesting "information with regard to compliance."

Halliburton sent a written response explaining why they felt they were in compliance with the law. Halliburton's defense seemed to rest on the fact that its dealings with Iran were done through a Cayman Islands subsidiary, not its U.S.-based entity.

Over two years later, in January 2004, OFAC sent a follow-up letter requesting additional information, to which Halliburton responded that March. In July of that year, the U.S. Attorney for the Southern District of Texas sent a grand jury subpoena requesting documents and the case was referred to the Justice Department.

On Sept. 22, 2005, the Progressive Caucus in the House of Representatives
wrote to President George W. Bush, asking that Halliburton be suspended from hurricane relief contracts for a host of reasons, including "dealing with nations that sponsor terrorism."

The White House took no action and Halliburton received no-bid contracts valued currently at $61.3 million, and growing, to provide clean-up, rebuilding and logistical assistance to victims of Hurricanes Katrina and Rita.

Last year, an organization called Halliburton-Watch charged that the handling of the case against the company raises serious legal questions: For example, "if Halliburton were a charity would its assets have been frozen like the U.S.-based Muslim charities; even though little is known about the evidence OFAC relied on to freeze and seize assets of Muslim charities, it appears there is much stronger evidence against Halliburton -- what legal distinction is OFAC making; if U.S. charities formed Cayman Island subsidiaries could they avoid the USA PATRIOT Act, IEEPA, and Executive Order restrictions on dealings with groups or countries linked to terrorism?"

Halliburton has also become the poster child for waste, fraud and abuse among U.S. contractors in Iraq. To date, it has received more than $12 billion in contracts there, many of them on a no-bid basis. According to Pentagon reports, the company failed to account for 43 percent of its Middle East expenses, with $1 billion of those being considered "unreasonable" and another nearly half-billion in the "unsupported" category, according to Defense Department auditors.

Critics of the government say the government's anti-terror financing campaign is a product of the paranoid Islamophobia that has gripped the U.S. since 9/11. They also say is has had its desired effect: to scare Muslim-Americans into abandoning one of the premier tenets of Islam -- giving to those in need.

The government denies these charges; it says it is merely trying to cut off funding to a wide variety of so-called charitable organizations that funnel it to groups that practice terrorist tactics. The Treasury Department cites President Bush's pledge to ensure "that Arab Americans and American Muslims feel comfortable maintaining their tradition of charitable giving".

Meanwhile, Muslim charities report a precipitous decline in contributions. Contributions that do arrive come increasingly in cash from anonymous givers. And donors who happen to be Muslim are increasingly turning to the large household names like Oxfam and Save the Children, which may conduct programs in predominantly Muslim areas abroad.

Kay Guinane, OMB Watch's Director of Nonprofit Speech Rights, says, "The real tragedy behind closure of Muslim charities is the fate of people in need of humanitarian assistance, who are doing without because the funds have been frozen by the U.S. and sit in the bank, benefiting no one". She suggested, "The U.S. government could demonstrate its good faith by releasing these funds to other charities or aid agencies."

Leaders of the Muslim charitable community in the U.S. have had numerous meetings with officials at the Treasury Department, and together developed a set of "guidelines" for charitable organizations and their donors. But these guidelines lack any specificity regarding Muslim philanthropy and could be applied to any charitable organization. They also provide no safe harbor from being shut down. OMB Watch told IPS, "A group could comply 100% and still be shut down 'pending an investigation'."

Leaders of the Muslim philanthropic community in New Jersey asked the Treasury Department at the start of Ramadan in 2004 to issue a "white list" of "approved" charities. But the request was denied. The government claimed it was impossible to fulfill. "Our role is to prosecute violations of criminal law," a spokesman said, adding, "We're not in a position to put out lists of any kind, particularly of any organizations that are good or bad"

But government critics also claim that Treasury's campaign is reminiscent of the activities of John Ashcroft's Justice Department in the months following the terrorist attacks of September 11, 2001 on the World Trade Center and the Pentagon. The government then launched its "Global War on Terror" by rounding up thousands of "Middle Eastern-looking" men and women, sending them to jail without charges or access to lawyers, holding many in solitary confinement, but accusing none of them with terror-related crimes, convicting no one, and ending up deporting some for non-criminal immigration violations.

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