FBI Raids Two U.S. Muslim Charities on Eve of Holy Land Trial

On July 24, the Goodwill Charitable Organization (GCO) of Dearborn, MI, was added to the Department of Treasury's Specially Designated Nationals (SDN) list for alleged ties to Hezbollah. As a result, the group's assets have been frozen and U.S. citizens are barred from conducting any transactions with the organization. The office of Al-Mabarrat Charitable Organization was also searched and files removed, but the organization was not designated as a supporter of terrorism and continues to operate.

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New Executive Order on Iraq Expands Problems for Charities

President Bush issued an executive order on July 16 that expands the government's authority to block the U.S.-based financial assets of individuals or groups in Iraq beyond those it designates as supporters of terrorism, to include those who act, or assist those who act, against peace and stability in Iraq. The order, titled Blocking Property of Certain Persons Who Threaten Stabilization Efforts in Iraq, directs the U.S.

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Trial Testing Humanitarian Aid Standards Begins

The jury has been sworn in for the criminal trial of the Holy Land Foundation (HLF) and five of its leaders, who are charged with indirectly aiding Hamas by providing charitable aid to grassroots organizations in the West Bank and Gaza. The case is focusing public attention on two issues important to the charitable sector. First, some of the secret evidence used to shut down HLF and freeze its assets in 2001 will come to light, and its reliability and veracity will be challenged.

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Grantmakers Without Borders Challenges Treasury's Senate Testimony

On June 20, Grantmakers Without Borders (Gw/oB), a philanthropic network of 130 organizations, sent a letter to the leaders of the Senate Homeland Security and Governmental Affairs Committee objecting to the Department of the Treasury's portrayal of the agency's relationship with the charitable sector as an alliance on counter terrorism issues. The letter states, "Ironically, Treasury's anti-terrorism policies often chill the valuable work of international grantmakers, including Gw/oB's member organizations.

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Summary of Treasury's May 2007 Senate Testimony on Charities and Islamic Extremism

On May 20, 2007 the Senate Homeland Security and Governmental Affairs Committee held a hearing on "Violent Islamist Extremism: Government Efforts to Defeat It." Chip Poncy, the Director of the Department of Treasury's Office of Strategic Policy, for Terrorist Financing and Financial Crimes, testified about counter-terrorist financing strategy and explained outreach efforts to engage the Muslim and charitable communities. Mr.

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Charities Respond to Treasury's Overbroad Allegations of Terrorist Ties

On June 8, charities wrote to the Secretary of the Department of Treasury, Henry Paulson, to express their concern about continuing statements from Treasury that allege charities are a significant source of terrorist financing.

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IRS Urged to Use Terror Watch Lists to Check Nonprofits

When it comes to the effectiveness of using watch lists to identify terrorist threats, theory and reality yield very different results. On May 21, the Treasury Inspector General for Tax Administration (TIGTA) issued a report criticizing the Internal Revenue Service (IRS) for not using the FBI's Terrorist Screening Center's (TSC) consolidated watch lists to check nonprofit tax filings for possible matches to suspected terrorists.

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Muslim Charity Files Libel Suit over Allegations of Terrorist Ties

KinderUSA, a U.S. charity that provides humanitarian aid to children in war zones, including Palestine, filed suit April 26 against the author and publishers of a book that ties the group to terrorist organizations. The libel suit, which seeks $500,000 in damages and other relief, was filed in Los Angeles Superior Court after the publishers refused a request to discontinue distribution.

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House Bill Seeks Accountability for Anti-Terrorist Financing Programs

Legislation was recently introduced in the House that would require the Departments of State and Treasury to adopt recommendations of an October 2005 Government Accountability Office (GAO) report, which addressed the effectiveness of the U.S. government's efforts to assist other countries in the war on terrorism. Among other things, the bill would require the Treasury Department to submit in an annual report to Congress more complete information on how the agency tracks and blocks terrorist assets.

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Treasury Posts Risk Matrix for Charities

In March, without public announcement or comment, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) published a Risk Matrix for the Charitable Sector on its website. The Introduction of the publication says the matrix is meant to help charities comply with U.S. sanctions programs that prohibit transactions with designated terrorists or certain countries. In 2006, Treasury said it was working on a draft of the matrix, and in June 2006, a group of nonprofits wrote Treasury asking for a public comment period. Treasury did not respond.

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