The Combined Federal Campaign (CFC) has filed a motion to dismiss a lawsuit challenging its requirement that participating charities check employee names against two government terrorist watch lists. The CFC motion claims the Treasury Department's Voluntary Anti-Terrorist Financing Guidelines as authority and cites activities by private foundations as justification for its actions. These guidelines have been widely criticized and are currently under review by Treasury.

In a positive step for federal anti-terrorist financing policy, the Office of Personnel Management's Combined Federal Campaign (CFC), the federal government's workplace charitable giving program, has finalized a rule change that moves away from its previous requirement that all participating charities check their employees names against government watch lists. Instead, the new CFC rule requires participating charities to certify that they are in compliance with existing anti-terrorist financing laws. Background

A recent Pace Law Review Symposium, “Anti-Terrorist Financing Guidelines: The Impact on International Philanthropy,” highlighted the need for changes in the government guidelines and increased transparency of the reasons behind government decisions to shut down several Muslim charities accused of financing terrorists. The U.S. Treasury Department published the guidelines, which have been widely criticized, in November 2002.

After months of silence the Combined Federal Campaign has issued guidance on how charities participating in this workplace-giving program for federal employees should implement its requirement that they certify they do not knowingly employ persons on various government terrorist watch lists. The CFC Memorandum 2004-12 provides background information and clarification, but does not change the interpretation that led a dozen nonprofits to file suit to block the policy.