Report Finds Anti-Terrorism Policies Hurt Charities

Contact: Anna Oman, Communications Coordinator, OMB Watch, 202/234-8494 Washington, DC (November 9, 2005) -- Since the 9/11 terrorist attacks, federal measures intended to cut off terrorism funding have imposed undue burdens on the nonprofit sector, according to a report released at the end of last month. The report from OMB Watch, a nonprofit research and advocacy group, entitled ‘Safeguarding Charity in the War on Terror,’ addresses anti-terrorist financing regulations and guidelines that, according to the report, "lack a basic understanding of how nonprofits function, and ultimately do not help -- and may even hinder -- the global war on terror." The report originated out of a June 2005 event held at Georgetown University, where panelists discussed U.S. regulations, laws, and guidelines that seek to curtail the financing of terrorism. Among the anti-terrorism provisions covered were President Bush's Executive Order 13224, which addresses terrorism financing and identifies lists of suspected terrorists, and the Treasury Department's Anti-Terrorist Financing Guidelines, Voluntary Best Practices for U.S. Based Charities. 'Safeguarding Charity in the War on Terror' focuses on the Treasury Department guidelines that, although voluntary, have had troubling consequences. Testimony from scholars and nonprofit practitioners during the panel, as well as the stories of nonprofits directly affected by the new system, expose three prevailing myths that, according to the report, are preventing policy reform: The myth of "voluntariness." The threat of government investigation and asset seizure make the government guidelines anything but voluntary. The myth of utility. Policies such as the Treasury Department guidelines are ineffective as counter-terrorism measures and waste resources that could be more usefully channeled to other areas of the war on terror. The myth of minimal impact. The consequences of current policy go far beyond administrative costs to threaten the nonprofit sector and its ability to deliver services. The report finds "in the absence of clear, sensible guidance and information from government about what is legally required, confusion and fear are driving the response of the nonprofit sector in the campaign against terror financing." Foundations and grantees alike have widely adopted practices such as terror list checking and certification -- a process requiring signatures from grantees, employees, partner organizations, and even vendors -- without consideration of the consequences to civil liberties and without assurance that these steps will offer protection from legal sanction. Charities are also increasingly fearful that continuing to provide legitimate services and activities might cost them funding from either foundations or the government. ###
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