Washington, DC (November 11, 2005)--The Office of Personnel Management withdrew a regulation this week that required nonprofits participating in the Combined Federal Campaign--the federal government's workplace charitable giving program--to screen employees and donation recipients for possible terrorist ties. The new final rule, which applies to 2006 CFC applicants, instead requires participating charities to certify that they are in compliance with existing anti-terrorist financing laws. OPM's explanation of the new rule notes, "OPM does not mandate that applicants check the Specially Designated Nationals (SDN) list or the Terrorist Exclusion List (TEL)." For the last two years, OPM required participants to check such lists. "The revised rule that does not make list checking mandatory- shows OPM now recognizes that a one-size-fits-all approach to this issue doesn't work," said Gary Bass, OMB Watch Executive Director. "It is also a strong signal to other workplace giving programs, such as the United Way, that they should reconsider their own list checking policies." OMB Watch was one of 13 nonprofits that filed suit against the OPM in Nov. 2004, after being denied participation in the CFC for refusing to sign a certification of compliance with the terror watch list check policy. The suit, filed in the federal district court for the District of Columbia, charges the policy violates the First Amendment rights of participating charities and was implemented in 2004 without the required open rulemaking process. Elimination of the mandatory list-checking requirement will likely resolve the litigation. In March OPM proposed a new regulation that shifted its position away from the list-checking requirement, using a certification of compliance with existing law instead. OMB Watch and 12 others filed written comments that generally supported the new approach but suggested clarifications and some revisions. OMB Watch's comments noted that the new approach recognizes the variety of ways different types of organizations can comply with anti-terrorist financing laws, citing the Principles of International Charity developed by the nonprofit sector as a resource for charities to ensure their funds are not diverted to terrorist organizations. Many nonprofit advocates, while viewing the OPM change as a significant positive step, believe it still does not address the ambiguities of complying with federal law. Nonprofits that participate in the CFC may still find it difficult to determine what they must do to be in compliance. "We strongly believe the underlying laws and regulations dealing with anti-terrorism financing must be changed to create reasonable steps nonprofits can take to comply," commented OMB Watch's Gary Bass. The group is also calling for clear due process procedures for nonprofits accused of wrongdoing and believes that the final rule wrongly suggests that nonprofits should follow the highly controversial Voluntary Best Practices for U.S. Based Charities, published by the U.S. Treasury Department in 2002. "Charities should know that the final CFC rule itself does not require compliance with the Treasury guidelines," explained Kay Guinane, counsel for OMB Watch's Nonprofit Advocacy Project. "Even the Treasury Department has acknowledged that these guidelines--which are not requirements--are seriously flawed, and officials there are in the process of revising them. No organization should feel compelled to use them in order to participate in the Combined Federal Campaign."