In a late January announcement of key staff for the Department of the Treasury, newly sworn in Secretary Timothy Geithner elected to retain Stuart Levey as Under Secretary of the Terrorism and Financial Intelligence (OTFI) office. Levey's tenure during the Bush administration coincided with OTFI's increasingly broad and punitive approach to the charitable sector rather than recognizing charitable works as a key factor in addressing root causes that lead people to terror and violence.

For example, Levey and OTFI staff have rejected requests from the nonprofit sector to withdraw Treasury's Anti-Terrorist Financing Guidelines in favor of more constructive strategies for protecting charitable programs from supporting terrorism. Instead, in testimony before the Senate Finance Committee on April 1, 2008 Levey said Treasury has "active engagement with the charitable sector" without disclosing criticisms of Treasury's process in shutting down of charities and freezing assets indefinitely.

Levey also said Treasury's engagement with the nonprofit sector "is particularly important because we want humanitarian assistance to reach those who are truly in need through channels safe from terrorist exploitation" without mentioning the department's refusal to release frozen charitable funds to reputable nonprofits so that the dollars can reach those in need.

Treasury has enormous and unilateral powers to shut down charities and freeze their assets if there is a suspicion of terrorist support. Under Levey’s leadership OTFI has refused all requests to establish procedures for millions of dollars in frozen charitable assets to be used for charitable purposes. OTFI shut down one charity in 2006 “pending an investigation,” but has taken no further action. Such denials of due process and fundamental fairness have had a chilling impact on U.S. philanthropy.

For more information:

Eliminate Unnecessary Barriers to Legitimate Charitable Work Liberty and Security Recommendations to New Administration Nov. 2008

Recommendation: Improve the national security regulation of charities by ending the use of the International Emergency Economic Powers Act (IEEPA) to regulate charities and allowing the Department of State to develop a more effective and appropriate framework.