I.       JURISDICTION

A.  Legislative Branch

1.      House Judiciary Subcommittee on Crime, Terrorism and Homeland Security;

2.      Senate Homeland Security and Governmental Affairs Committee;

3.      Senate Judiciary Subcommittee on Terrorism, Technology and Homeland Security;

4.      Senate Finance Committee

B. Executive Branch

1.      The President has the authority to amend Executive Order 13224 regarding Treasury rules and regulations regarding financing activities in support of terrorism. 

2.      The Treasury Department has discretion to revise or withdraw the Treasury Guidelines (the Office of Terrorism and Financial Intelligence within the department of the Treasury oversees implementation of the Treasury Guidelines). 

3.      The Treasury Department’s Office of Foreign Assets Control (OFAC) has the authority to release funds when a designated charity requests the money be transferred to another charity or entity like the UNHCR.   Both of the parts of the federal regulations governing the sanctions that include the freezing of funds, Terrorism Sanctions Regulations, 31 C.F.R. Part 595 and Foreign Terrorist Organizations Sanctions Regulations, 31 C.F.R. Part 597, refer to the Reporting Procedures and Penalties, 31 C.F.R. Part 501, which provides a process that authorizes otherwise blocked transactions by giving OFAC the power to grant two types of licenses:

a.       General license— authorizes otherwise prohibited transactions under appropriate terms and conditions. See 31 CFR 501.801(a).

b.      Specific license — authorizes successful applicant to engage in transactions otherwise prohibited and not authorized by a general license. See 31 CFR 501.801(b).

II.     STATUS OF ACTION

A.     Legislative Branch:

1.      Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA) was introduced by Senator Susan M. Collins (R-ME) and had ten co-sponsors.  The House of Representatives passed the act on December 7, 2004 with a vote of 336-75; the Senate passed the act the next day with a vote of 89-2; and President Bush signed the act into law on December 17, 2004, as P.L. 108-458. 

2.      Hearings on the Material Support Statute/Treasury Guidelines: 

a.       On April 20, 2005, the Senate Judiciary Subcommittee on Terrorism, Technology and Homeland Security held a hearing concerning the material support statute.  The following individuals testified:  Daniel Meron, Principal Deputy Assistant Attorney General for the Civil Division of DOJ; Barry Sabin, Chief of the Counterterrorism Section of the Criminal Division of DOJ; and Andrew McCarthy, Senior Fellow at the Foundation for the Defense of Democracies. 

b.      On May 10, 2005, the House Judiciary Subcommittee on Crime, Terrorism and Homeland Security held an Oversight hearing on Amendments to the Material Support for Terrorism Laws:  Section 805 of the USA PATRIOT Act and Section 6603 of the IRTPA.  The following individuals testified:  Glenn Fine, Inspector General of DOJ; Gregory Katsas, Deputy Attorney General at DOJ; Barry Sabin, Chief of the Counterterrorism Section of the Criminal Division of DOJ; and Ahilan Arulanantham, a staff attorney for the ACLU and author of “‘A Hungry Child Knows No Politics:’ A Proposal for Reform of the Law Governing Humanitarian Relief and ‘Material Support’ of Terrorism.”

c.       On May 10, 2007, the Senate Homeland Security and Governmental Affairs Committee (Senator Joseph Lieberman, I-CT, presiding) held a hearing which addressed, inter alia, the Treasury Department’s outreach to the charitable sector and Muslim-American communities.  The following individuals testified:  Chip Poncy, Director of the Office of Strategic Policy for Terrorist Financing and Financial Intelligence; Jeremy F. Curtin, Coordinator of the Bureau on International Information Programs at the State Department; John J. Miller, Assistant Director of the Office of Public Affairs at the FBI; and Jeffrey J. Greico, Acting Assistant Administrator of the Bureau for Legislative and Public Affairs, U.S. Agency for International Development.

d.      On April 1, 2008 the Senate Finance Committee held a hearing on anti-terrorism financing.  Under Secretary for Terrorism and Financial Intelligence Stuart Levey was the only witness.

B.     Executive Branch

1.      Executive Order 13224 (September 23, 2001):  The Order bars anyone, including charities, from engaging in transactions with terrorists or terrorist organizations, and further authorizes and directs the Secretary of the Treasury “to take all appropriate measures within their authority to carry out the provisions of this order.”  

2.      Treasury Guidelines (November 2002;revised guidelines issued October 31, 2006):  In 2007, the Treasury Department released a companion to the Treasury Guidelines, the Risk Matrix for the Charitable Sector, which purports to set forth criteria for assessing whether disbursing funds for resources to grantees present a low, medium or high risk.

C.     Judicial Branch:

1.      Several federal district and circuit courts have addressed the whether the “intent” and “expert advice or assistance” aspects of the material support statute, as amended by the IRTPA, are constitutional.[i]  These courts have upheld the statute’s intent requirement as constitutional; but have found portions of the “expert advice and assistance” definition of material support as unconstitutionally vague.

Humanitarian Law Project v. Mukasey, 509 F.3d 1122 (9^th Cir. 2007):  The Court of Appeals for the Ninth Circuit affirmed that 18 U.S.C. § 2339B(a) does not require specific intent to further the unlawful aims of designated foreign terrorist organizations, and does not violate due process due to the lack of a specific intent requirement.  Plaintiffs were six organizations and others who sought to help nonviolent and lawful activities of the Kurdistan Workers Party, a.k.a. Partiya Karkeran Kurdistan (“PKK”) and the Liberation Tigers of Tamil Eelam (“LTTE”), both of which have been designated as foreign terrorist organizations.  Plaintiffs argued, inter alia, that the material support statute violated their due process rights because the statute imposed a criminal penalty for their association with PKK and LTTE without requiring a specific intent that Plaintiffs intended to further PKK’s and LTTE’s unlawful goals.  Id. at 1127.  After protracted litigation (and after and considering the IRTPA’s amendments to 18 U.S.C. § 2339B(a)), the Ninth Circuit noted that the statute requires intent that donors know that they are providing “material support or resources” to a designated terrorist organization or with knowledge that the organization is or has engaged in terrorist activities; as such, the statutes “complies with the ‘conventional requirement for criminal conduct-awareness of some wrongdoing,’” and complies with constitutional requirements of “personal guilt.”  Id. at 1131 (citation omitted).  The court also refused to read a requirement into the statute, that donors specifically intended to further the unlawful activities of the designated terrorist organizations.  Id. at 1131-32.  Finally, while the court noted that Congress could have - but did not - required that donors act with specific intent to further terrorist activities of designated terrorist organizations, “it is not our role to rewrite a statute, and we decline to do so here.”  Id. at 1133.

Plaintiffs also challenged the definition, in 18 U.S.C. § 2339B(a), of “material support or resources” as “training, expert advice or assistance” as unconstitutionally vague.  509 F.3d at 1133.  The district court had invalidated that portion of the definition as unconstitutionally vague, but in 2007 the Ninth Circuit disagreed in part.  Specifically, the Ninth Circuit considered that the IRTPA defined “expert advice or assistance” as “imparting ‘scientific, technical, or other specialized knowledge.’”  Id. at 1135 (quoting 18 U.S.C. § 2339A(b)(3)), and held that the “other specialized knowledge” portion of the definition of “expert advice or assistance” was void for vagueness.  However, the Ninth Circuit held that the “scientific and technical” portion of “expert advice or assistance” is not vague.  Id.

U.S. v. Taleb-Jedi, 566 F. Supp. 2d 157 (E.D.N.Y. 2008):  Defendant Taleb-Jedi was charged with providing material support to the People’s Mojahedin Organization of Iran (the “PMOI”) – a designated terrorist organization.  Taleb-Jedi contended the material support statute, 18 U.S.C. § 2339B, should be interpreted to require a showing that she specifically intended to support PMOI’s “terrorist aims,” and if the statute did not require such a specific intent, it violated her constitutional right to due process.  Id. at 173.  Taleb-Jedi further argued that the statute violates her rights under the First Amendment to freedom of speech and freedom of association.  The district court held that 18 U.S.C. § 2339B does not violate defendant’s first amendment or due process rights (on this point, noting that the statute’s requirement for a showing of scienter is sufficient to meet the due process standard of personal guilt).  Id. at 177-180.

U.S. v. Warsame, 537 F. Supp. 2d 1005 (D. Minn. 2005):  Defendant Mohamed Warsame was charged with providing material support to al Qaeda, and moved to dismiss portions of his indictment on the ground that 18 U.S.C. § 2339B is unconstitutional because it lacks a specific intent requirement.  Id. at 1013.  The court agreed that with Warsame, that 18 U.S.C. § 2339B does not require a specific intent that Warsame intended to further al Qaeda’s terrorist activities, but the court rejected Warsame’s contention that the statute violated his first amendment or due process rights.

U.S. v. Paracha, 2006 WL 12768 (S.D.N.Y. Jan. 3, 2006):  Defendant Uzair Paracha was charged with providing material support and resources to al Qaeda.  Paracha was tried by a jury and convicted on all counts in 2005.  The court’s decision addresses issues that came up during the trial, including the defendant’s requested jury instruction regarding the intent requirement under 18 U.S.C. § 2339B(a)(1).  Paracha contended that the government was required to provide a specific intent that Paracha’s support would further al Qaeda’s unlawful activities.  The court rejected that contention and held that the statute’s requirement, that defendant’s knowledge that he had provided material support or resources to a designated foreign terrorist organization, was not unconstitutional.

U.S. v. Marzook, 383 F. Supp. 2d 1056 (N.D. Ill. 2005):  Defendant Mousa Marzook was charged with providing material support to Hamas, and moved to dismiss the indictment against him on the ground that the material support statute was unconstitutional because (1) it violated the first amendment; and (2) it violated the due process clause of the fifth amendment because it did not require a showing of specific intent.  Id. at 1060.  The court rejected the first amendment argument on the ground that the 18 U.S.C. § 2339B does not target speech or associations or mere membership in a group.  Even if, however, the statute was overbroad, defendant had filed to demonstrate that the over breadth was substantial given its “legitimate reach” and the government interest in preventing terrorism  Id. at 1062-63, 1067-68.  The court then found that the statute sufficiently required intent by requiring that Marzook knowingly provided support to a designated foreign terrorist organization.

2.      Key cases on the freezing of charitable organization assets include:

KindHearts for Charitable Humanitarian Development v. Paulson, No. 3:08 CV 2400.(N.D. Ohio)  On Oct. 9, 2008 the court issued a temporary restraining order barring the Department of the Treasury (Treasury) from designating KindHearts for Charitable Humanitarian Development (KindHearts), a U.S. charity, as a supporter of terrorism without affording the organization basic due process. Treasury shut down the group "pending investigation" in February 2006, but the investigation has never been concluded and the group's assets, including about $1 million, remain frozen.

Islamic American Relief Agency v. Unidentified FBI Agents, 394 F. Supp. 2d 34 (D. D.C. 2005), aff’d in pt and remanded in pt as Islamic Relief Agency v. Gonzales, 477 F.3d 728 (D.C. Cir. 2007):  IARA-USA challenged the blocking of its assets due to OFAC’s designation of a separate entity, IARA, as a terrorist organization.  The district and then the circuit court reviewed OFAC’s actions under the “extremely deferential” “arbitrary and capricious” standard and upheld OFAC’s actions –in the face of unclassified evidence that the court found was “not overwhelming,” and substantial classified evidence to which IARA-USA had no access.  477 F.3d at 734.  The circuit court also rejected IARA-USA’s claim that the blocking of its assets violated its constitutional rights (concluding, inter alia, that OFAC had blocked IARA-USA’s assets “based on OFAC’s funding that IARA-USA is a branch” of a terrorist organization). 

Holy Land Foundation for Relief and Development v. Ashcroft, 219 F. Supp. 2d 57 (D. D.C. 2002), aff’d, 333 F.3d 156 (D.C. Cir. 2003):  The HLF challenged its designation as a terrorist organization and the blocking of its assets.  The district court held, and the circuit court affirmed, that the treasury department’s actions would be held only to the highly deferential “arbitrary and capricious” standard, and since it had met that standard the department did not violate HLF’s substantive due process rights or rights under the Administrative Procedure Act (“APA”).  The courts further held that the government had not violated HLF’s rights by failing to provide notice and a hearing first – even though the Holy Land Foundation had no right to “confront and cross-examine witnesses” and did not have access to classified information that was presented to the district court.  Id. at 164.

In its opinion the district court recognized that the seizure of Holy Land’s property "d[id] raise significant Fourth Amendment [search and seizure] concerns" but held that freezing assets is not a seizure but a "temporary deprivation" of property.  It did suggest that, "Plaintiff may…some day have a credible argument that the long-term blocking order has ripened into vesting of property in the United States."   However, current law does not define when this "vesting" takes place.  Holy Land's funds have been frozen since 2001.

Global Relief Foundation, Inc. v. O’Neill, 207 F.Supp.2d 779, aff’d, 315 F.3d 748 (7^th Cir. 2002): GRF challenged its designation as a terrorist organization the blocking of its assets.  GRF first argued that the IEEPA does not apply to it as a U.S. corporation, since the statute applies to “property in which any foreign country or a national thereof has a foreign interest.”  The circuit court rejected that argument, finding that the word “interest” means a beneficial interest (i.e., “the funds are applied for the benefit of non-citizens”).  315 F.3d at 753-54.  The court also rejected GRF’s challenges that the district court was authorized to review classified evidence, to which GRF did not have access, and that there was no pre-seizure hearing.  Id. at 754.

Benevolence Int’l Foundation, Inc. v. Ashcroft, 200 F. Supp. 2d 935 (N.D. Ill. 2002):  In December 2001, the Treasury Department blocked BIF’s assets, and the FBI searched the offices of BIF and the home of its chief executive officer, Enaam Arnaout.  BIF challenged the FBI’s searches and the blocking of its assets; thereafter, the government filed criminal charges against BIF and Arnaout.  The court stayed BIF’s civil action against Ashcroft et al. pending resolution of the criminal charges.  [Thereafter, charges against BIF were dismissed, and Arnaout pled guilty to a lesser charge of fraud.  BIF did not have funds at that point to file another action to challenge the blocking of its assets.]