Terror financing and prosecution in the United StatesAs international terrorism increasingly became a concern of the United States, prosecuting those who illegally financed terrorist organizations remained at a relative standstill before 2001
By Brooke Goldstein
On December 4, 2001, President George W. Bush announced at a White House news conference that, "those who do business with terror will do no business with the United States—or anywhere else the United States can reach." President Bush notified the public that at midnight on the previous day, "the Treasury Department froze the assets and accounts of the Holy Land Foundation in Richardson, Texas, whose money is used to support the Hamas terror organization."
The targeting of the Holy Land Foundation, at the time the largest Islamic charity organization in the United States, was a significant moment for the interdiction of terrorist financing, even as the United States was focused not just on Hamas, but al-Qaeda and other terrorist groups. U.S. interest in terror financing did not begin on 9/11.
On October 7, 1985, two years before the Muslim Brotherhood founded Hamas, four members of the Palestine Liberation Front hijacked an Italian cruise ship (the Achille Lauro) and issued a demand that Israel release several imprisoned terrorists. They shot a wheelchair-bound passenger from the United States named Leon Klinghoffer, and dumped his body overboard before Egyptian President Hosni Mubarak negotiated an end to the standoff.
The murder of Klinghoffer, combined with the bombing of Pan Am Flight 103 in 1988, would lead to the Antiterrorism Act (ATA) of 1990 and its successor in 1991. The ATA extended U. S. jurisdiction over international acts of terrorism, and was expanded in 1994 with the addition of two statutes that criminalized providing "material Support or resources" to foreign terrorist organizations. The current form of the statute defines material support and resources as "any property, tangible or intangible, or service, including currency or monetary instruments…financial services…expert advice or assistance, safe houses…weapons, lethal substances, explosives, and transportation, except medicine or religious materials."
Recognizing that claimed "humanitarian aid" could constitute material support just as much as armaments, Congress expanded the definition of material support in 1996 with the enactment of the Antiterrorism and Effective Death Penalty Act (AEDPA). As the U.S. Supreme Court recently stated in Holder v. Humanitarian Law Project, "that repeal [i.e., the exception of 'humanitarian aid' from material support categories] demonstrates that Congress considered and rejected the view that ostensibly peaceful aid [to terrorist groups] would have no harmful effects." Indeed, Congress deliberately crafted a broad description for material support because it found that "foreign organizations that engage in terrorist activity are so tainted by their criminal conduct that any contribution to such an organization facilitates that conduct (italics added)." This is because terrorist organizations "systematically conceal their activities behind charitable, social, and political fronts." In fact, these groups often pursue objectives through dual tracks of violent crime in tandem with nonviolent public maneuvering.
Yet, as international terrorism increasingly became a concern of the United States, prosecuting those who illegally financed terrorist organizations remained at a relative standstill before 2001. As the 9/11 Commission Report pointed out in 2004, "Before 9/11, Treasury did not consider terrorist financing important enough to mention in its national strategy for money laundering."
Against this backdrop, a tax-exempt charity was established in 1989 in the state of California, initially called the Occupied Land Fund, subsequently renamed the Holy Land Foundation for Relief and Development (HLF), which then relocated to Texas.
In 1995 Hamas was identified by President Bill Clinton as a "terrorist organization which threaten[s] to disrupt the Middle East Peace Process," as was Mousa Mohamed Abu Marzook, a Hamas political leader who had "designated HLF as the primary fundraising entity for HAMAS in the United States." While Hamas continued to target civilians and recruit Palestinian children as suicide bombers, HLF continued to thrive, raising $13 million in the year 2000 alone. In total, the Justice Department estimated that HLF and its members sent approximately $12.4 million to Hamas from 1995 onward.
After the 9/11 attacks, domestic "charities" were scrutinized more closely. In December 2001 the U.S. Treasury Office of Terrorism and Financial Intelligence (TFI) identified HLF under Executive Orders 13224 and 12947 as a "charity that provided millions of dollars of material and logistical support to HAMAS" and then moved to shut down the foundation for good.
In 2002 a federal grand jury in Dallas returned indictments against Abu Marzook and his wife Nadia Elashi, as well as "the INFOCOM Corporation, along with INFOCOM Vice President Ghassan Elashi," who served as chairman of the Holy Land Foundation, and four of his brothers, all employees of INFOCOM." Infocom was a computer and Internet services company begun with seed money from Abu Marzook, and which "continued to engage in financial transactions with Marzook after his designation as a terrorist, in violation of the International Emergency Economic Powers Act (IEEPA)."
Almost two years later, in July 2004, a federal grand jury released a 42-count indictment that accused HLF of Supporting "HAMAS activities through direct fund transfers to its offices in the West Bank and Gaza that are affiliated with HAMAS and transfers of funds to Islamic charity committees ("zakat committees") and other charitable organizations that are part of HAMAS or controlled by HAMAS members." Abu Marzook has thus far eluded imprisonment, and currently holds the title of "Deputy Political Bureau Chief of HAMAS, operating out of Damascus, Syria." After an initial mistrial in 2007, the Elashi brothers and several HLF officers were convicted of various terror-related charges and sentenced to prison. (See appended chart A for HLF officers, and chart B for the Elashi brothers' two trials, in 2004 and 2005.)
Perhaps more notable than the HLF defendants themselves was an 11-page list of unindicted coconspirators released by the Dallas federal court in 2007.In addition to a list of individuals and entities who were "part of the HAMAS' social infrastructure in Israel and the Palestinian territories," or otherwise connected to Hamas, the list included three organizations as being or having been "members of the US Muslim Brotherhood," namely the Islamic Society of North America (ISNA), the Muslim Arab Youth Association (MAYA), and the North American Islamic Trust (NAIT). Another prominent domestic organization, the Council on American Islamic Relations (CAIR), was also identified as a member of the "US Muslim Brotherhood's Palestine Committee and/or its organizations."
Despite their status as unindicted coconspirators, these organizations remain active in the United States today. Most disturbingly, NAIT, MAYA, and ISNA have been granted nonprofit status by the Internal Revenue Service; donations to each organization are tax exempt.
CAIR continues to function though the Federal Bureau of Investigation (FBI) suspended formal contacts with the organization in 2008 because of its unindicted coconspirator status. Yet, as the Investigative Project on Terrorism noted in 2010, "Two recent episodes show that, despite this rhetoric and linking CAIR to a Hamas support network — in addition to unresolved questions about its current connections — government agencies continue to engage with the group, even sending its officials abroad to represent the U.S."
Despite its ongoing connections with the government, CAIR printed and publicly distributed flyers telling Muslims to "build a wall of resistance, don't talk to the FBI" and filed a class action suit over allegedly illegal FBI surveillance of Muslim communities in Southern California over a 14-month period. Some Muslim communities have investigated CAIR themselves.
In his recent testimony to the Committee on Homeland Security, Abdirizak Bihi, director of the Somali Education and Social Advocacy Center in Minneapolis, identified CAIR as deliberately impeding the Somali American community's attempts to discover the whereabouts of missing children it feared had been radicalized and recruited by terrorist groups: CAIR held meetings for some members of the community and told them not to talk to the FBI, which was a slap in the face for the Somali American Muslim mothers who were knocking on doors day and night with pictures of their missing children and asking for the community to talk to law enforcement about what they know of the missing kids.
Despite the fact that unindicted coconspirators continue to operate in the United States, the HLF prosecution certainly constituted a watershed moment in the development of terror finance prosecution; the Seventh Circuit en banc ruling in a 2009 civil suit filed against HLF and several others by the family of David Boim, a 17-year-old American murdered by Hamas in 1997, solidified further the liability of groups that finance terrorism.
Although courts have not yet explicitly considered how to define the chain of liability when multiple organizations transmit funds to ultimately aid a foreign terrorist organization (FTO) in his opinion in the Boim case, Judge Richard Posner of the Seventh Circuit Court of Appeals provided an easily understandable formula to determine the liability chain:
…donors to terrorism [should not] be able to escape liability because terrorists and their supporters launder donations through a chain of intermediate organizations. Donor A gives to innocent-appearing organization B which gives to innocent-appearing organization C which gives to Hamas. As long as A either knows or is reckless in failing to discover that donations to B end up with Hamas, A is liable. Equally important, however, if this knowledge requirement is not satisfied, the donor is not liable. And as the temporal chain lengthens, the likelihood that a donor has or should know of the donee's connection to terrorism shrinks. But to set the knowledge and causal requirement higher than we have done in this opinion would be to invite money laundering, the proliferation of affiliated organizations, and two-track terrorism (killing plus welfare). Donor liability would be eviscerated, and the statute would be a dead letter.
The Supreme Court's ruling in Holder further cited Hamas as an example of how to "muddy the waters" by using "its overt political and charitable organizations as a financial and logistical support network for its terrorist operations."
Despite these developments, loopholes remain in the framework of U.S. law that will likely not be closed until there is another case comparable to HLF in size and scope.
The 9/11 commission noted, "trying to starve the terrorists of money is like trying to catch one kind of fish by draining the ocean." The nautical metaphor is particularly apt after the Muslim Brotherhood affiliate Union of Good (an umbrella group of charities designed to funnel money to Hamas and whose leader is unindicted coconspirator Youssef al-Qaradawi) was involved with a "freedom flotilla" of ships designed to break Israel's counter-terror naval blockade of Hamas-controlled Gaza Strip in May 2010. Given the evolving nature of terrorism and terror finance, it is highly likely that laws and judicial doctrines will be needed to evolve apace. Looking to the HLF case as an example, there is reason to be encouraged that this will occur, so long as the government remains committed to prosecuting channels of terror finance.
ABOUT THE AUTHOR
Ms. Goldstein is a human rights attorney, an award-winning documentary film producer, serves as director of The Lawfare Project, and is the founder and director of the Children's Rights Institute.
Mr. Meyer is research director of The Lawfare Project, director of research for the Children's Rights Institute, and legal correspondent to the Terror Finance Blog.
1 Attorney General Transcript, News Conference with President Bush and Treasury Secretary O'Neill. Http://www.justice.gov/archive/ag/speeches/2001/1204newsconferencewithbush.htm
3 "Hamas," Council on Foreign Relations, updated August 27, 2009. Http://www.cfr.org/israel/hamas/p8968
4 "Terror aboard the Achille Lauro," Mitchell Bard. Http://www.jewishvirtuallibrary.org/jsource/Terrorism/achille.html
5 "Due to an enrolling error, the ATA was enacted into law on November 5, 1990 as part of the Military Construction Appropriations Act--Public Law 101-519." Statement by Senator Charles Grassley, Congressional Record, April 16, 1991. http://www.fas.org/irp/congress/1991_cr/h910416-terror.htm the law was repealed on purely Technical grounds and passed again in 1991.
6 18 U.S.C. § 2339A and § 2339B, "Providing material support to terrorists" and "Providing material support or resources to designated foreign terrorist organizations," respectively.
7 18 U.S.C. §2339A(b)(1).
8 130 S.Ct. 2705, 2725 (2010).
9 Holder, 130 S. Ct. at 2712 (emphasis added).
10 Id. At 2725.
12 The Holy Land Foundation for Relief and Development. U.S. Treasury - Office of Terrorism and Financial Intelligence (TFI). Http://www.treasury.gov/resource-center/terrorist-illicit-finance/Pages/protecting-charities_execorder_13224-e.aspx#hlf
13 Executive Order 12947 of January 23, 1995, "Prohibiting Transactions With Terrorists Who Threaten To Disrupt the Middle East Peace Process" http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=1995_register&docid=fr25ja95-126.pdf
14 See FN 9 above.
15 See FN 9,above.
16 Holy Land Foundation, Leaders, Accused of Providing Material Support to Hamas Terrorist Organization, Department of Justice, July 27, 2004. Http://www.justice.gov/opa/pr/2004/July/04_crm_514.htm
17 The Holy Land Foundation for Relief and Development. U.S. Treasury - Office of Terrorism and Financial Intelligence (TFI). Http://www.treasury.gov/resource-center/terrorist-illicit-finance/Pages/protecting-charities_execorder_13224-e.aspx#hlf
18 "Senior Leader of Hamas and Texas Computer Company indicted for Conspiracy to Violate U.S. Ban on Financial Dealings with Terrorists" Department of Justice, December 18, 2002. Http://www.justice.gov/opa/pr/2002/December/02_crm_734.htm
20 See FN 9, above.
21 "Individual Terrorists: Mousa Abu Marzook," The Investigative Project on Terrorism, updated August 4, 2009. Http://www.investigativeproject.org/profile/106
22 Note that HLF has appealed its conviction to the Fifth Circuit Court of Appeals. See "Government Rebuts Convicted Hamas Charity's Appeal," IPT News, February 2, 2011. Http://www.investigativeproject.org/2549/government-rebuts-convicted-hamas-charity-appeal
23 "List of Unindicted Co-conspirators and/ Or Joint Venturers," May 29, 2007 http://www.nefafoundation.org/miscellaneous/HLF/US_v_HLF_Unindicted_Coconspirators.Pdf
[Last accessed March 17, 2011]
25 "http://www.irs.gov/app/pub-78/searchFromResults.do?nameSearchTypeStarts=true&names=Muslim+Arab+Youth+Association+&nameSearchTypeAll=true&city=&state=All...&country=USA&deductibility=all&dispatchMethod=search&searched.NameSearchTypeStarts=true&searched.names=North+American+Islamic+Trust&searched.nameSearchTypeAll=true&searched.city=&searched.state=All...&searched.country=USA&searched.Deductibility=all&searched.SortColumn=name&searched.IndexOfFirstRow=0&searched.isDescending=false&submitName=Search [Last accessed March 17, 2011]
26 http://www.irs.gov/app/pub-78/search.do?nameSearchTypeStarts=true&names=islamic+society+of+north+america&nameSearchTypeAll=true&city=&state=All...&country=USA&deductibility=all&dispatchMethod=search&submitName=Search [Last accessed March 17, 2011]
Letter from Richard C. Powers, FBI Assistant Director of the Office of Congressional Affairs to Senator Jon Kyl, April 28, 2009. http://www.investigativeproject.org/documents/misc/265.pdf
See also "FBI Cuts Ties With CAIR Following Terror Financing Trial," Joseph Abrams, FoxNews.Com, January 20, 2009. Http://www.foxnews.com/politics/2009/01/30/fbi-cuts-ties-cairfollowing-terror-financing-trial/
27 "CAIR – Suspected and Supported by the Federal Government," IPT News, July 30, 2010. Http://www.investigativeproject.org/2082/cair-suspected-and-supportedby-the-federal
29 "CAIR sues DBI for allegedly illegal surveillance of Muslims in Southern California," Caroline May, The Daily Caller, February 24, 2011. Http://dailycaller.com/2011/02/23/cair-sues-fbi-for-allegedly-illegal-surveillance-of-muslims-in-southern-california/
30 "The Extent of Radicalization in the American Muslim Community and that Community's Response," March 10, 2011. Http://homeland.house.gov/sites/homeland.house.gov/files/Testimony%20Bihi.pdf
32 See, e.g., Laura B. Rowe, Ending Terrorism with Civil Remedies: Boim v. Holy Land Foundation and the Proper Framework of Liability, 4 SEVENTH CIRCUIT REV. 372 (2009), at http://www.kentlaw.edu/7cr/v4-2/rowe.pdf.
33 Boim v. Holy Land Found. For Relief & Dev., 549 F.3d 685, 701-02 (7th Cir. 2008). Note that Judge Posner was considering civil liability that may arise under 18 U.S.C. § 2339B and related statutes, though he noted elsewhere that the analysis was similar for criminal and civil liability for material support claims.
34 See FN 7 above.
35 Holder at 2725, quoting Matthew Levitt, Hamas: Politics, Charity, and Terrorism in the Service of Jihad p. 2 (2006). Incidentally, Levitt was unsuccessfully sued by KinderUSA in 2007 for including "KinderUSA among "other American-based charities [which] continue to fund Hamas" after the Holy Land Foundation closed its doors." "Combating Lawfare," IPT News, March 15, 2010. Http://www.investigativeproject.org/1858/combating-lawfare
36 Report at p. 382. See FN 8 above.
37 "A New Jihad Flotilla initiative to Gaza," Jonathan Fighel
International Institute for Counter-Terrorism July 4, 2010 http://www.investigativeproject.org/2045/a-new-jihad-flotillainitiative-to-gaza