On Nov. 24, 2008 the two-month retrial against the Holy Land Foundation for Relief and Development (HLF) and five of its leaders ended with guilty verdicts on charges of supporting Hamas, which was designated as a terrorist organization in 1995. The convictions came even though the prosecution admitted that all funds went to local charities, called zakat committees, that are not on government watchlists. Attorneys for the defendants said they would appeal.

HLF was shut down in 2001 by the Department of the Treasury (Treasury), which accused the group of supporting Hamas, and the organization’s assets were frozen. In 2004, the group and five leaders were indicted, and the first trial ended in a hung jury in October 2007. In the retrial, prosecutors dropped charges from 197 counts to 108 counts of supporting terrorism, money laundering, conspiracy, and tax fraud. There was a different judge, U.S. District Court Judge Jorge Solis, and some new witnesses and evidence at the retrial. Otherwise, the basic arguments were the same on both sides:

  • The prosecution, using over 500 documents, videos, bank records, and wiretap records, said HLF wired $12.4 million to Hamas-controlled zakat committees after the 1995 designation. It did not allege that HLF supported violent acts and admitted the funds were used for hospitals, schools, and charitable programs. However, the prosecutor told jurors not to be distracted by this fact, since it is illegal to support Hamas with any kind of resources.
  • The defense argued that the zakat committees were not on the government’s list of illegal groups and that HLF made every effort to ensure funds were spent only for charity, on a “need, not creed” basis.

The jury deliberated for eight days. After the verdicts were announced, the defendants were taken into custody. They could receive up to 15-20 years imprisonment for each count.

HLF’s Assets: Forfeited to the Government or Used for Charity?

The judge asked the jury to decide whether HLF’s assets should be forfeited to the government, since money laundering charges are involved. The jury found both HLF and the five defendants liable for the $12.4 million they determined was illegally funneled to Hamas. The defense will be moving to stay forfeiture pending appeal. It is unclear what HLF funds remain in the accounts blocked by Treasury, but estimates are in the $5 million range. There is also real property located in California.

Forfeiture of charitable assets raises unique issues and problems, since under traditional charity law principles, these assets can only be used for charitable purposes. The forfeiture provisions in money laundering laws were passed to prevent convicted criminals such as drug kingpins and organized crime from enjoying the financial benefits of their crimes. In this case, forfeiture prevents refugees and others in need from receiving aid intended by donors.

The Zakat Committees: Not on Government Watchlists

The defense argued that it was not illegal for HLF to deliver aid through zakat committees because they have never been designated as supporters of terrorism by the U.S. The question of whether or not it was legal for HLF to work with the zakat committees is central to the case. Robert McBrien from Treasury’s Office of Foreign Assets Control, a new witness, told the jury that designation is not necessary and that keeping up with front groups “is a task beyond the wise use of resources.” Instead, he said Treasury targets umbrella groups. However, since Treasury has known about these particular groups since at least 2004 when it indicted HLF, that rationale does not explain Treasury’s continuing failure to designate the groups. According to AlterNet, the same zakat committees have received aid from the International Red Cross and the U.S. Agency for International Development.

Treasury’s legal theory makes it impossible for U.S. charities operating abroad to protect themselves by checking local charity partners against the list of designated supporters of terrorism. The threat of being shut down by Treasury has already discouraged international programs from operating in conflict zones, and now the potential for severe criminal sanctions could further exacerbate this situation.

After Hamas was designated in 1995, HLF hired a former member of Congress from Texas, John Bryant, to help the group communicate with Treasury about what groups were off-limits. Bryant testified that Treasury rejected their attempt to obtain guidance. The lack of known evidence about zakat committee ties to Hamas was described by another defense witness, Edward Abington, former U.S. consul general in Israel between 1993 and 1997. In the first trial, he testified that while in Israel, he got daily intelligence briefings on security threats and was never told Hamas controlled charities. In this trial, the CIA barred him from referring to his past affiliation with it. As a result, Abington was only able to refer to “government” briefings that did not include references to the zakat committees. The defense called this “a blatant attempt to interfere with the defendant’s Fifth and Sixth Amendment rights to present a defense.”

The prosecution alleged that the zakat committees were staffed and controlled by Hamas, using detailed charts to show Hamas affiliations with zakat committee leaders. In an unusual and controversial move, the government had two Israeli intelligence officials testify anonymously about documents and items seized in their raids on the zakat offices between 2002 and 2004. These items included key chains and other memorabilia memorializing suicide bombers. The judge overruled defense objections, and use of the anonymous witnesses is expected to be a major issue in the appeal.

More on the Evidence

To counter the defendants’ argument that there is no criminal violation when all funds are used to support charitable programs, hospitals, and schools, the prosecution presented a new witness, Georgetown University professor Bruce Hoffman, as an expert on terrorism. He told the jury that throughout history, terrorist groups have used charities as fronts to raise money and build good will “almost without exception.”

The prosecution spent the first four of its five weeks presenting witnesses and evidence that focused on the defendants’ political views about the conflict in the Middle East and their ties to suspected militants. It also showed videos of violent attacks, although the defendants were not accused of violent acts. Much of this evidence centered on events that took place before Hamas was designated as a terrorist organization. For example, FBI agent Lara Burns testified about a 1993 meeting in Philadelphia attended by HLF representatives, which Hamas sympathizers are also alleged to have attended. Another FBI agent, Robert Miranda, testified about HLF-sponsored fundraising events and Palestinian festivals that included Hamas leaders and speakers. Other evidence focused on the defendants’ political views and the “jihadist” content of songs and skits at these events.

Evidence about HLF communications with Hamas after the 1995 designation included a 1997 fundraising conference call with two alleged Hamas speakers, including one who praised a Hamas bomb maker. An ex-HLF employee, Mohamed Shorbagi, also testified that HLF raised money for Hamas at Palestinian festivals and by sending money via the zakat committees after 1995. The defense said Shorbagi lied in order to get a potential life sentence reduced to seven years in a deal that required him to plead guilty to using HLF to support Hamas.

The defendants presented two expert witnesses, Dr. John Esposito, a Georgetown professor and expert on Islam, and Dr. David McDonald, a professor at Indiana University and an expert on Palestinian culture and folklore. Their testimony sought to set the evidence about the content of songs and statements in context. For example, Esposito said the traditional meaning of the word “jihad” relates to spiritual struggle, not violence, and “economic jihad” refers to giving to the poor.

Expert: Rulings Diminish Charitable Giving and Impact

Donors are growing increasingly weary as court decisions against charities have created an environment of suspicion for numerous Muslim charities. The decrease in contributions will lead to smaller numbers of people receiving relief.

Verdicts such as the one delivered in the Holy Land Foundation trial have caused many Muslim charities to suffer decreases in charitable giving. Since September 11, 2001, several Muslim charities have been shutdown by the government for having connections to Middle Eastern countries.

“Either you risk having your group shut down, your funds frozen and your leaders prosecuted by providing aid in international hot spots where people are neediest, or you stay away to stay safe, said Kay Guinane, Program Manager of the Charity and Security Network. “Neither choice is acceptable for a society that prides itself on its respect for human life,” she added.

Another direct consequence from the uncertainty surrounding many Muslim charities is misguided relationships between the private and public sector. Explained here in greater detail, deals such as the one between USAID and The American Charities for Palestine can result in charitable groups being perceived not as independent actors, but as part of a broader U.S. foreign policy or military objective. This unnecessary entanglement with the government will lead to the politicizing of humanitarian aid and potentially dangerous situations for relief workers in conflict zones.

“This creates a fundamental catch-22 for all U.S. charities and grant-makers that do any kind of international work, Guinane said.

An article with further details is available here.