As the 111th Congress drew to a close in December 2010, two bills were introduced that address critical fairness issues for U.S. charities in the context of national security law. One, filed on Dec. 16 by Rep. Keith Ellison (D-MN), would create due process for U.S. charities accused of supporting terrorism. The other, filed on Dec. 20 by Sen. Benjamin Cardin (D-MD), addresses procedures for dealing with classified information in federal criminal proceedings. Although both bills expired at the end of the old Congress, they signal their sponsors’ intentions to pursue the issues in the upcoming Congress.
Ellison’s “Procedures for Sanctions Against Charities Act” (HR 6532) addresses constitutional deficiencies federal courts have found in the Department of Treasury’s (Treasury) current process for shutting down charities it believes support terrorism. The bill was referred to the House Foreign Relations Committee.
The bill draws on procedures in the Civil Asset Forfeiture Reform Act to comply with Fourth Amendment protection against unreasonable search and seizure. As a result, charitable assets could not be seized and frozen without a court finding there is probable cause to believe the assets would be transferred outside U.S. jurisdiction if notice of the investigation is provided to a charity. The bill has an emergency exception that allows the government to freeze assets for up to 48 hours prior to making a probably cause showing in court.
When courts do find probable cause the act allows a variety of remedies, including appointment of conservators, which may make it possible to “preserve the availability of the property that is subject to the warrant.” This may mean that assets would not need to be frozen if they can be protected another way.
The bill creates a straightforward requirement to let the charity know why sanctions against it are being considered, so that it can prepare a response. The focus is on compliance: notice must set forth “the steps the charity may take to avoid imposition of the sanction.” In addition, the charity must be provided with a hearing on the record within 60 days after receiving the notice.
Under the bill the government would be required to review orders to freeze charitable property every two years “to ensure that the basis for imposing the sanction remains valid” and provide the charity a hearing on the record during such a review.
It also provides for an administrative appeal under the Administrative Procedures Act and appeal to the federal courts. In appeals to the courts the entire case will be reviewed, and the court will not be limited to the question of whether or not the government action was based on legal error. Instead, the burden would be on the government to demonstrate by a preponderance of the evidence that a charity should be subject to IEEPA sanctions, rather than imposing sanctions based only a reasonable suspicion.
The act says seized information and other property of a charity may only be made available to “appropriate law enforcement agency pursuant to the Federal Rules of Criminal Procedure.” U.S. charities that have already been shut down would be required to be notified “of the facts, events, persons and other relevant information that served as the basis for imposing the sanction” within 45 days of passage of the act” and granted an opportunity to appeal.
Cardin’s Classified Information Procedures Reform Act (S 4050) is intended to improve protection of classified information and protect due process rights of defendants in federal criminal trials. These procedures could impact charities, either in potential prosecutions for providing material support to terrorist organizations, or if they are incorporated into other contexts, such as challenging a Treasury designation to a terrorist list. Cardin’s statement upon introducing the bill is here.