As U.S. government watchlists have steadily become a central counterterrorism measure, from the Treasury Department to USAID, their use has attracted scrutiny from government auditors and nonprofits. Critics call the lists inaccurate, incomplete and inefficient. Fueled by several internal government reports and audits finding numerous problems, complaints range from problems created for people with similar names to persons on the lists to incomplete or error filled lists being used to vet NGOs receiving USAID funds. Widespread dissatisfaction has reached Congress, where a bill providing redress for being incorrectly placed on the list passed House of Representatives in early 2009. It is time to re-think the role of watchlists in counterterrorism strategy, and not just try to fix a broken system.
A May 2009 audit by the Department of Justice’s Office of Inspector General (OIG) documented the high error rate and dysfunction of the government’s central terrorist watchlist. In response the ACLU has called for Congressional oversight, and Sen. Patrick Leahy (D-VT) called the situation “unacceptable.” The report reveals that in 72 percent of the cases examined, the FBI failed to remove subjects no longer under suspicion from the list in a timely manner. Overall the audit revealed a 35 percent error rate and significant deficiencies in the process of adding or erasing records. The audit also raises significant questions for U.S. nonprofits, since the Department of Treasury Anti-Terrorist Financing Guidelines for charities and USAID’s proposed Partner Vetting System (PVS) promote list checking. For more on why PVS is dangerous for U.S. NGOs, read the Issue Brief: USAID Must Consider Alternative Vetting Procedures.
On Feb. 4, 2009 the U.S. House of Representatives passed H.R. 559, the Fair, Accurate, Secure, and Timely Redress Act, that would create a process for individuals placed on government watch lists to challenge their classification. The bill is a response to complaints that overbroad and inaccurate lists have denied many innocent Americans of basic benefits and rights, including flying on commercial planes, getting credit or jobs. If it becomes law, the process established in the bill could be a model for creating due process rights for charities accused of supporting terrorism.
Even the Internal Revenue Service has been encouraged to use government watchlists. On May 21, 2007, the Treasury Inspector General for Tax Administration (TIGTA) issued a report criticizing the IRS for not using the FBI’s Terrorist Screening Center’s (TSC) consolidated watch lists to check nonprofit tax filings for possible matches to suspected terrorists. The TIGTA report primarily addressed inefficiencies in the IRS process, including failure to automate its list checking and manually screening tax-exempt status applications (Form 1023) and annual information reports (Form 990) for “Middle eastern sounding names.” Nonprofits wrote a letter to Treasury Secretary Henry Paulsen in 2007 objecting to the plan and to the TIGTA claim that charities are a significant source of terrorist financing.