In the post-9/11 era, litigation involving counterterrorism laws like the USA PATRIOT ACT and nonprofit rights has had a significant impact on how the law is applied and the ability of U.S. charities doing humanitarian, development, peacebuilding, human rights and similar work to operate effectively. This section provides overview and analysis of the major counterterrorism cases affecting nonprofits. Below you will find all of these cases organized under one of six main themes: As you navigate to each case, you will find a page giving a case overview and any important developments or analysis related to it, along with a list of additional resources. 


Material Support

18 U.S.C. §2339 prohibits the provision of broadly defined “material support” to designated terrorists and groups.

Holder v. Humanitarian Law Project

The U.S. Supreme Court ruled that training, expert advice or assistance for designated groups is not protected speech and falls within the prohibition on material support of terrorism, even when it is for the purpose of building peace and support for nonviolence. Read more.

USA v. Holy Land Foundation for Relief and Development

Charity’s leaders were convicted of providing material support to terrorists and given lengthy prison sentences, even though the zakat committees that received aid were not on a government list. This case also raised evidentiary and due process concerns. Read more.

 

Due Process & Designation

To designate a group and freeze its assets, the government only needs a “reasonable suspicion” that it is providing support to terrorists. The groups’s assets can be frozen pending an investigation. 

KindHearts for Charitable Humanitarian Development, Inc. v. Geithner

Following a federal court ruling that freezing the charity’s assets pending investigation of alleged terrorist support was an unlawful seizure, the government reached a settlement in which they agreed to delist the charity and unfreeze their assets so they could be distributed. Read more.

Al-Haramain Islamic Foundation v. U.S. Department of the Treasury

A federal appeals court held that the Fifth Amendment’s guarantee of due process requires Treasury to give adequate notice of the reasons for putting a charity on the terrorist list, as well as a meaningful opportunity to respond. The court also ruled that freezing the group’s assets amounts to a Fourth Amendment seizure and that the term “material support” of terrorism is unconstitutionally vague. Read more.

USA v. Chiquita Banana

In contrast to standards applied to charities, this corporation was allowed to enter into a plea deal and pay a fine after admitting it paid terrorists for protection in Columbia even though they knew the payments were illegal. Read more.

Yassin A. Kadi v. Paulson

Kadi’s court challenges to his placement on terrorist listings in the EU and the U.S. produced different results, with U.S. courts rejecting his constitutional claims. Read more.

 

Surveillance

Nonprofits assert that domestic surveillance violates their First, Fourth and Fifth Amendment rights and fall outside authority granted by the PATRIOT Act.

Al-Haramain Islamic Foundation v. Bush; Al-Haramain Islamic Foundation v. Obama

A federal judge ruled the phone conversations of the charity with two of its American lawyers were illegally wiretapped. Read more.

First Unitarian Church of Los Angeles v. National Security Agency

A lawsuit filed by 24 nonprofits (including the Charity & Security Network) challenges the NSA’s bulk collection of communication data. Read more.

Sanctions

U.S. listing of terrorists is part of a broader sanctions regime that bans payments, exports and services to certain countries, regions, economic sectors, persons and entities.

USA v. Mehrdad Yasrebi and Child Foundation

A charity and its leader were charged with sending funds to Iran in violation of U.S. sanctions and falsifying documents in a coverup. Read more.

Financial Access

The practice known as bank derisking has hampered the ability of NPOs to fund their programs abroad.

Life for Relief & Development v. Bank of America, NA

A federal lawsuit alleging bank derisking of charity accounts based on Arab ethnicity was unsuccessful. Read more.

Lawfare

These lawsuits brought by individuals or groups steer valuable resources away from lifesaving work in an attempt to push forth a political agenda.

USA ex rel. TZAC, Inc. v. American University in Beirut

AUB agreed to pay $700,000 after TZAC alleged that its journalist training program included people on OFAC’s SDN list. Read more.

USA ex rel. TZAC, Inc. v. Norwegian People’s Aid

NPA settled a federal lawsuit that alleged two of its projects – democracy training for youth in Gaza and mine clearing in Iran – violated the terms of its USAID grant agreement in which it stipulated that it did not provide material support to terrorists. The grant was to provide emergency aid in South Sudan. Read more.

USA ex rel. TZAC, Inc. v. The Carter Center, Inc.

TZAC was unsuccessful in its False Claims Act lawsuit alleging that the Carter Center provided material support to terrorists when it held a meeting in which refreshments were served, contrary to the terms of its grant agreement with USAID. The case was dismissed before trial at the request of DOJ. Read more.

USA ex rel. TZAC, Inc. v. Oxfam GB

TZAC filed a notice of voluntary dismissal after DOJ moved to dismiss the lawsuit in which TZAC alleged that an Oxfam project supports ministries tied to Hamas (which is on the U.S. terrorist list) and the Palestinian Authority (which is not), contrary to the terms of its grant agreement with USAID. Read more.

Jewish National Fund, et al. v. Education for a Just Peace in the Middle East (US Campaign for Palestinian Rights)

JNF and 12 Americans living in Israel allege that USCPR is liable under the Anti-Terrorism Act for damages due to injuries from attacks in Israel because it collects funds from U.S. donors for the Boycott National Committee in Palestine, whose membership includes a coalition that includes Hamas. Read more.

State of New York ex rel. TZAC, Inc. v New Israel Fund

This TZAC lawsuit filed in New York state court challenges the tax-exempt status of the New Israel Fund, a U.S.-based grantmaking organization and alleges that NIF violated state tax laws by unlawfully interfering in Israeli elections. Read more.

Miscellaneous

 

U.S. v. Mubayyid (Care International)

Three former charity officials were convicted of conspiracy to defraud the IRS because they did not include a description of their newsletter content in their tax-exempt status application and annual IRS filings – the government alleged that the group supported jihadist movements in its articles. Read more.

U.S. v. Pirouz Sedaghaty (Pete Seda)

The co-founder of the Al-Haramain charity was sentenced to 33 months in prison for tax evasion and conspiracy to defraud the government following a trial in which the government was criticized for its mishandling of the case. Read more.