The Holy Land Foundation for Relief and Development (HLF), a Texas-based charity with a mission of providing humanitarian aid in Palestine, was the largest Muslim charity in the United States until its closure in December of 2001. HLF had been legally operating for over a decade before it was designated and shut down by the Bush administration three months after 9/11. Its former officials were convicted of providing material support for terrorism on retrial in November 2008, and received sentences ranging from 15 to 65 years. The case, the evidence, the procedure, and the convictions all highlight the precarious legal position of U.S. nonprofits trying to carry out humanitarian missions.
Though the criminal convictions occurred in 2008, this case has roots that reach much further back. In the early 1990s, the U.S. government obtained warrants under the Foreign Intelligence Surveillance Act (FISA) to monitor the communications of senior HLF officials. In January 1995, the U.S. government designated Hamas as a Specially Designated Terrorist (SDT). This designation meant that all financial transactions with or for the benefit of Hamas were prohibited and all Hamas’s assets within the U.S. were frozen (blocked).
On Dec. 3, 2001, the Treasury Department Office of Foreign Assets Control (OFAC) designated HLF as a Specially Designated Global Terrorist (SDGT), based on information obtained from the FISA warrants that allegedly showed HLF’s support for Hamas. OFAC then froze HLF’s assets and conducted a warrantless seizure of the computers and files in HLF’s offices.
In March 2002, HLF filed a lawsuit in federal court, challenging its designation by raising constitutional and statutory claims. The judge granted government’s motion to dismiss the complaint, except as to their search and seizure claim under the Fourth Amendment. HLF appealed to the U.S. Court of Appeals for the D.C. Circuit, which affirmed in all respects, and directed summary judgment in favor of the government. The D.C. Circuit denied HLF’s petition for rehearing en banc (by the full court). In March 2004, the Supreme Court denied HLF’s petition for certiorari.
In late July 2004, HLF filed a complaint with the U.S. Department of Justice, alleging that the FBI had falsified an affidavit used to support the investigation and designation of HLF and its officers. In response, on July 26, 2004, the government unsealed a criminal indictment of HLF and seven individuals associated with it.
The defendants were charged with conspiracy to provide material support to a foreign terrorist organization (Hamas); providing material support to Hamas, conspiracy to deal in the property of a specially designated terrorist group (Hamas); dealing in the property of Hamas; money laundering; and filing false income tax forms. There was no allegation that HLF gave money directly to Hamas. Instead, the allegations were that HLF gave money to “zakat” committees in Palestine, which the government alleged were not legitimate charities but were instead front organizations controlled by Hamas.
The first trial ended in a mistrial in October 2007, as the jurors deadlocked on all but one of the counts against the defendants. One defendant (El-Mezain) was acquitted on all but one of the counts against him.
In the second trial, before U.S. District Judge Jorge Solis in 2008, a federal jury in Dallas decided that the charity and five men who worked with it were guilty of three dozen counts related to the illegal transfer millions of dollars to Hamas. They were found guilty of supporting terrorism, money laundering and tax fraud. The verdict came after eight days of deliberations and a 42-day trial.
The basic arguments in the second trial were:
- The prosecution, using over 500 documents, videos, bank records, and wiretap records, alleged that HLF wired $12.4 million to Hamas-controlled zakat committees after the group was designated in 1995. The government 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.
- HLF argued that the zakat committees were not on the government’s list of designated terrorist organizations and that HLF made every effort to ensure funds were spent only for charity, on a “need, not creed” basis. The charity further argued that HLF and its leaders were being prosecuted for their political beliefs and associations on the basis of faulty evidence.
On May 27, 2009, U.S. District Judge Jorge Solis handed out sentences. Two of the men, Shukri Abu Baker and Ghassan Elashi were each sentenced to 65 years in federal prison. The others were sentenced as follows: Mohammad El-Mezain (15 years), Mufid Abdulqader (20 years), and Abdulrahman Odeh (15 years). HLF itself, which was unrepresented at trial, was sentenced to one years’ probation. This had little significance, as it remained designated, with its assets frozen, and was unable to renew its activities.
HLF and the five individual defendants filed an appeal in October 2010. Argument before the Fifth Circuit Court of Appeals was held on Sept. 1, 2011. Attorneys for the Holy Land leaders argued that they were unfairly convicted based on what one attorney called a “textbook on evidentiary error.” A new lawyer for the charity itself, which was unrepresented during the trial, argued for a new trial. Ffederal prosecutors argued that the charity should not be allowed to appeal because it is on the terrorist list and therefore cannot engage legal representation.
An amicus brief was also filed by a group of non-profit organizations in the appeal. Amici argued that the court should have required a showing of knowledge of the Hamas connection before the defendants could be convicted. They stressed the point that, since the zakat committees were not on the terrorist list, the lack of a knowledge requirement in the jury instructions would render thousands of foundations and charities in the United States vulnerable to criminal prosecution.
The convictions for material support of terrorism and other charges were upheld by the Fifth Circuit Court of Appeals on Dec. 7, 2011. While this ruling upheld the jury verdict and judgment against the defendants, the Fifth Circuit addressed a number of issues of broader legal significance (Click here for an in-depth summary of this ruling). It recognized the legitimacy of several arguments raised by the defendants as to the improper use of certain categories of evidence at trial.
HLF and its leaders filed petitions for re-hearing of their appeals from criminal. HLF’s request, filed in December 2011, focused on its lack of representation at trial and alleged a Sixth Amendment violation of the right to counsel and the right to confront evidence. The HLF’s leaders’ petition, filed in January 2012, primarily consisted of questions relating to the admission of certain pieces of evidence and the court’s findings of harmless error.
On Feb. 17, 2012, the Fifth Circuit Court of Appeals denied a request for rehearing in the Holy Land Foundation (HLF) appeal. On Oct. 29, 2012, the Supreme Court declined to review the case.
On Oct. 25, 2013 a new attorney for the individual defendants filed a motion to vacate their sentences. The motion argued that the defendants received inadequate assistance of counsel in the trial. It also argued on appeal, that the evidence did not show that Hamas controlled the zakat (charity) committees HLF funded and that the government not only failed to turn over evidence that would have been helpful to the defense, but pursued the prosecution based on the defendants’ religious identity. The motion was only filed on behalf of the individual defendants, so did not seek to overturn the conviction of HLF as a charitable entity.
On March 30, 2015, Judge Jorge A. Solis denied the HLF leaders’ motion to vacate their sentences. Defendants then appealed to the Fifth Circuit on April 10, 2015, and filed a motion for a certificate of appealability in August 2015. The Fifth Circuit denied the motion on July 27, 2016, and denied a subsequent motion for reconsideration on Aug. 17, 2016.
In October 2016, Al Jazeera World produced a two-part documentary titled The Holy Land Five, examining the case through interviews, phone calls, and court documents.
The outcome of the HLF case highlights several serious areas of concern for U.S. nonprofits. The legal standard used by the prosecution and sentences handed down indicate that the environment for U.S. charities and NGOs operating around the world is legally precarious. The HLF sentencing could have a chilling effect on U.S. NGOs operating in international hot spots three ways.
First, despite international human rights norms that bar aid discrimination based on religion, political affiliation or any factor other than need, the convictions in the HLF trial and the prosecution’s arguments indicate that potential association with terrorist organizations is a factor in determining eligibility for aid.
Second, the process for determining which foreign organizations that U.S. NGOs are legally authorized to associate with is unclear. During the trial, a witness from OFAC testified that it can be illegal to deal with groups that have not been designated as supporters of terrorism and placed on government watchlists. He said that keeping up with front groups “is a task beyond the wise use of resources.” (The zakat committees HLF was convicted of working with have still never been placed on the U.S. government’s list of organizations supporting terrorism.)
Third, approximately $5 million in HLF funds were frozen by the government during this investigation and trial and may be forfeited to the government. There is no process for the funds to be released or distributed in a manner that honors the donors’ charitable intent. See here for more information.
Although the case if frequently cited, there is little awareness that HLF was unrepresented during the trial that ended in its conviction. The issue of its representation reveals a major gap in the law. Because HLF is on the terrorist list all transactions with it, including legal representation, are illegal, so that there was no one authorized to hire legal counsel. In addition, because HLF’s leaders were co-defendants in the criminal trial, there was a conflict of interest between them and HLF, since HLF could have had different arguments and evidence in the trial. For more information, click here.