TZAC’s legal argument was that the Carter Center, a USAID grantee, defrauded the government because it falsely certified in its grant agreement it had not provided material support to listed groups. The complaint did not allege that USAID funds were used to support the meetings TZAC cited. TZAC said the Carter Center received over $30 million from USAID between 2010 and 2015 and should pay $91,716,000, plus costs and “an appropriate award” to TZAC.
Allegations in the Complaint
The specific allegations of material support in TZAC’s complaint are centered around speech-related activities: a May 2015 meeting in Ramallah and various other “meetings, workshops, round-table discussions and private consultations.”
At the Ramallah meeting the Carter Center hosted representatives of various Palestinian political parties, including Hamas and the PFLP, at its facility. A picture from the meeting included in the complaint shows water bottles, fruit and cookies at the meeting table. TZAC alleges the meeting constituted prohibited material support of terrorism because:
The Hamas and PFLP representatives were supplied with the food and water.
The meeting site provided a physical facility for the meeting to take place.
The meeting gave Hamas and PFLP an “opportunity to network and connect with prominent individuals from other factions.”
In addition, the complaint said that the Carter Center sponsors “meetings, workshops, round-table discussions and private consultations to promote dialogue and discussions among Palestinian factions (including terrorist organizations) with the aim of promoting electoral consensus and general reconciliation.” TZAC says such meetings are inconsistent with the Supreme Court’s 2010 decision in Holder v. Humanitarian Law Project, which said Congress can prohibit services and technical advice and assistance as material support of terrorism, even when it is intended to reduce conflict. TZAC’s complaint said in May 2011 the Carter Center and its local partner, the Arab Thought Forum, organized a meeting that included representatives of Hamas and PFLP, “to assist various Palestinian factions in developing a new electoral code.” TZAC claimed such meetings constitute material support because:
The Carter Center provided the facilities for the meetings to take place, and
If Hamas and the PFLP resolve their differences, “it will free up more resources to engage in terrorism against Israelis.”
The complaint also lists several such meetings that took place before the Supreme Court decision, a period when the lower courts had found application of the material support prohibition to such activities to be unconstitutionally vague and broad.
DOJ’s Motion to Dismiss and Unsealing the Case
DOJ moved to dismiss the case in November 2017. It points out that TZAC did not allege that the Carter Center concealed its activities or failed to meet its obligations under the USAID grants. That same month TZAC filed a motion to unseal the case and open the hearing on the government’s motion to dismiss to the public. It cited provisions of the FCA that provide for a hearing when the government has moved to dismiss, to enable the party bringing the action (relator) to “ensure that the government has a complete and accurate understanding of the full picture of the case” in making its decision to proceed or not. On Jan. 9, 2018 the court granted the motion for a public hearing and unsealed the complaint, motion to dismiss and motion to unseal the case. However other documents filed prior to its order remained sealed.
A hearing set for April 24 was cancelled when TZAC opted to instead meet with DOJ informally in an attempt to change the agency’s position. DOJ filed a notice with the court on May 31 saying it had conducted a “diligent investigation” of the facts and the meeting with TZAC had not changed its position. DOJ’s response is notable for two reasons:
DOJ said there was no allegation that the meeting at issue was funded by USAID or that the Carter Center failed to fulfill its grant obligations to USAID. It also noted that the Carter Center had not concealed its activities.
DOJ said that while TZAC had a “difference of opinion with the Carter Center about how to resolve conflict in the Middle East” its complaint “does not allege facts addressed to the elements it or the United States must prove to establish violations of the FCA.”
In the DC Circuit the government has full discretion on whether or not to pursue False Claims Act cases, so on May 31 the court entered a final and appealable order dismissing the case. TZAC issued a statement saying that while it disagrees with the outcome “there is not much to do about it” and that it will “continue investigating the Carter Center.”