Senate Finance Committee Continues Review of Charities for Terrorist Financing Issues

By Andrew Cochran

In December 2003, the chairman and ranking member of the U.S. Senate Finance Committee, Sen. Charles Grassley and Sen. Max Baucus, respectively, requested federal tax information from the IRS about a number of charities in connection with an investigation into terrorist financing (Acrobat file). The letter stated, "The federal government and the Congress have identified several countries � some of which, ostensibly, are our allies � particularly in the Middle East, as a primary source of funds for charities and foundations that are under investigation or have fallen under suspicion for terrorist financing." The committee is authorized under law to receive and review such information for use in oversight and legislation. The charities included several shut down by federal authorities after the 9/11 attacks, including the Global Relief Foundation and Benevolence International Foundation, and a number of those operating currently, including Kind Hearts and the Islamic Society of North America (ISNA). After almost two years, committee chairman Sen. Grassley released a statement to the press which was interpreted by the "Washington Post" as "clearing" the charities of any involvement in terrorist financing. The article characterized the committee's conclusion thus: "...it discovered nothing alarming enough to warrant new laws or other measures, officials said" (Word file). ISNA issued a press release crowing that it was "cleared" and accusing the committee of engaging in a "fishing expedition" (an accusation also leveled by CAIR).

Well, Sen. Grassley apparently didn't appreciate the mischaracterizations of his statement in the "Washington Post" and elsewhere, because he issued a statement last night (Acrobat file), asserting,

The fact that the Committee has taken no public action based on the review of these documents does not mean that these groups have been �cleared� by the Committee. The reason for requesting these records was to gather information for the purpose of oversight and possible legislation.

Therefore, the Committee will continue to gather information and examine the operations of the charities that have been designated or listed by the Treasury Department�s Office of Foreign Assets Control and other similar charities that come to the committee�s attention, as well as conduct oversight on the related activities of federal law enforcement and intelligence agencies, such as whether the agencies are adequately sharing information that could lead to the policing of inappropriate activity. Terrorism financing, and particularly the use of tax-exempt entities by terrorists, remains a major issue of concern for the Committee.

This has already led to an AP story titled, "Accusations of terror links still follow Toledo Muslim charity," referring specifically to Kind Hearts. But the AP makes the same error as the "Washington Post," this time by mischaracterizing both of Sen. Grassley's statements by reporting, "After initially clearing 25 Islamic charities of funding terrorism, a Senate committee vowed to keep monitoring the nonprofits." A careful reading of both statements makes it clear that the committee never "cleared" any of the named charities and never claimed that it had "finished" investigating the charities. It was, in effect, a status report on its limited review of available federal tax information, and a conclusion that no action would be taken based solely on those records.

The first ISNA press release is still on their website - no word on whether they will remove or amend it in light of Sen. Grassley's new statement.

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