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Right to bear alms

World Khaled Smaili says he tried to run an Islamic charity that played by the US government's rules. Now he's trying to prove that they broke the law to shut him down.

Khaled Smaili in Beirut: "We specifically made sure when we were established that not a single penny" went to groups that had been designated as terrorist organisations by the US government. "I really have a hunch that eventually our case is going to be won in the United States."
Khaled Smaili in Beirut: "We specifically made sure when we were established that not a single penny" went to groups that had been designated as terrorist organisations by the US government. "I really have a hunch that eventually our case is going to be won in the United States."

Khaled Smaili says he tried to run an Islamic charity that played by the US government's rules. Now he's trying to prove that they broke the law to shut him down. David Enders on the fate of zakat in America. For Khaled Smaili, it has always been an article of faith that he would be vindicated in court. "I really have a hunch that eventually our case is going to be won in the United States. The only thing is that we're going to be paying the price in our reputation," he said one day recently, standing on a windswept mountainside near his home in Lebanon's Beqaa Valley. "But we are going to be on the front lines of giving rights back to the Muslim community in the United States."

Smaili is the founder and former CEO of KindHearts, a US-based Islamic charity accused by the US government of supporting Hamas. In the years following the terrorist attacks of September 11, 2001, the US government - emboldened by expanded powers pushed through by the Bush administration - closed seven American Islamic charities. KindHearts, which was forcibly shuttered in 2006, was the last to go down.

The US Treasury Department, which has not brought criminal or terrorist charges against Smaili or any of the other principal officers of KindHearts, raided the organisation's offices, confiscated most of its equipment and documents and blocked its assets "pending investigation" in February 2006. Since then, lawyers for KindHearts have been fighting the asset freeze and the government's characterisation of KindHearts as an organisation that funnelled money to Hamas. But the charity has never been granted an official hearing to defend itself against those accusations.

Then last month a judge in Ohio's Northern District Federal Court provided the first indication that Smaili's presentiment of vindication might ultimately prove correct. On August 18, Judge James Carr ruled that the government had unlawfully acted against KindHearts by freezing its assets and preventing its employees access to the charity's documents and funds without due process. The judge also ruled that the Treasury Department violated the Fourth Amendment's protections against property seizure by raiding the charity's offices without probable cause or a warrant.

The ruling marked the first successful challenge to the government's capacity to block a group's assets and declare it a "specially designated global terrorist" without a hearing - precisely the expanded powers that have been used to target zakat organisations since 2001 by the Office of Foreign Assets Control (OFAC), the arm of the Treasury Department that investigates the flow of money to banned groups overseas.

A spokesman for the US Department of Justice said that Judge Carr's decision is being reviewed, while a Treasury department spokesperson declined to answer questions, except to say that the agency "will continue to employ all authorities at our disposal to track and disrupt the deadly flow of money to terrorist groups." A hearing in the case, during which the government is allowed to request that the decision be reviewed, is set for later this month.

The ultimate outcome of Smaili's court battle will have important implications for the future of Muslim charities in the United States, says Francesca LaGuardia, a researcher at New York University's Center on Law and Security. At stake is a troubling legal question: how much due process can a charity expect when it is accused of being somehow involved in financing terrorism? Depending on how that issue is resolved, says LaGuardia, the case could raise an even more ominous question for zakat organisations in America - "whether there is any way for them to exist at all".

A soft-spoken man with a long greying beard, Smaili was born in Toledo, Ohio to a Lebanese-American father and a Syrian-American mother. He has lived in the Beqaa Valley ever since KindHearts was shut down. Smaili had decided before the government raids that he wanted to raise his six US-born children partially in Lebanon, but now he finds himself an involuntary permanent resident of his ancestral home - the State Department revoked his US passport last year. Though he also holds a Lebanese passport, he is afraid of using it to travel back to the US. Meanwhile, his sons want to know when they can return to Ohio. "We miss our friends," says his oldest son, Mohammed, in American-accented English.

The government shut down KindHearts using authority granted in Executive Order 13224, signed into law by George W Bush on September 24, 2001. The order expanded the Justice and Treasury Departments' ability to block assets of groups accused by the government of supporting terrorism. Those powers have been instrumental in shutting down a string of Muslim charitable organisations - and, many say, in scaring American Muslims' away from performing the religious duty of zakat. According to a recent report by the American Civil Liberties Union called Blocking Faith, Freezing Charity, zakat donations in the United States have plummeted amid fears of closer government scrutiny and a perception that even small donations are enough to draw the attention of authorities.

Though the federal government has invoked the right to freeze assets without due process in all seven of the zakat cases to date, its only court victory has come in the case of the Holy Land Foundation, a Texas charity that was shut down soon after the attacks of September 11. A jury ruled against the foundation in November 2008, and the principal leaders of the charity were sentenced to between 12 and 65 years in prison for providing support to Hamas, money laundering, conspiracy and tax fraud. Those sentences will probably be appealed.

During the same month that the Holy Land Foundation was closed down - December, 2001 - two other Islamic charities were also raided and shuttered by the federal government. Together, they were the three largest zakat organisations in the United States. When Smaili founded KindHearts in 2002, he was already intimately familiar with the government's newly intense scrutiny of Islamic charities. Between 1998 and 2001, he had worked as a fundraiser for one of the organisations that had been shuttered the previous December, a Chicago-based charity called Global Relief.

Smaili says that after Global Relief was shut down, he resolved to take special care to make sure the government couldn't accuse his new charity of supporting Hamas or any other group on the list of designated terrorist organisations compiled by OFAC, the State Department and Congress. "We specifically made sure when we were established that not a single penny goes to them," Smaili says. "That was the reason the previous organisations were closed down, because they were accused of giving money to Hamas, even if it was only the humanitarian side of it."

Smaili says that most of the more than $20 million KindHearts raised during its four years of operation was donated to hospitals and schoolchildren in Lebanon and the occupied territories. He says he established KindHearts field offices there to ensure that donations would be distributed by his own employees rather than by third parties, as had sometimes been the case in the past. "When we did have to go through third parties, we did check the OFAC list and the list that the State Department has told us about so that we're not dealing with people we're not allowed to deal with as American citizens," Smaili says, "so we did not break the law in any manner."

Whatever measures Smaili took to run KindHearts differently, however, they were lost on the federal government. In a press release issued after KindHearts was raided in 2006, Stuart Levey, the Undersecretary for Terrorism and Financial Intelligence at the Treasury Department, essentially condemned the charity by reference to its organisational genes. "KindHearts is the progeny of Holy Land Foundation and Global Relief Foundation," he said, "which attempted to mask their support for terrorism behind the facade of charitable giving." Levey also hailed the president's Executive Order 13224: "By utilising this specialised designation tool, we're able to prevent asset flight in support of terrorist activities while we further investigate the activities of KindHearts."

That press release, which runs to just over 900 words, remains virtually the only public statement the government has made regarding its shutdown of KindHearts. The rest of the document mainly serves to link KindHearts to the American Islamic charities the government had already shut down, as well as to foreign NGOs and individuals the government characterises as "Hamas-affiliated". The release includes allegations that KindHearts fundraisers "reportedly" received a phone call from a Hamas leader in Lebanon, who "reportedly" expressed gratitude for the charity's support. (The word "reportedly" appears eight times in the release.) It refers to "information developed from abroad" that "corroborates connections between KindHearts and Hamas." It cites "information available to the US" suggesting KindHearts donated money to a "Hamas-affiliated" Lebanese charity that was designated a terrorist organisation in August 2003 (though the release also mentions that KindHearts stopped giving the Lebanese charity money that July). The release, in other words, offers virtually nothing in the way of documented evidence that can be challenged or interpreted. "The government has not yet advanced any support," says Fritz Byers, KindHearts' lawyer.

Despite several requests over the past two years, KindHearts' lawyers have had little success in gaining access to the government's body of evidence, which includes tens of thousands of documents seized from KindHearts' own offices. The charity's lawyers have had to sign releases for the few KindHearts documents they have been able to retrieve, and memos provided by the government explaining its case against KindHearts were partially redacted.

Apart from the Holy Land Foundation, no other Muslim charities have actually faced official criminal or civil terrorism charges. Instead, employees of zakat organisations, often foreigners, have been removed from the US with little fanfare on lesser charges. Often their fates ultimately play out in immigration court, where hearings are held without a jury, easily closed to the public, and where the burden of proof is much lower than in a federal court. According to NYU's Center on Law and Security, this is a pattern consistent with the larger realm of terrorism-related prosecutions. "One of the methods of making sure these cases don't fail when they come through the courts is to deport" the accused, says Karen Greenberg, the center's director.

It would seem that Smaili, a US citizen, should not be vulnerable to the same dangers - indeed, he believed KindHearts would fare better than the charities that came before it because of his standing as a citizen. "I have no immigration status," Smaili says. "I was born in the US." And yet Smaili has nonetheless found himself effectively marooned outside of his own country. Under US law, the government can revoke a passport if someone has been subpoenaed to testify in federal court. In Smaili's case, he only found out he had been subpoenaed after he went to the US embassy in Beirut to add pages to his passport. He thought it would be a simple process that would take a few hours, until an embassy employee told him his passport would "'have to be sent to Washington.'" A few weeks later, he was told by the embassy that he had been subpoenaed to testify in the KindHearts case and that his passport would not be returned. No indication was given as to how Smaili might reobtain his passport.

"I never knew that this was possible, that an American citizen could have his passport revoked," he says. Given that the subpoena was only served after he went to the embassy, Smaili is inclined to believe that the revocation of his passport is simply another retributive move by the US government. John Czarnecki, Smaili's personal lawyer, says the law that allowed the government to take Smaili's passport is rarely invoked - and that the circumstances surrounding its use in this case are exceedingly strange. "I presume that this would make sense if the person were in the US and the intent of the denial was to prevent his fleeing to avoid compliance with the subpoena. It makes significantly less sense when the person is outside the US and he's being subpoenaed to return," Czarnecki says. "That logic is, however, lost on the US Attorney, who takes the position that the section is not limited to people inside the country." Czarnecki says the government has not provided him with any further justification for its action, despite two letters requesting information.

Given the frustrations with Smaili's passport, last month's court decision was a welcome relief for the Lebanese-American and his attorneys. "Judge Carr's historic ruling makes clear that the government can't circumvent the constitution, which protects all of us against unreasonable search and seizures, even when the government invokes national security as an excuse," said Byers, KindHearts' lawyer, soon after the decision was handed down. "We should all celebrate the vindication of those crucial principles. As for KindHearts in particular, Judge Carr's ruling is a critical step in its goal of defending itself against the government's allegations."

Another possible indication that the tide might be turning for American Islamic charities came in President Barack Obama's June speech in Cairo. "In the United States, rules on charitable giving have made it harder for Muslims to fulfil their religious obligation," Obama said. "That's why I'm committed to working with American Muslims to ensure that they can fulfil zakat." But the real test of that commitment lies ahead.

KindHearts was "created in response to the complete shutdown of every major Islamic charity in the country as an effort to recreate the ability for individuals to send Islamic aid to these areas," says LaGuardia, the NYU legal researcher. "The Treasury department is going to have to come up with a procedure to allow these types of corporations to defend themselves. It will have to respond more promptly after it seizes assets and actually have that interaction with an organisation. It will have to give the organisations reasons for the seizure, and those reasons will have to be more than just a list of activities that the organisation was involved in, but an explanation of how this activity or this transfer of money was illegal."

"There has to be a hearing," LaGuardia says of the KindHearts case. "The government has to establish that there was a reason for acting that quickly. That's not a ridiculous thing to ask a government to do - to give a reason for why it thought it should act in haste."

David Enders is the author of Baghdad Bulletin. Portions of this story will appear in an upcoming documentary titled "The Deported", produced by Big Noise Films.