On December 12, 1992, Israeli Army Sergeant Yuval Tutanji and two other soldiers were ambushed by Hamas terrorists while riding in a jeep near Hebron. Tutanji was killed, the others were wounded. Six years later, U.S. officials believe the Kalashnikov rifle that shot Tutanji to death—as well as other automatic weapons, pistols, and hundreds of rounds of ammunition used in Hamas attacks in the months before the killing—were purchased with money laundered through a 501(c)(3) public charity inside the United States, the Chicago-area Quranic Literacy Institute.
Worse yet, the so-called “Quranic case” does not appear to have been an isolated incident. An FBI special agent recently told the Chicago Tribune that the case is only “a chunk of the puzzle” in the Bureau’s larger probe into the extent of U.S. nonprofits operating illegally as money laundering fronts for terrorists—even as the U.S. government pours billions of dollars into fighting terrorism. Stefan Leader, author of a recent article on the subject for Jane’s Intelligence Review, estimates the amount raised for terrorists by nonprofits could be “in the millions of dollars, possibly more.” An exact amount, says Leader, is impossible to pin down because of the clandestine nature of the fundraising, and the Quranic case is probably just the “tip of the iceberg of other activities we don’t know about.”
Guns and Butter
The FBI’s section chief on International Terrorism Operations, special agent Dale L. Watson, confirms the prevalence of U.S.-based fundraising by terrorist groups. In recent congressional testimony, Watson spoke of a “significant and growing organizational presence” by “Palestinian Hamas, Iranian-backed Hezbollah, and Egyptian-based Al- Gama at Al Islamiyya” centering around “fundraising and low-level intelligence gathering.” Oliver “Buck” Revell, former FBI deputy director for investigations and intelligence from 1979 to 1991, calls this fundraising a “very major undertaking” patterned on “what the IRA was able to do through NORAID [an IRA-aligned fundraising group] back in the 1970s and 1980s in the U.S.” One advantage for a terrorist group using a 501(c)(3) front, adds Revell, is that “it gives an air of legitimacy to their fundraising” because “it’s essentially [U.S.] government sanctioned as a legitimate charity.”
Steven Emerson, an investigative journalist and producer of the PBS documentary “Jihad in America” goes farther, describing “nonprofit charitable, religious, academic, and educational institutions” as the “primary vehicle through which radical groups have established a ‘legitimate’ presence in the United States.” At a February, 1998 Senate hearing, Emerson testified that “During the past seven years, there has been a proliferation of radical Islamic groups hiding under false cover using 501(c)(3) and other nonprofit status. . .. Sometimes the monies raised go directly to purchase weapons and military supplies, although most of the time the tax-free money raised in the United States goes to underwrite the social welfare budgets of groups like Hamas, freeing up local funds for terrorist operations.”
For instance, Hamas actually spends the vast majority of its funds for schools, mosques, medical clinics, orphanages, and other charitable activities on the West Bank and Gaza (estimates of its annual budget range up to $70 million with up to a third coming from Europe and the United States). Yet, in its quest to derail the peace process, the group also commits gruesome acts of violence, like blowing apart civilian buses. Hamas-sponsored charities also pay stipends to the families of suicide bombers and others “killed in action.”
Oliver Revell knows firsthand how hard it is for law enforcement to track money once it leaves the country, and if you ask him, there’s no real way to make sure that a dollar given for charity ends up supporting charity: According to Revell, once the money “goes into [charitable] front organizations in Israel then it’s diverted. It’s difficult for even the Israelis to trace it.”
Leaders of the organizations in question, including Mohammed Mousa Abu Marzook, the current political leader of Hamas, take the time-honored approach—deny that charitable contributions fund military operations. But Marzook’s credibility is somewhat in question. His name has surfaced in connection with the Tutanji killing.
To attempt to put some pressure on domestic fundraising for terror groups, in 1996, President Clinton signed the Antiterrorism and Effective Death Penalty Act, which outlawed support of any type (including charitable giving) of recognized terrorist groups. Section 302 of that Act (“Prohibition on Terrorist Fundraising”) aims to “cut off the dollars and, thus, the lifeblood of foreign terrorist organizations that are wreaking havoc and destroying lives all over the world,” as Senator Orrin Hatch put it during floor debate on the measure.
As amazing as this sounds, prior to 1996 a person under U.S. jurisdiction could legally raise money for a terrorist group as long as the funds went solely to that group’s lawful charitable program. To prevent such organizations from raising funds in the United States, the Antiterrorism Act requires the Secretary of State to publish an annual list of groups the U.S. government classifies as “foreign terrorist organizations” (FTOs). Listed FTOs are then banned from receiving financial or material support from any entity under U.S. jurisdiction. Hamas is among the 30 organizations targeted by the latest Clinton Administration FTO list, as are the Abu Nidal Organization, Hezbollah, the Palestine Islamic Jihad, Gama’a al- Islamiyya, the Popular Front for the Liberation of Palestine, Kach, Liberation Tigers of Tamil Eelam, and the Japanese Red Army.
The FTO list is probably no more than a good start at cracking down on terrorist fundraising, however. “You do your best to disrupt these networks and shut off some of the channels,” says Leader, “but it’s unlikely you can shut them all down.” According to Revell, a terrorist-created 501(c)(3) “does not identify their parent or their principal connection so if it’s connected to Hamas, or Hezbollah, or Palestinian Islamic Jihad it’s not going to so state in any of its literature.” Revell also believes “much tighter scrutiny by the IRS over the granting of the 501(c)(3) status” would help law enforcement curb illicit fundraising.
Fundraising as Free Speech?
As the FBI attempts to cut off the foreign terrorist fundraising tentacles in the United States, a serious threat to law enforcement anti-terrorism efforts is coming from an unexpected source—the courts.
Justices of the United States Court of Appeals for the Ninth Circuit will soon decide whether a person on American soil can give material or financial support to groups classified by the president of the United States as “foreign terrorist organizations.” In Humanitarian Law Project (and other U.S. nonprofits) v. Reno, American supporters of two of these FTOs—the Liberation Tigers of Tamil Eelan (Sri Lanka) and the Kurdistan Workers’ Party (Turkey)—are challenging the constitutionality of the Anti-Terrorism Act of 1996 on First Amendment grounds. The plaintiffs want the freedom for anyone to raise funds for, and donate to, the terrorist charity of their choice. They will, however, have to overcome a significant precedent.
In 1987, Minister Louis Farrakhan and Muhammad Mosque, Inc. made the same First Amendment argument to the United States District Court for the District of Columbia in response to President Reagan’s sanctions against Libya following terrorist bombings at the Rome and Vienna airports. Muhammad Mosque, Inc. wanted to repay a $5 million loan from the Libyan government but had been barred from doing so under the sanctions regime. The Court ruled that because Libya was considered a “state sponsor” of terrorism, any money sent to Tripoli could, in the end, aid terrorist activity: “We cannot ascertain what will happen to the money [supposed debt repayment] once it reaches Libya. Conceivably, the money could be used for purely innocuous purposes, or it could be used directly or indirectly, to subsidize the types of anti-United States activity that the sanction regulations aim to prevent.”
Not that anybody bothered to ask them, but the family of Sergeant Tutanji probably hopes the precedent holds.
Daniel McKivergan is associate editor of Philanthropy.