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16 May 2008
Treasury’s Rosen Discusses How Terrorist Organizations Exploit Charities
Ask America webchat transcript, May 15
Michael Rosen, a policy adviser in the Treasury Department's Office of Terrorist Financing and Financial Crimes, discussed the U.S. and international strategy to combat the exploitation of charities by terrorist organizations in a May 15 Ask America webchat.
Following is the transcript:
(begin transcript)
U.S. DEPARTMENT OF STATE
Bureau of International Information Programs
Ask America Webchat Transcript
Guest: Mike Rosen
Date: May 15, 2008
Time: 9:30 a.m. EDT (1330 GMT)
U.S. & International community Strategy to Combat Terrorist Organizations' Exploitation of Charities
Mike Rosen, U.S. Treasury Department
Moderator: Welcome to our webchat! We look forward to hearing from you on May 15. We are taking your questions now. The discussion will begin at 13:30 GMT.
Michael Rosen: Hi Everyone, I am on-line and ready to take your questions. Take care, Mike
Moderator: Dear participants, our speaker is addressing your questions now. Thank you for your patience.
Question [Chat Participant]: Does us have real right to declare charity works as "terror"? How you decide?
Answer [Michael Rosen]: I am not an expert in this area, but generally speaking, the U.S. Treasury, in consultation with other US government agencies, has statutory authority to determine whether any individual or entity meets specific criteria before imposing targeted financial sanctions. This criteria is set out in an Executive Order issued by the President of the United States. The determination of whether an individual or entity meets the specific criteria is a very thorough process and is based on evidence that is reviewed by many different agencies. It can also be challenged in U.S. courts and reviewed by judges. To date, all our enforcement actions have been upheld by both appeals and trial courts.
This statutory authority applies not only to charities but to all U.S. persons. This includes U.S. citizens and permanent resident aliens (regardless of where they are located), all persons and entities within the United States, and all U.S. incorporated entities and their foreign branches. In addition, many so-called charities have been identified by the United Nations as having supported the Taliban, Al-Qaeda, and Osama-Bin Ladan and all nations are required to implement sanctions against these identified charities. As I will explain later, the sad fact is that many terrorist groups such as Al-Queda and Hezbollah exploit charities that do good work. This fact has been recognized by the international community, including the European Union, the United Nations, and the Financial Action Task Force.
One last thing, the Office of Foreign Asset Control (OFAC) is the responsible agency to implement these sanctions. I would recommend that you check the OFAC web site. They publish a lot of great information that explains in more detail how the process works.
Moderator: The website for the The Office of Foreign Asset Control can be found at: http://www.treas.gov/offices/enforcement/ofac/
Q: Soultan: How I can do a good contact with Organizations?
A [Michael Rosen]: Hi Soultan, thanks for your question. I think what you are asking is how do you find a reputable charity in the United States?
First, as a government, we believe that charitable giving is an extremely important value for all Americans. Our role is to promote and protect this very important source of funds and make sure that it is not taken advantage of by fraud and illicit financial activities such as terrorism.
In terms of your question, the Federal government does not publish a list of approved charities. We encourage charitable giving by granting a tax incentive to qualified organizations. Right now, there are over 1.4 million "tax-exempt" organizations that do a variety of good work in the U.S. and abroad. Last year, Americans gave over 300 billion dollars in charitable donations. This extraordinary figure shows how important charities are for humanitarian activities and for promoting stability in critical areas.
What my office does is publish guidance for charities. These materials explain the risks that terrorists pose to charities. The Treasury Department worked with a number of charities to publish voluntary guidelines that a charity may adopt to minimize the chance that terrorist groups will exploit its operations.
Individual donors should start by reviewing the lists that many private-sector organizations publish. These lists identify charities that adhere to certain good-governance principles. You can also look at a charity's web site. It should tell you a lot of information on how a charity is run, its board members, priorities, how it spends its donations, etc. It is ultimately the responsibility of U.S. donors to follow the law, but these resources can help donors make a well-informed decision.
Q [fatma]: How do terrorist organizations exploit charities, how can one protect organizations from infiltration of such intentions?
A [Michael Rosen]: Thank you for the question, Fatma. We have seen cases in the past--and this is still ongoing--where terrorist groups have used charities to raise money that is then sent to fund their activities. They have also used charities as a front to provide cover for their activities and to move funds with the goal of avoiding detection. A separate issue from the practice of using charities to raise and move funds is the broader exploitation of the services of a charity. Sometimes charities are run by or on behalf of terrorist organizations. In this scenario, the hospital/school/social service agency is in fact providing legitimate services, but in the name of Al-Qaeda, LET, JUD or another Foreign Terrorist Organization. Often this happens when the government is weak or not providing a sufficient level of social services. When terrorist organizations fill this void it can radicalize a vulnerable population. In such circumstances, it is vital that the U.S. and other governments redouble their efforts to get aid into these areas. It also means that charities must adopt measures to protect themselves from this form of exploitation. Unfortunately, there is no easy answer to your question. We encourage charities that operate in high-risk areas to adopt appropriate due diligence measures. To the extent that is reasonable, they should operate in a transparent manner, verify their operations, know who their partners or grantees are, and so on.
Q [Kuba]: why only in Muslim charities you look for illegal activities?
A [Michael Rosen]: Kuba, so far the vast majority of charities that have been designated by either the U.S. or the U.N as having supported terrorist organizations are groups that claim some Islamic affiliation. For the reasons explained above, I would say that these terrorist organizations deliberately target Muslim charities. However, it is not strictly an Islamic charity issue. First, all U.S. citizens must abide by U.S. law. Recently, a U.S. charity was designated for supporting the Tamil Tigers, a non-Muslim Foreign Terrorist Organization (FTO). In terms of FTOs, there are around 42 and some, like the Real Republican Army or the FARC, are non-Muslim.
Q [tmd]: why USA only support us 500000 dollars !!!!!!! you are the stingiest!!!!!!!!!!!!!!!!
A [Michael Rosen]: Hi TMD, In terms of private donations, Americans are the most generous donors in the world. There are many illustrations of this, such as the response by the U.S. Government and private donors to the Tsunami in Southeast Asia. The foreign assistance programs of the U.S. Government are also the largest in the world. For example, in the West Bank/Gaza region, we are the largest provider of aid. I do not have the exact figures, but you can check USAID's web site, which provides the amount of our direct foreign assistance broken down by region and country. In addition, many U.S. Government agencies provide technical assistance to numerous countries to combat money laundering and to counter financing of terrorism. Treasury's Office of Technical Assistance provides training on a number of subjects, including charities. The State Department also has similar programs, as do our law enforcement agencies.
Q [Kuba]: what charities must do for proper workings? must charities be approved with your ministry?
Michael Rosen: Hi Kuba, As I mentioned, we do not certify or approve a charity for anti-terrorist financing. The Federal government approves a charity to receive tax-exempt status. As part of granting tax-exempt status, charities are expected to take measures to conform to U.S. law. Many charities, for a variety of reasons, have measures in place for accounting, good governance, and transparency. These all help in the fight against terrorist exploitation of charities. In addition, the US government and other organizations have published "best practices" to assist charities that operate in high-risk areas.
Moderator: We wish to thank Mike Rosen for joining us today. The webchat is now closed. A full transcript of today's webchat will be published (usually within one business day) to our Ask America homepage.
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