Send me your money: controlling international terrorism by restricting fundraising in the United States.

• Author: Benson, Jacqueline

1. INTRODUCTION

   Policy relating to international terrorism has long been a hotly debated issue in the United States.(1) While virtually everyone would agree that terrorism is bad, few agree whether to bargain with terrorists, how to punish terrorists, or even who qualifies as a terrorist.(2)

   However one chooses to define terrorism, its international impact cannot be underestimated.(3) The U.S. State Department recently reported that while incidents of international terrorism have fallen over the last ten years, the number of victims has increased.(4) According to FBI Director Louis Freeh, "Although the number of attacks directed at American interests remains comparatively low, the trend toward more large-scale incidents designed for maximum destruction, terror, and media impact actually places an increasing proportion of our population at risk."(5) Religious fanatics were responsible for most terrorist acts in 1996.(6) The most active terrorist group that year was the Kurdistan Workers Party, which was blamed for seventy-six minor terrorist attacks in Germany.(7) While the attacks of the Kurdistan Workers Party caused little damage and no casualties, Iran was probably responsible for over fifty murders of political dissidents between 1990 and 1996.(8) The State Department reported that approximately twenty-five percent of the terrorist attacks were directed toward American targets outside of the United States.(9)

   In response to terrorist incidents at home and abroad, Congress pushed terrorism back into the limelight and developed new preventative legislation. Congress passed 18 U.S.C. [sections] 2339A in 1994.(10) It was amended by the Antiterrorism and Effective Death Penalty Act of 1996.(11) These laws include provisions that make it illegal to solicit funds or donate money to international terrorist organizations.(12) In addition, President Clinton signed an executive order designed to protect the Middle East Peace Process in 1995.(13) Congress hopes these measures will stem the tide of money being sent from the United States to foreign terrorist organizations.(14) Following the federal lead, in 1996 Illinois became the first state in the country to pass legislation restricting terrorist funding.(15)

   These laws could have a strong impact on international terrorism by cutting off a major source of funding for terrorist groups.(16) However, the laws have had virtually no effect thus far because they are nearly impossible to enforce.(17) This comment will explore the new legislation and the problems with enforcement.

2. WHY ANTITERRORISM LAWS WERE PASSED

   The antiterrorist funding restrictions respond to the government's fear that terrorist groups are using charitable inclinations of Americans to fund terrorist activities abroad.(18) The 1995 Global Pattern of Terrorism study reported that the Palestinian group HAMAS, the radical Jewish groups Kach and Kahane Chai, the Sri Lankan group Liberation Tigers of Tamil Eelam, the Provisional Irish Republican Army (PIRA),(19) and the Sikh groups of Babbar Khalsa and Khalistan Liberation Front received external aid from North America.(20)

   While it is clear that American money is sent to fund foreign terrorists, it is unclear how much of the money is actually raised in the United States.(21) FBI Director Louis Freeh said, "We have been able to show the transfer of substantial cash funds from the United States to areas in the Mid-East where we could show Hamas received an even expenditure of those funds."(22) However, Freeh admitted that FBI surveillance may have only uncovered a small percentage of this activity.(23) New York Senator Charles Shumer believes HAMAS may get as much as fifty percent of its funding from the United States.(24) Steven Emerson testified before the Senate Foreign Relations Committee that HAMAS has a yearly budget of seventy to ninety million dollars, approximately half of which is received from the United States and other Western countries.(25)

   Some estimate that Kahane Chai and Kach may receive as much as seventy percent of their funding from the United States, predominately from Los Angeles and New York.(26) Ian Lustick, a professor at the University of Pennsylvania who monitors Israeli extremist groups, noted, "Fund-raising by Kach is well-known to take place in New York and Florida under the names of various front organizations claiming tax deductible status as charities for settler groups in Israel."(27)

   Another source estimates a network of ethnic Tamils provide two to three million dollars per month to the Liberation Tigers of Tamil Eelam.(28) Regardless of the exact figures, the awareness that U.S. funds are used by international terrorist groups triggered the push for restrictive legislation.(29)

   Critics of this legislation suggest that the laws were not passed for their substantive effect, but rather as a public relations stunt.(30) Georgia Congressman Bob Bart said, "Since none of these provisions have been used, I would have to conclude that these items were more politics than substance."(31) Others see the legislation as symbolic rather than substantive.(32) It is difficult to predict whether the government will actively prosecute violations under the legislation, because enforcement problems may make the legislation virtually powerless in the fight against terrorism.(33)

3. FEDERAL LEGISLATION

   1. 1994: Providing Material Support to Terrorists

      On September 13, 1994 Congress passed 18 U.S.C. [sections] 2339A making it a crime to provide material support or resources to terrorists.(34) The statute defined material support or resources as "currency or other financial securities, financial services, lodging, training, safehouses, false documentation or identification, communications equipment, facilities, weapons, lethal substances, explosives, personnel, transportation, and other physical assets, but does not include humanitarian assistance to persons not directly involved in such violations."(35) Investigations utilized in enforcement of the section were strictly limited by subsections (c)(1) and (c)(2)(36) Subsection (c)(1) only permitted investigations where it reasonably appeared that the individual or group knew they violated federal criminal law.(37) Investigations were further limited by subsection (c)(2), which restricted investigations that may interfere with activities protected by the First Amendment of the U.S. Constitution.(38) These investigative limitations prevented this statute from being enforced. The statute has since been extensively revised.(39)

   2. 1995 Executive Order

      The next attempt to limit foreign terrorist fundraising occurred on January 24, 1995 when President Clinton issued an executive order to protect the Middle East Peace Process.(40) The executive order named twelve foreign organizations(41) that had threatened violence against the peace process, and it empowered the Secretary of State, in coordination with the Secretary of the Treasury and the Attorney General, to designate additional groups as terrorists.(42) Property in the United States owned by these designated organizations and their members may be blocked.(43) The order prohibited all transactions between these designated persons or groups and citizens of the United States.(44) It also prohibits attempts to avoid the executive order.(45) The executive order is broad since the ban also prohibits donations for humanitarian causes.(46)

      On January 25, 1995 the Department of the Treasury issued a notice identifying thirty-one entities whose assets were blocked because they acted for, or on behalf of, the twelve organizations identified in the executive order.(47) The notice also identified eighteen individuals who were leaders of the groups and nine name variations or pseudonyms used by the leaders.(48) The executive order froze approximately $800 thousand in funds of Palestinian groups by March 1995.(49) Two of the three individual accounts that held a majority of the impounded funds were HAMAS related.(50) Even small amounts of cash were frozen in U.S. accounts. In November 1995 $203 raised by Kahane Chai was frozen in a New York account.(51)

      Despite these results, FBI officials and analysts believe the executive order was largely unsuccessful in halting fundraising by the designated terrorist organizations.(52) The order may not have been widely enforced due to concerns about infringing upon the organizations' civil liberties.(53) Pressure from Muslim groups on the Clinton Administration may also have slowed enforcement.(54) Despite these issues, on January 21, 1997 and January 21, 1998 the President issued notices continuing enforcement of the executive order.(55) In July 1998 President Clinton noted his intent to "continue to exercise the powers at my disposal to apply economic sanctions against extremists seeking to destroy the hopes of peaceful coexistence between Arabs and Israelis...." (56)

      Hours after the U.S. retaliatory strikes on a pharmaceutical factory in Sudan and a training camp in Afghanistan, President Clinton signed an executive order asking the Treasury Department to add bin Laden to the list of designated terrorists.(57) Bin Laden was suspected of several terrorist attacks in Africa.(58) While the order prohibits all Americans and U.S. companies from engaging in financial transactions with bin Laden,(59) a senior Clinton Administration official said the order would have a very limited effect because few of bin Laden's assets are likely to fall under the scope of the law.(60) However, the official said the Clinton Administration hoped other countries would follow the United States in freezing bin Laden's assets.(61)

   3. Comprehensive Anti-Terrorism Act of 1995

      Following the 1995 executive order, the U.S. House of Representatives considered the Comprehensive Anti-Terrorism Act of 1995.(62) This Act was never passed into law.(63) However, many of the changes included in the Act were incorporated into the Antiterrorism and...