nakedcapitalism | This measures is so far under the radar that so far, only Friedman and Matthew Petti at Reason seem to have noticed it. And Petti has pointed out that the Secretary of the Treasury can designate any organization to be “terrorist-supporting organization,” so the does not think, as Friedman seems to, that any other measures are needed to allow an Administration to try to financially cripple not-for-profits engaging in wrong speech.
Note that the messaging depicting Hamas as somehow behind the campus protests has increased:
And Aljazeera has already produced evidence of Zionist groups trying to stoke confrontations at the demonstrations (hat tip Erasmus):
Mind you, not-for-profits are already subject to mission and censorship pressures by large donors, witness the billionaires who loudly said they would halt donations to Ivy League schools if they “tolerated anti-Semitism,” as in did not quash criticism of Israel. But as you will see, this is a whole different level of censorship.
First, we are hoisting Friedman’s entire tweetstorm. She stresses that not only does this bill create a star chamber when existing laws allow for crackwdowns on terrorist supports, but that it could be easily extended to other types of establishment-threatening speech.
Petti at Reason is more pointed. From This Bill Would Give the Treasury Nearly Unlimited Power To Destroy Nonprofits:
A bipartisan bill would give the secretary of the treasury unilateral power to classify any charity as a terrorist-supporting organization, automatically stripping away its nonprofit status….
In theory, the bill is a measure to fight terrorism financing…
Financing terrorism is already very illegal. Anyone who gives money, goods, or services to a U.S.-designated terrorist organization can be charged with a felony under the Antiterrorism Act and the International Emergency Economic Powers Act. And those terrorist organizations are already banned from claiming tax-exempt status under section 501(c)(3) of the tax code. Nine charities have been shut down since 2001 under the law.
The new bill would allow the feds to shut down a charity without an official terrorism designation. It creates a new label called “terrorist-supporting organization” that the secretary of the treasury could slap onto nonprofits, removing their tax exempt status within 90 days. Only the secretary of the treasury could cancel that designation.
In other words, the bill’s authors believe that some charities are too dangerous to give tax exemptions to, but not dangerous enough to take to court. Although the label is supposed to apply to supporters of designated terrorist groups, nothing in the law prevents the Department of the Treasury from shutting down any 501(c)(3) nonprofit, from the Red Cross to the Reason Foundation.
Petti explains that an initial target appears to be Students for Justice in Palestine, which he says have not had enough of an attack surface to be targeted under current law; in fact, Florida governor DeSantis had to shelve a plan to shut down Students for Justice in Palestine when confronted with a lawsuit.
Petti explains that his concerns are not unwarranted:
Under the proposed bill, murky innuendo could be enough to target pro-Palestinian groups. But it likely wouldn’t stop there. After all, during the Obama administration, the IRS put aggressive extra scrutiny on nonprofit groups with “Tea Party” or “patriot” in their names. And under the Biden administration, the FBI issued a memo on the potential terrorist threat that right-wing Catholics pose.
The Charity and Security Network, a coalition of charities that operate in conflict zones, warned that its own members could be hindered from helping the neediest people in the world.
“Charitable organizations, especially those who work in settings where designated terrorist groups operate, already undergo strict internal due diligence and risk mitigation measures and…face extra scrutiny by the U.S. government, the financial sector, and all actors necessary to operate and conduct financial transactions in such complex settings,” the network declared in November. “This legislation presents dangerous potential as a weapon to be used against civil society in the context of Gaza and beyond.”
Recall how the US has fired on Médecins Sans Frontières staff who were according to the US, assisting bad guys in their relief efforts? Financial sanctions are so much tidier.
I urge readers, and particularly donors, to alert the fundraising and executive staff at not-for-profits, particularly the journalistic sort, so they can object to this legislation. It would likely not survive a Supreme Court challenge in its current form, but that’s an awfully heavy load to have to carry, plus the legislation might not be subject to an injunction in the meantime.
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