The nation inched a step closer to autocratic rule with the passage of a bill allowing federal authorities to shut down nonprofit groups simply by claiming they support terrorism, critics of the bill said.
On Nov. 21, the U.S. House of Representatives approved the Stop Terror-Financing and Tax Penalties on American Hostages Act in a 219-184 vote. The language in the bill would give the U.S. Department of the Treasury sweeping authority to strip the tax-exempt status of nonprofits considered to be “terrorist supporting.” The term is vaguely defined.
If passed by the Senate and signed by President Joe Biden, the would enable the incoming Trump administration to revoke the nonprofit status of groups it considers ideological and political enemies without having to present any evidence of wrongdoing.
Jamie Rashkin
“This sloppy bill thrown before us today contains everything condemned by the Supreme Court,” Rep. Jamie Raskin, D-Md., said during the House hearing on House Resolution 9495.
“The Treasury Department will be able to unilaterally affix the terrorist-supporting label on a not-for-profit group without going to court, without offering any legal proof, without meeting any legal standard and without giving the target an opportunity even to know the evidence against them,” Raskin said.
Only after an organization has been officially designated a “terrorist-supporting organization” can it seek legal remedy — but with the legal burden of proving innocence in the case.
“A sixth grader would know this is unconstitutional.”
“A sixth grader would know this is unconstitutional,” Raskin said. “This is an awful lot of power to vest in any president and a dangerous power to vest in a president who shows no qualms about leveling threats of retribution and revenge against his enemies.”
Alarmed civil liberties and nonprofit groups pleaded with House leadership to vote against the legislation that could have a chilling effect on free speech, religious freedom and advocacy among groups that could be its targets.
“The executive branch could use this authority to target its political opponents and use the fear of crippling legal fees, the stigma of the designation, and donors fleeing controversy to stifle dissent and chill speech and advocacy,” hundreds of nonprofit groups warned in a Nov. 18 letter to House leaders.
“If this bill were to become law, the secretary of treasury could strip a U.S. nonprofit of its tax-exempt status without providing the nonprofit a meaningful opportunity to defend itself before a neutral decisionmaker,” said letter signed by the Baptist Joint Committee for Religious Liberty, Amnesty International, the United Church of Christ, Faith in Action, Human Rights Watch and the NAACP.
“The legislation further does not require disclosure of all the reasons for such a decision or the evidence relied upon to support it. Nor would the government be required to provide any evidence in its possession that might undermine its decision, leaving an accused nonprofit entirely in the dark about what conduct the government believes qualifies as material support.”
The letter also points out that existing U.S. law already forbids providing material aid to terrorist groups by any American organization, and it expresses support for a provision barring the Internal Revenue Service from assessing fines or tax penalties on hostages held abroad.
Jeremy Konyndyk
Refugees International signed the letter because it is designed solely to squash political dissent, President Jeremy Konyndyk said after the vote.
“At Refugees International, we know our bold advocacy for the rights of displaced people around the world — from civilians in Gaza to people fleeing persecution at the U.S. southern border — will make us a target of the incoming administration.”
The legislation is designed to suppress civil society through legal and political intimidation, he said. “This has long been a common tactic of authoritarian demagogues overseas. It must not be enacted here.”
Paul O’Brien
The work of documenting global human rights violations would be severely threatened if the U.S. Senate were to advance the bill, said Paul O’Brien, executive director of Amnesty International.
“This legislation is ripped from a dictator’s playbook and must be voted down. While it offers a façade of due process, this bill is broad, dangerously vague and offers no protection against abuse,” he said. “Members of Congress must recognize the danger posed by this bill to civic space and its potential for silencing civil society organizations, and they must not let it get further.”
The Council on Foundations, Independent Sector, National Council of Nonprofits and United Philanthropy proclaimed support for stopping any nonprofit from funding terrorism.
But H.R. 9495 goes much too far with other provisions including “providing only 90 days for organizations to demonstrate their innocence before revoking their tax-exempt status,” the organizations said.
“Even if the secretary’s decision were successfully reversed, designees would risk irreparable damage to their operations and reputation,” the groups said. “The implication that an organization could be associated with terrorism could cause it to lose not only access to banks and other financial institutions but also the trust of donors and the communities it serves. In the end, the beneficiaries of nonprofits’ work would suffer the most.”
The Trump administration would no doubt use the legislation with calculated vengeance, Raskin warned. “The president-elect has said special counsel Jack Smith should be arrested, former Congresswoman Liz Cheney, head of the former (House) Republican Conference, should be jailed and (former) Chairman of the Joint Chiefs of Staff Mark Miley should be court martialed. You can imagine what they would do to a human rights group that dares to criticize Vladimir Putin or another of their beloved autocrats.”
The bill failed to pass the House the week before but was put forward again by Republican leadership. However, on the second go-round 15 Republicans did not vote and only one Republican voted against the resolution.
Fifteen Democrats joined 204 Republicans in voting in favor of the bill. Those Democrats voting in favor were:
- Colin Allred—Texas
- Yadira D. Caraveo—Colorado
- Ed Case—Hawaii
- Henry Cuellar—Texas
- Don Davis—North Carolina
- Jared Golden—Maine
- Vicente Gonzalez—Texas
- Suzanne Marie Lee—Nevada
- Jared Moskowitz—Florida
- Jimmy Panetta—California
- Marie Gluesenkamp Perez—Washington
- Brad Schneider—Illinois
- Tom Suozzi—New York
- Norma Torres—California
- Debbie Wasserman Schultz—Florida
Observers say it unlikely Biden will sign the bill, should it pass in the Senate, but it is likely the same bill would then come before the next Congress — where Republicans will hold an even stronger hand — and would surely be signed by President-elect Donald Trump.
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ACLU issues urgent call to stop bill that would endanger nonprofits