OMB Watch Disappointed With One-Sided Hearing on Anti-Terrorist Financing

PRESS STATEMENT
-For Immediate Release-
April 1, 2008

Contact: Kay Guinane (202) 683-4879 or Brian Gumm (202) 683-4812, bgumm@ombwatch.org

OMB Watch Disappointed With One-Sided Hearing on Anti-Terrorist Financing
Senate Finance Committee Hearing Ignores Concerns of Charities and Foundations

WASHINGTON, April 1, 2008—When it comes to counterterrorism measures, the U.S. Congress has dropped the ball on its oversight responsibilities. This is particularly true of the ineffective and counterproductive ways the current anti-terrorist financing regime has been applied to the U.S. nonprofit sector.

In today's hearing, the Senate Finance Committee heard about terrorist financing issues from only one witness, a Department of the Treasury official. No other perspectives were presented. OMB Watch was not even allowed to hand out a press statement and a copy of a 2007 letter that was addressed to Treasury Secretary Henry Paulsen. The letter objects to unsubstantiated claims of the Treasury Inspector General for Tax Administration about the role of charities in supporting terrorism. The letter also points out how serious flaws in the Terrorist Screening Center's watch lists will harm charities if the IRS uses them to screen U.S. organizations. The letter is available at /files/npadv/TIGTALetter_Paulson.pdf.

While the proposal to have the IRS screen U.S. charities, leaders, and employees against terrorist watch lists was mentioned in the hearing, it was not a priority for discussion. However, Chairman Max Baucus (D-MT) said a statement on the topic would be submitted for the record. In 2007, nonprofits communicated our concerns about this proposal to the Senate Finance Committee, but it appears our concerns are not being taken into account.

Anti-terrorist financing programs have had a widespread and negative impact on the U.S. nonprofit sector, including program cutbacks, decreased international giving, and increased fear of speaking out on important public issues. Witnesses from charities and foundations could have provided the committee with a full picture of the real damage the financial war on terror is causing charities, foundations, and the people we serve. Instead, the public record is left incomplete, which will likely lead to continuation of flawed programs that do little or nothing to stop terrorism.

Representatives of the nonprofit sector would be happy to meet with Senate Finance Committee members and staff, but that is no substitute for open public testimony in a hearing such as the one held today. We call on the committee to remedy this error of omission by holding an oversight hearing into the damage to humanitarian aid and other charitable programs caused by current Treasury policies and procedures.

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OMB Watch is a nonprofit watchdog organization dedicated to promoting government accountability, citizen participation in public policy decisions, and the use of fiscal and regulatory policy to serve the public interest

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