Grantmakers Without Borders Challenges Treasury's Senate Testimony

On June 20, Grantmakers Without Borders (Gw/oB), a philanthropic network of 130 organizations, sent a letter to the leaders of the Senate Homeland Security and Governmental Affairs Committee objecting to the Department of the Treasury's portrayal of the agency's relationship with the charitable sector as an alliance on counter terrorism issues. The letter states, "Ironically, Treasury's anti-terrorism policies often chill the valuable work of international grantmakers, including Gw/oB's member organizations. Thus, philanthropic money that funds, for example, farming projects or support for tsunami victims is too often delayed or discontinued." On May 10, Chip Poncy, the Director of Treasury's Office of Strategic Policy for Terrorist Financing and Financial Crimes, testified before the committee during a hearing on "Violent Islamist Extremism: Government Efforts to Defeat It." Poncy highlighted Treasury's revised Voluntary Anti-Terrorist Financing Guidelines, which he claimed are "based on extensive consultation between Treasury and the charitable and Muslim communities." While there was consultation on the guidelines, in December 2006, a group of more than 40 U.S. charitable sector organizations called for withdrawal of these guidelines. Despite Poncy's claims about Treasury's outreach efforts, nonprofit requests for dialogue have gone largely unanswered. As Gw/oB's letter states, "Objections from the charitable sector to the Department of the Treasury's anti-terrorism policies have largely fallen on deaf ears." For example, in March, Treasury's Office of Foreign Assets Control (OFAC) published a Risk Matrix for the Charitable Sector on its website without public announcement or comment. This action ignored a June 2006 request from a group of nonprofits that asked Treasury for a public comment period. Similarly, Treasury has not responded to a November 2006 letter from a group of charities seeking a meeting to discuss ways to release frozen funds of charities Treasury has designated as supporters of terrorism to alternative charitable programs. During the question and answer portion of his testimony, Poncy highlighted Treasury's "dual purpose" analysis of the charitable sector and terrorist organizations, saying all of the 44 charities it has designated as supporters of terrorism were engaged in both real charitable work and terrorist support. He said this gray area must be addressed "rather than the unfortunate fiction that there are charities that pretend to be, but aren't, and charities that just do charitable work." He also said Treasury considers that if any aspect of an organization is engaged in terrorist support, then it considers the entire charitable organization to be complicit. Poncy acknowledged that this approach "raises operational issues as to whether or not Treasury can look at minimalizing collateral damage." To date, it has made no efforts to contain "collateral damage." Gw/oB's letter noted that no representatives from the charitable and Muslim communities were called to testify at the congressional hearing, although this would have provided committee members with a more accurate, complete description of the impact Treasury's counter terrorism procedures have had on charitable programs and the lack of trust and credibility Treasury has within the nonprofit sector on these issues.
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