Genocide, um, Israel defenders are frustrated at their inability to stomp out US opposition to the slaughter. We published on an earlier alert by Lara Friedman, of legislation passing the House and Senate that would end the not-for-profit status of organizations accused of supporting the anti-Zionist protests as terrorist supporters. We will shortly turn to a new sighting by Friedman, that of the House Oversight and Education and the Workforce committee so-chairs setting forth what amounts to an enemies’ list of 20 organizations, and demanding that Treasury cough up suspicious activity reports on the groups themselves, their officers and all employees.
The only good news about the latest salvo is that it is way more bark than bite. But that does not mean it won’t, as intended, frighten a lot of people who have not worked that out.
We’ll return briefly to the earlier measure, of ending the not-for-profit status of Palestine rights advocates. The justification is that somehow Hamas is behind it. We included this sighting in our earlier post:
Speaker Mike Johnson, claiming that Hamas supports the pro-Palestinian protests at Columbia University and other U.S. colleges, has threatened congressional intervention, including pulling federal funding from the institutions. https://t.co/qy7eYO3Nik
— ABC News (@ABC) April 25, 2024
Under pre-existing law, organizations that actually were getting Hamas money or advocating for Hamas could be stripped of their tax-exempt status for promoting terrorism. The big nasty bit in the new legislation is the near-total elimination of due process rights, so that the “supporting Palestinians = supporting Hamas = supporting terrorism” can be treated as if it were true.
The new gambit is the creation of what sure looks like an enemies list. Hoisted from the letter embedded below:
1. Students for Justice in Palestine (including any individual chapter thereof);
2. Jewish Voice for Peace (including any individual chapter thereof)
3. Within Our Lifetime
4. American Muslims for Palestine
5. IfNotNow
6. Open Society Foundations
7. Rockefeller Brothers Fund
8. Tides Foundation
9. Bill &; Melinda Gates Foundation
10. Solidaire Action
11. Libra Foundation
12. Westchester Peace Action Committee Foundation
13. Muslim Community Network
14. Council on American-Islamic Relations
15. Center for Popular Democracy
16. Peace Action New York State
17. People’s Forum
18. Samidoun
19. Adalah Justice Project
20. Palestine Legal
Mind you, we are not saying these organizations are paragons of virtue. One colleague of the old left persuasion vented his considerable frustration about the lack of transparency among not-for-profits, particularly big ones. Treasury does not publish their tax returns, which are supposed to be public, on a timely basis, and in too many cases, pretty much not at all. This colleague is interested in the interplay between not-for-profit donations and what amounts to soft lobbying, which is not entirely kosher either (political advocacy not-for-profits are 501 (c) 4s, where the entity is tax exempt, but donations to it are not tax deductible). He also contends that there is a lot of donation washing among them, with some like Tides acting as top tier recipients and then distributing funds to others, masking original sources. He also believes that even the big ones pass money to each other. He seems to regard this as decidedly not on the up and provided a concrete example as to why., a suit by Black Lives Matter against Tides. I must confess to not having read it carefully, but the drift of the gist is that Tides held itself out as being able to help organizations like Black Lives Matter manage large donations, but instead is now refusing to turn the entrusted money over and has allegedly mismanaged it. 1
Update: As I was working on this post, The Hill posted a new article confirming our enemies list thesis. House Ways and Means Committee chair Jason Smith is demanding that the Chamber of Commerce ‘splain $12 million it received from Tides. From that article:
House Ways and Means Committee Chair Jason Smith (R-Mo.) has demanded the U.S. Chamber of Commerce answer questions about the more than $12 million its Chamber of Commerce Foundation received from the Tides Foundation, a left-leaning nonprofit, between 2018 and 2022.
In a letter last Monday to Chamber president and CEO Suzanne Clark and foundation President Carolyn Cawley, Smith said that the Tides grants appear to conflict with the Chamber’s mission to support American businesses and raise questions about the groups’ tax-exempt status….
The Chamber and the foundation say the probe is based on a misunderstanding. Eric Eversole, president of the foundation’s Hiring Our Heroes program, told The Hill the funds the foundation received “were charitable contributions from corporations made to the donor advised fund,” a charitable giving vehicle that makes it virtually impossible to trace the ultimate source of the funds.
A Tides spokesperson told The Hill that Smith’s inquiry “is a politically-motivated PR tactic during an election year, driven by actors who disagree with the social justice work of Tides and our partner organizations.”
But Smith made clear he was not satisfied with the initial response.
“The mission statement for the Chamber is pretty obvious: to help American businesses,” he said. “Getting $12 million from Tides and then trying to say it’s really not from Tides, it’s from someone else, that makes me want to look harder.”
Back to the original post. So its is not as if the fever-swampy right doesn’t have a legitimate beef about the cozy practices of some of the big NGOs on the Democrat-friendly side. But that’s not what this House Oversight Committee action is about. It’s an attempt to intimidate.
Specifically, Suspicious Activity Reports are filed with Treasury by banks and other financial institutions when they see money-laundering-like activity. From Investopedia:
A suspicious activity report (SAR) is a tool provided under the Bank Secrecy Act (BSA) of 1970 for monitoring suspicious activities that would not ordinarily be flagged under other reports (such as the currency transaction report). The SAR became the standard form to report suspicious activity in 1996.
SARs can cover almost any activity that is out of the ordinary. An activity may be included in the SAR if the activity gives rise to a suspicion that the account holder is attempting to hide something or make an illegal transaction.
The SAR is filed by the financial institution that observes suspicious activity in an account. The report is filed with the Financial Crimes Enforcement Network, or FinCEN, who will then investigate the incident. FinCEN is a division of the U.S. Treasury.
The financial institution has the responsibility to file a report within 30 days regarding any account activity they deem to be suspicious or out of the ordinary…The goal of the SAR and the resulting investigation is to identify customers who are involved in money laundering, fraud, or terrorist funding…
Some of the common patterns of suspicious activity identified by the Financial Crimes Enforcement Network are as follows
A lack of evidence of legitimate business activity (or any business operations at all) undertaken by many of the parties to the transactions(s)
Unusual financial nexuses and transactions occurring among certain business types (for example, a food importer dealing with an auto parts exporter)
Transactions not commensurate with the stated business type or that are unusual compared with volumes of similar businesses operating locally
Unusually large numbers and/or volumes of wire transfers, repetitive wire transfer patterns
Unusually complex series of transactions involving multiple accounts, banks, and parties
Bulk cash and monetary instrument transactions
Unusual mixed deposits into a business account
Bursts of transactions within short periods, especially in dormant accounts
Transactions or volumes of activity inconsistent with the expected purpose of the account or activity level as mentioned by the account holder when opening the account
Transactions attempting to avoid reporting and recordkeeping requirements.
So the House Oversight Committee is asking Treasury to cough up existing SARs on its 20 suspect organizations and pretty much anyone working for them in an official capacity. Congress has that power. However, Congress cannot and this letter does not ask Treasury or financial institutions generally to engage in additional scrutiny of these 20 groups.
Importantly, Treasury has ignored requests like this. When the Republicans gained control of the House, they asked Treasury for the 100+ SARs on Hunter Biden. None has been produced.
So the value of this exercise is primarily the fear factor. And perhaps the House Oversight Committee gets lucky and the Treasury actually does have some SARs that fall within the ambit of this fishing expedition. You can be sure that the committee will waive the findings as a bloody flag, even if they are trivial in scale and/or explainable.
So while this is an exercise in threat display, it does show that Congresscritters seem intent on punishing too visible pro-Palestine speech and action any way they can. Expect more, and potentially more potent measures.
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1 I would have embedded it, but in the absolutely discourteous way people generate documents now, even taking only the first 24 pages of a 285 page filing still produced an over 11 MB document, when WordPress will only take a 2MB upload. And don’t suggest reducing size. The tools I have will shrink it by only 20%.
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