Donald Trump speaking at an America First Policy Institute summit on July 26, 2022, in Washington, D.C. Photo: Kent Nishimura/LA Times via Getty Images
The House is set to vote Tuesday on a bill that would let the administration destroy nonprofits it claims support terrorism.
Originally published in The Intercept.
Donald Trump has made no secret of his desire for revenge.
On the campaign trail, he joked about being a dictator on “day one” in office, pledged to jail journalists, and threatened to retaliate against political foes who he felt had wronged him.
Now, just days after he secured a second term in the White House, Congress is already moving to hand a resurgent Trump administration a powerful cudgel that it could wield against ideological opponents in civil society.
Up for a potential fast-track vote next week in the House of Representatives, the Stop Terror-Financing and Tax Penalties on American Hostages Act, also known as H.R. 9495, would grant the secretary of the Treasury Department unilateral authority to revoke the tax-exempt status of any nonprofit deemed to be a “terrorist supporting organization.”
The resolution has already prompted strong opposition from a wide range of civil society groups, with more than 100 organizations signing an open letter issued by the American Civil Liberties Union in September.
With Trump set to return to office, it’s more urgent than ever to beat the legislation back, said Kia Hamadanchy, a senior policy counsel at the ACLU.
“This is about stifling dissent and to chill advocacy, because people are going to avoid certain things and take certain positions in order to avoid this designation,” Hamadanchy told The Intercept. “And then on top of that you have a president-elect who’s spent a lot of time on the campaign trail talking about punishing his opponents and what he wants to do to student protesters — and you’re giving him another tool.”
It’s unclear how Democrats will view the bill in light of Trump’s return to power. A spokesperson for Rep. Lloyd Doggett, D-Texas, who did not oppose a previous version of the nonprofit provision, told The Intercept Doggett is likely to vote against the measure following Trump’s reelection.
The current version — which was introduced by Rep. Claudia Tenney, R-N.Y., and co-sponsored by Brad Schneider, D-Ill., and Dina Titus, D-Nev. — is paired with a provision that would provide tax relief to American hostages held by terror groups and other Americans unjustly imprisoned abroad.
Hamadanchy said combining the two provisions was likely a ploy to push the nonprofit-terror bill through with as little opposition as possible.
“They attached it to a super popular bill that everyone likes because they want to make it hard for people to vote ‘no,’” Hamadanchy said. “The reality is that if they really wanted the hostage thing to become law, they’d pass that by itself.”
No Evidence Needed
Under the bill, the Treasury secretary would issue notice to a group of intent to designate it as a “terrorist supporting organization.” Once notified, an organization would have the right to appeal within 90 days, after which it would be stripped of its 501(c)(3) status, named for the statute that confers tax exemptions on recognized nonprofit groups.
The law would not require officials to explain the reason for designating a group, nor does it require the Treasury Department to provide evidence.
“It basically empowers the Treasury secretary to target any group it wants to call them a terror supporter and block their ability to be a nonprofit,” said Ryan Costello, policy director at the National Iranian American Council Action, which opposes the law. “So that would essentially kill any nonprofit’s ability to function. They couldn’t get banks to service them, they won’t be able to get donations, and there’d be a black mark on the organization, even if it cleared its name.”
The bill could also imperil the lifesaving work of nongovernmental organizations operating in war zones and other hostile areas where providing aid requires coordination with groups designated as terrorists by the U.S., according to a statement issued last year by the Charity & Security Network.
“Charitable organizations, especially those who work in settings where designated terrorist groups operate, already undergo strict internal due diligence and risk mitigation measures,” the group wrote. “As the prohibition on material support to foreign terrorist organizations (FTOs) already exists, and is applicable to U.S. nonprofits, this proposed legislation is redundant and unnecessary.”
If it proceeds, the bill will go to the House floor in a “suspension vote,” a fast-track procedure that limits debate and allows a bill to bypass committees and move on to the Senate as long as it receives a two-thirds supermajority in favor.
It is already very illegal to provide material support for terrorism. And material support laws have been used, at times aggressively, to bring criminal charges against people and groups accused of supporting proscribed terrorist groups abroad.
The new bill on terror designations for tax-exempt nonprofits, however, would slash through the pesky red tape — constitutional checks and balances — of due process, presumption of innocence, and other protections afforded to defendants accused in criminal court of providing material support to terror groups.
Pro-Palestine Groups at Risk
In the past year, accusations of support for terrorism have been freely lobbed at student protesters, aid workers in Gaza, and even mainstream publications like the New York Times. In unscrupulous hands, the powers of the proposed law could essentially turn the Treasury Department into an enforcement arm of Canary Mission and other hard-line groups dedicated to doxxing and smearing their opponents as terrorists.
With very few guardrails in place, the new bill would give broad new powers to the federal government to act on such accusations — and not just against pro-Palestine groups, according to Costello.
“The danger is much broader than just groups that work on foreign policy,” said Costello. “It could target major liberal funders who support Palestinian solidarity and peace groups who engage in protest. But it could also theoretically be used to target pro-choice groups, and I could see it being used against environmental groups.
Costello added, “It really would be at the discretion of the Trump administration as to who they target, with very little recourse for the targeted organization.”
An earlier version of the bill passed the House in April by a vote of 382-11.
While the April bill languished in committee in the Senate, the language of the current resolution is virtually identical. Pro-Israel pressure groups, including the Anti-Defamation League, the Foundation for Defense of Democracy, and the Republican Jewish Coalition have all lobbied on the bill, records show. (None of the three groups immediately responded to requests for comment.)
In addition to the open letter from the ACLU and 125 other religious, human rights, and civil liberties groups, more than 40,000 people have signed a petition asking members of Congress to oppose the bill.
Whatever concerns might have arisen since Trump’s return to office, some of the Democrats pushing the measure are citing the hostage provision to justify their position.
A spokesperson for Titus, the new bill’s co-sponsor, told The Intercept, “The congresswoman continues to support the bill because it brings tax relief to Americans wrongfully detained overseas and held hostage.”
“Not Aware of Any Limitations in the Bill”
In April, much of the opposition to the first iteration of the bill came from members of Congress on both sides of the aisle who have broken with their parties’ leadership on support for Israel’s war on Gaza. Among the Democrats, opponents of the bill included all the members of the progressive Squad. Across the aisle, Rep. Thomas Massie, R–Ky., a tea party alum with a libertarian bent who has broken with GOP support for Israel, also voted against the measure.
This time around, dissent might not be limited to the 11 members who voted “nay” in April.
Doggett, the Texas Democrat who will likely vote against the bill, did not vote on the April version of the provision. He came to his decision this time around after raising concerns at a mark-up hearing held on September 11.
At the hearing, Doggett asked a number of pointed questions of Robert Harvey, the deputy chief of staff for the Joint Committee on Taxation, a nonpartisan committee of experts tasked with explaining the bill to members of Congress.
“As I understand it, all the Treasurer has to do to deny tax exemption is to mail a notice to the organization involved saying: ‘You’re a terrorist supporting organization, we have found you are providing material support, and you’re denied your exemption?'” Dogget asked.
“That’s correct, Mr. Doggett,” Harvey replied.
“And does the bill require the Treasury to disclose the reasons for denying the tax-exempt status?” Doggett asked.
“I don’t believe they have to disclose,” Harvey said.
“They don’t have to provide any evidence that they relied on?” Doggett said.
“Not that I’m aware of, Mr. Doggett.”
Finally, Doggett asked Harvey a question that he wryly described as far-fetched.
“I would just ask you — and I don’t think this a realistic possibility — let’s suppose we had an administration that vowed to wreak vengeance on its opponents,” Doggett said. “To prosecute lawyers, political operatives, illegal voters, and corrupt election officials to the fullest extent of the law, and impose long prison sentences on them; someone who believes that those who don’t clap for him are traitors; someone who believes that someone who worked to bring him to justice in the courts or worked tirelessly to assure his defeat — would there be any limitation on that president’s Treasury secretary on designating a ‘terrorist supporting organization’ and strip that organization of its nonprofit status?”
“Mr. Doggett, that requires me to do some speculation,” Harvey replied. “But I am not aware of any limitations in the bill.”
Noah Hurowitz is a journalist based in New York City and the author of "El Chapo: The Untold Story of the World's Most Infamous Drug Lord." His work has appeared in New York Magazine, Business Insider, Rolling Stone, and many more.
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