Freedom to Give

DALLAS — While the U.S. Justice Department ponders how it will retry its troubled terrorism finance case against a now- defunct Muslim charity, debris from the recent mistrial here shows signs of piling up at the White House doorstep.

The nation’s biggest terrorism finance case ended so badly for the government that it has thrown into question the Bush administration’s original order to shut down the Holy Land Foundation for Relief and Development six years ago.

Back then, President Bush accused the charity of aiding Palestinian terrorists. But similar allegations presented by federal prosecutors during the two-month trial in the president’s home state fell dramatically short of convincing a Texas jury.

The panel of eight women and four men failed to convict Holy Land or any of its five accused former officials on any of their 200 combined criminal counts of supporting terrorists. It was the first time the administration’s view of the charity had been argued in court because the original executive order shuttering Holy Land was never subjected to full judicial review.

Though attorneys and all five defendants in the case are still bound by a gag order, legal observers and three jurors say the recent trial exposed significant weaknesses in the government’s 15-year, multimillion-dollar investigation of Holy Land.

Before the mistrial was declared, vote tallies read in open court showed that the jury had acquitted one defendant on all counts and two others on many counts, and was deadlocked on convicting the remaining defendants of anything. Jurors later interviewed by The Times said they were far from agreement on any convictions.

“I kept expecting the government to come up with something, and it never did,” juror Nanette Scroggins, a retired claims adjuster, said in her only interview about the case. “From what I saw, this was about Muslims raising money to support Muslims, and I don’t see anything wrong with that.”

Fellow juror William Neal, an art director who said his father worked in military intelligence, agreed that the government never produced “any clear evidence linking” Holy Land funding to the U.S.-designated terrorist group Hamas.

“If the government can shut them down and then not convince a jury the group is guilty of any wrongdoing, then there is something wrong with the process,” Georgetown University law professor David Cole said.

George Washington University law professor Jonathan Turley said the criminal trial derailed the government’s long-publicized assertions about Holy Land.

“From the beginning, the allegations were highly suspect and only got worse,” said Turley, who has handled a number of national security cases.

Indeed, Turley said, if the government had begun with the troubled criminal case, it might never have succeeded in closing down the foundation administratively because its disputed evidence would have come to light years ago.

Such criticisms echoed those of Holy Land lawyers who had long complained that the charity was railroaded out of existence without due process of law and based on secret evidence.

“Before a person’s domestic pet can be taken away for being vicious, they are at least entitled to a hearing. So what happened to Holy Land wouldn’t happen to a dog,” John Boyd, one of Holy Land’s lawyers, said in an interview more than a year before the court imposed a continuing gag order.

Ironically, the government’s decision to seek criminal sanctions may have succeeded most in exposing weaknesses in the administration’s overarching case against Holy Land. Georgetown’s Cole said prosecutors failed to produce evidence that the charity provided “one penny to support terrorist activities.”

And in the end, despite years of FBI surveillance, wiretaps and seized documents, the case presented in court largely came down to conflicting testimony between an anonymous Israeli security official and a former American diplomat over which neighborhood charities in the Gaza Strip and West Bank were or were not affiliated with Hamas.

The government’s allegations not only proved unpersuasive but engendered skepticism among some jurors.

“The whole case was based on assumptions that were based on suspicions,” said juror Scroggins, who added: “If they had been a Christian or Jewish group, I don’t think [prosecutors] would have brought charges against them.”

An entrenched political, social and military organization among Palestinians, the Islamic militant group Hamas has long been an adversary of Israel and has been designated a terrorist organization by the U.S. since 1995. Last year, it won Palestinian parliamentary elections and now controls the Gaza Strip, home to 1.5 million people.

A White House spokesman declined to comment about the government’s actions against Holy Land and referred calls to the Department of Justice, where a press official said he was precluded from making statements by the judge’s gag order.

Former federal prosecutor Thomas Melsheimer of Dallas said he was surprised by the outcome and thought the Justice Department should drop the case since it already had closed down the foundation.

“Look, the fact that a jury in a law-and-order state like Texas failed to convict a group of defendants that the government labeled as supporting terrorism is a stunning result,” he said.

White House ties to the case date back to December 2001, when Bush used a Rose Garden news conference to announce executive action against Holy Land. He accused the foundation of raising money in the U.S. that “pays for murder abroad.”

“The Holy Land Foundation claims that the money it solicits goes to care for needy Palestinians in the West Bank and Gaza,” Bush said. Instead, he said, the funds were “used by Hamas to support schools and indoctrinate children to grow up to be suicide bombers” and to “recruit suicide bombers and to support their families.”

Acting under authority of the International Emergency Economic Powers Act, Bush said the Treasury Department was freezing Holy Land’s assets and seizing its offices.

“The message is this: Those who do business with terror will do no business within the United States or anywhere else the United States can reach,” Bush said.

Holy Land officials, most of them American citizens, disavowed terrorism and denied any financial ties to Hamas or other violent groups. Their lawyers launched legal challenges to the executive order but failed to get an evidentiary hearing to rebut the government’s underlying allegations.

In 2003 an appeals court ruled against the charity, citing “secret evidence” that defense lawyers said they never saw, nor ever had described to them. Finally, in March 2004, the U.S. Supreme Court refused without comment to hear the case.

A criminal indictment issued against Holy Land and five former officials in 2005 closely tracked allegations supporting the administration’s 2001 seizure order. In both cases, the government cited wiretaps, anonymous FBI informants and Israeli intelligence to claim Hamas was the primary beneficiary of the charity’s largesse.

“We have not alleged that Holy Land pulled the trigger or lit the fuse of a bomb,” one Justice Department official said in an interview after the indictment was released.

“But they have facilitated those who pulled the trigger or lit the fuse.”

Holy Land’s alleged role became less direct by the time prosecutors went before a federal jury, however.

Rather than accusing it of funding Hamas directly, prosecutors said Holy Land funneled money through zakat committees, local charities that the government asserted were controlled by Hamas.

To buttress that allegation at trial, the government relied solely on Israeli intelligence, calling on two Israeli security agents who testified anonymously in a courtroom closed to the general public.

The Israeli government’s role in the case was criticized even before the trial opened.

Long before the gag order was imposed, Boyd accused the Justice Department of prosecuting Holy Land “at the behest of Israel.”

Law professor Turley was among legal experts who warned that evidence provided by Israel could be seen as tainted, saying it was “dangerous to rely on intelligence” from a country at the center of a long-standing dispute with Hamas.

In the aftermath of the mistrial, Turley said, it was clear “this case was riddled with highly suspect evidence, some of it derived from Israeli intelligence.”

By LESLIE EATON, New York Times
October 23, 2007
DALLAS — A federal judge declared a mistrial on Monday in what was widely seen as the government’s flagship terrorism-financing case after prosecutors failed to persuade a jury to convict five leaders of a Muslim charity on any charges, or even to reach a verdict on many of the 197 counts.

The case, involving the Holy Land Foundation for Relief and Development and five of its backers, is the government’s largest and most complex legal effort to shut down what it contends is American financing for terrorist organizations in the Middle East.

President Bush announced he was freezing the charity’s assets in December 2001, saying that the radical Islamic group Hamas had “obtained much of the money it pays for murder abroad right here in the United States.”

But at the trial, the government did not accuse the foundation, which was based in a Dallas suburb, of paying directly for suicide bombings. Instead, the prosecution said, the foundation supported terrorism by sending more than $12 million to charitable groups, known as zakat committees, which build hospitals and feed the poor.

Prosecutors said the committees were controlled by Hamas and contributed to terrorism by helping Hamas spread its ideology and recruit supporters. The government relied on Israeli intelligence agents, using pseudonyms, to testify in support of this theory.

But prosecutors appeared to have made little headway in convincing the jury.

The case involved 197 counts, including providing material support to a foreign terrorist organization. It also involved years of investigation and preparation, almost two months of testimony and more than 1,000 exhibits, including documents, wiretaps, transcripts and videotapes dug up in a backyard in Virginia.

After 19 days of deliberations, the jury acquitted one of the five individual defendants on all but one charge, on which it deadlocked. A majority of the jurors also appeared ready to acquit two other defendants of most charges, and could not reach a verdict on charges against the two principal organizers and the foundation itself, which had been the largest Muslim charity in the United States until the government froze its assets in late 2001.

James T. Jacks, the first assistant United States attorney, said in court that the government would retry the case. Both prosecutors and defense lawyers have been barred from discussing the case in the press, and Chief Judge A. Joe Fish said that order continued in force.

The decision is “a stunning setback for the government, there’s no other way of looking at it,” said Matthew D. Orwig, a partner at Sonnenschein Nath & Rosenthal here who was, until recently, United States attorney for the Eastern District of Texas.

“This is a message, a two-by-four in the middle of the forehead,” said Mr. Orwig, who was appointed by President Bush and served on the United States attorney general’s advisory subcommittee on terrorism and national security. “If this doesn’t get their attention, they are just in complete denial,” he said of Justice Department officials, who he said might not have recognized how difficult such cases are to prosecute.

David D. Cole, a professor of constitutional law at Georgetown University, said the jury’s verdict called into question the government’s tactics in freezing the assets of charities using secret evidence that the charities cannot see, much less rebut. When, at trial, prosecutors “have to put their evidence on the table, they can’t convict anyone of anything,” he said. “It suggests the government is really pushing beyond where the law justifies them going.”

And Jimmy Gurulé, who was an under secretary of the Treasury when that agency froze Holy Land’s assets, described the outcome as “the continuation of what I now see as a trend of disappointing legal defeats” in terror-financing cases. Two previous cases, in Illinois and in Florida, ended with hung juries and relatively minor plea deals, he said.

In the Holy Land case, defense lawyers told the jury that their clients did not support terrorism but were humanitarians trying to lessen suffering among impoverished Palestinians. Though their clients may have expressed support for Hamas, the defense argued, that was before the United States government designated it as a terrorist organization in 1995.

The outcome of the trial emerged during a morning of confusion for jurors and those on both sides of the case, who had been waiting to hear the verdict since the jury returned it on Oct. 18. It was sealed until Monday because Chief Judge Fish had been out of town.

In the verdict, the jury said it failed to reach a decision on any of the charges against the charity and two of its main organizers, but acquitted three defendants on almost all counts.

But in a highly unusual development, when the judge polled the jurors on Monday, three members said that verdict did not represent their views. He sent them off to deliberate again; after about 40 minutes, they said they could not continue.

In the end, one defendant, Mohammed El-Mezain, was acquitted on all but one charge, involving conspiracy, on which the jury failed to reach a verdict. A mistrial was declared on that count, and on all the other counts involving the other defendants.

The exact nature of the jurors’ disputes, and their reasoning in the cases, remained unclear after the verdict. Chief Judge Fish barred reporters from trying to contact the jurors, although he said he would provide jurors with reporters’ telephone numbers if they wanted to discuss the case.

One juror said the panel had found little evidence against three defendants and was evenly split on charges against Shukri Abu Baker, the former charity’s president, and Ghassan Elashi, its chairman.

“I understand there’s no magical mystery check with ‘Hamas’ written on it, but over all the case was pretty weak,” said the juror, William Neal, 33, an art director from Dallas. “There really was nothing there for me, no concrete evidence.” Mr. Neal said the government should not retry the case — a call picked up by Holy Land’s supporters, who packed the courtroom during the trial, and who carried some defendants around on their shoulders outside the courthouse chanting “Praise God” in Arabic.

“The government spent 13 years and came back empty-handed,” said Khalil Meek, who is president of the Muslim Legal Fund of America and spokesman for an alliance called Hungry for Justice. “I would call that a victory — an overwhelming defeat for the government.”

Lawyers for some defendants said their clients were being prosecuted because of their family ties to Hamas leaders. One defendant, Mufid Abdulqader, is the half-brother of Khalid Mishal, a Hamas leader who has been designated as a terrorist by the United States government.

Another Hamas official and designated terrorist, Mousa abu Marzook, is married to a cousin of Mr. Elashi, who was sentenced last year to almost seven years in prison for having financial dealings with Mr. Marzook and for violating export laws.

Mr. Elashi’s daughter Noor, who was in the courtroom every day during the trial, said she considered her father a hero. “He was singled out for feeding and clothing and educating the children of Palestine,” she said. “Giving charity to the Palestinian people has become a crime in this country.”

December 4, 2001 / CNN

Officials warn financial strike may be just the beginning

WASHINGTON (CNN) –The Bush administration Tuesday froze the U.S. assets of a Texas-based Islamic foundation that calls itself a charity, saying the organization acts as a front to finance the militant wing of the Palestinian group Hamas.

The administration also targeted two banks based in the Middle East, accusing them of ties to Hamas.

The move marks the broadening of the U.S. financial war on terrorism in the wake of the September 11 attacks.

It is the first time that the U.S. crackdown has included organizations believed to finance terrorist groups other than al Qaeda, the terrorist network headed by Osama bin Laden believed responsible for the attacks on New York and Washington.

Hamas claimed responsibility for this weekend’s suicide bombings that killed 25 Israelis, but Bush administration officials said they were working on Tuesday’s action before those attacks.

At a White House announcement, President Bush said the Treasury Department acted at midnight Monday to freeze the assets and accounts of the Holy Land Foundation for Relief and Development, based in Richardson, Texas.

Top Treasury Department officials warned the financial strike may just be the beginning and that other groups suspected of financing Hamas militants may find their assets frozen.

On Tuesday morning, FBI and Treasury agents, along with local law officers, raided the foundation’s Texas headquarters, seizing assets and records and executing what an FBI agent described as a “blocking order.”

Agents also raided foundation offices in San Diego, California, Paterson, New Jersey, and Bridgeview, Illinois.

“The message is this: Those who do business with terror will do no business with the United States, or anywhere else the United States can reach,” said Bush, calling Hamas “one of the deadliest terror organizations in the world today.”

In a document posted on the front door of its Texas office, the Holy Land Foundation disputed the government’s allegation linking it to terrorism.

Bush said the foundation, which is registered with the Internal Revenue Service as a charity, raised $13 million in the United States last year.

“The money raised by the Holy Land Foundation is used by Hamas to support schools and indoctrinate children to grow up into suicide bombers,” Bush said.

“The money raised by the Holy Land Foundation is also used by Hamas to recruit suicide bombers and support their families.”

Foundation: ‘A smear campaign’

The foundation is the largest Muslim charity in the United States. The organization’s statement said it was a humanitarian organization that has worked to serve the needy since 1989.

“We feel the Holy Land Foundation has been unfairly targeted in the nationwide smear campaign to undermine Muslims and the institutions that serve them,” the statement read.

The foundation may file suit in federal court to have its assets “unfrozen.” The organization is represented by the high-profile national law firm of Akin, Gump, Strauss, Hauer & Feld.

In a mission statement posted on its Web site, the foundation said it works to find “solutions for human suffering through humanitarian programs that impact the lives of the disadvantaged, disinherited and displaced peoples suffering from man-made and natural disasters.”

The statement said the foundation’s focuses on “Palestinian refugees in Jordan, Lebanon and Palestine.”

Treasury officials conceded that a “substantial amount” of the money raised does go to worthy causes, but insisted that Holy Land’s primary purpose has been to subsidize Hamas.

They said the organization solicited funds from unsuspecting donors to finance its activities.

“This is not a case of one bad actor stealing from the petty cash drawer and giving those stolen monies to terrorists. This organization exists to raise money in the United States to promote terror,” said Treasury Secretary Paul O’Neill, who attended the White House announcement along with Attorney General John Ashcroft.

Officials said the investigation into the foundation’s activities began “long before” Bush became president, that the government had “substantial and credible evidence” and that the foundation has been financing terrorism but proof could not be presented publicly without “compromising confidential sources and methods.”

Holy Land Foundation’s Chief Executive Officer Shukri Abu Baker said the government’s action “is not based on any legal grounds. This is a political decision.”

Baker also said the agents operated under a presidential order because they did not have enough evidence to go to court, even after investigating the organization since the mid-1990s.

The two other targeted organizations, which are not believed to have any assets in the United States, are the Al Aqsa Bank in the West Bank and Beit El-Mal Holdings Co., based in the West Bank and Jordan.

Administration officials said the United States was encouraging other nations to freeze whatever assets they might have for those two groups and said the two could not do business in the United States.

“They are direct arms of Hamas, established and used to do Hamas business,” O’Neill said.

In addition, Ashcroft said the government previously had frozen assets of an Internet company believed to share office space and employees with the Holy Land Foundation.

The company, Infocom, had its assets seized and frozen six days before the September 11 terrorist attacks, Ashcroft said. Infocom also is based in Richardson, Texas.

Both groups, Ashcroft said, had an “early sponsor” in Mousa Abu Marzook, a top Hamas official deported by the United States in 1997.

Hamas assets frozen since 1995

Ashcroft said Hamas is intent on destroying the Middle East peace process.

“By freezing the financial apparatus of Hamas, we signal that the United States of America will not be used as a staging ground for the financing of those groups that violently oppose peace as a solution to the Israel-Palestinian conflict,” Ashcroft said.

“We won’t tolerate it any more than we will tolerate the financing of groups that on September 11 attacked our homeland.”

Assets of Hamas have been frozen in the United States since 1995 when the group was listed as a foreign terrorist organization.

But under a Bush executive order in October, the Treasury Department was given the authority to go after the financiers of terrorist groups beyond al Qaeda.

The last major announcement on this front came a month ago when the administration added 62 organizations and individuals to the list, saying most of them operated as part of two financial groups providing support to bin Laden and al Qaeda: the al Taqwa and al Barakaat networks.

Officials allege those organizations and their affiliates gave financial as well as communications and other support to al Qaeda.

So far, $61 million in assets belonging to al Qaeda or the Taliban — the Afghan regime that harbored al Qaeda and bin Laden — have been frozen worldwide, O’Neill said.

— CNN correspondents Tim O’Brien, John King, Kelly Wallace and Susan Candiotti contributed to this report.