Al Haramain Islamic v. U.S. Dept. of Treasury

Decision Date06 November 2008
Docket NumberCivil No. 07-1155-KI.
PartiesAL HARAMAIN ISLAMIC FOUNDATION, INC., and Multicultural Association of Southern Oregon, Plaintiffs, v. UNITED STATES DEPARTMENT OF the TREASURY, Henry M. Paulson, Jr., Office of Foreign Assets Control, Adam J. Szubin, United States Department of Justice, and Alberto R. Gonzales, Defendants.
CourtU.S. District Court — District of Oregon

Thomas H. Nelson, Welches, OR, J. Ashlee Albies, Portland, OR, David D. Cole, Washington, D.C., Lynne Bernabei, Alan R. Kabat, Bernabei & Wachtel, PLLC, Washington, D.C., for Plaintiffs.

Jeffrey S. Bucholtz, Jonathan Eli Zimmerman, Eric Joseph Beane, Sandra M. Schraibman, Anthony J. Coppolino, U.S. Department of Justice, Civil Division, Federal Programs Branch, Washington, D.C., for Defendants.

OPINION AND ORDER

KING, District Judge:

Plaintiffs Al Haramain Islamic Foundation, Inc. ("AHIF-Oregon"1) and Multicultural Association of Southern Oregon ("MCASO") challenge AHIF-Oregon's designation as a terrorist organization, and the associated freezing of its assets, by bringing suit against the United States Department of the Treasury, the Office of Foreign Assets Control ("OFAC"), the United States Department of Justice, and individuals associated with those agencies.2 Before the court are Defendants' Motion to Dismiss and for Summary Judgment (# 36) and Plaintiffs' Motion for Summary Judgment (# 60).

BACKGROUND
I. Statutory and Regulatory Framework

Plaintiffs' claims arise out of the President's actions under the International Emergency Economic Powers Act ("IEEPA"). Pursuant to the IEEPA, the President may declare a national emergency to "deal with any unusual or extraordinary threat, which has its source in whole or substantial part outside the United States[.]" 50 U.S.C. § 1701(a). Such threat is described as a threat to "the national security, foreign policy, or economy of the United States." Id. After declaring a national emergency, the President may:

investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition. holding, withholding, use, transfer, withdrawal, transportation. importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property. subject to the jurisdiction of the United States[.]

50 U.S.C. § 1702(a)(1)(B). He may do so without providing notice or an opportunity to be heard. When the President exercises this authority, he must immediately provide a report to Congress identifying the reasons for his declaration, including why the circumstances "constitute an unusual and extraordinary threat[.]" 50 U.S.C. § 1703. In any designation subject to judicial review, the government may submit to the court ex parte and in camera any classified information on which it relied. 50 U.S.C. § 1702(c).

President Bush declared a national emergency on September 23, 2001, stating that the "grave acts of terrorism" and the "continuing and immediate threat of future attacks" on the United States "constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States." Exec. Order No. 13,224, 66 Fed.Reg. 49,079 (Sept. 23, 2001) ("E.O.13,224"). By this executive order, he authorized the Secretary of the Treasury to block contributions of funds, goods or services "to or for the benefit of" 27 individuals and entities he listed in an annex to the executive order. Id. at § 1(a).

Pursuant to IEEPA's requirement that he provide a report to Congress, on September 24, 2001, President Bush explained in a Message to Congress:

I have identified in an Annex to this order eleven terrorist organizations, twelve individual terrorist leaders, three charitable or humanitarian organizations that operate as fronts for terrorist financing and support, and one business entity that acts as a front for terrorist financing and support. I have determined that each of these organizations and individuals have committed, supported, or threatened acts of terrorism that imperil the security of U.S. nationals or the national security, foreign policy, or economy of the United States.

President Declares National Emergency, Sept. 24, 2001, available at http://www. whitehouse.gov/news/releases/2001/09/20010924.html.

In his executive order, the President also delegated authority to the Secretary of Treasury to designate other foreign groups or individuals who have committed or pose a risk of committing acts of terrorism, or who are "owned or controlled by, or ... act for or on behalf of those" entities designated by the President or those subsequently designated by the Secretary of Treasury. E.O. 13,224 at § 1(b) and (c). Finally, the President delegated authority to the Secretary of Treasury to designate entities who "assist in, sponsor, or provide financial, material, or technological support for, or financial or other services to or in support of, such acts of terrorism or those persons" designated by the President or by the Secretary of Treasury, or for being "otherwise associated" with a designated entity. Id. at § 1(d)(i) and (ii). The Secretary of Treasury may utilize his designation authority only after consulting with the Secretary of State and Attorney General. The entities designated by the President or by the Secretary of Treasury arc referred to as specially designated global terrorists ("SDGT").3

The President authorized the Secretary of the Treasury to issue regulations to implement the executive order and to redelegate those functions if necessary. Pursuant to regulations issued by OFAC, a designated entity may seek a license to engage in any transaction involving blocked property. 31 C.F.R. § 501.801.802. Such an entity may also seek "administrative reconsideration" of a designation. 31 C.F.R. § 501.807.

In 2002, President Bush amended E.O. 13,224 and added the Taliban and Mohammed Omar to his initial list of twenty-seven SDGTs. Exec. Order No. 13,268, 67 Fed.Reg. 44,751 (July 2, 2002).

The IEEPA and regulations implementing the executive order specify criminal and civil penalties for violations of licenses, rulings, regulations, or orders. 50 U.S.C. § 1705; 31 C.F.R. § 594.701.

II. Al-Haramain Islamic Foundation ("AHIF")

The unclassified administrative record reflects the following:

AHIF, the headquarters of AHIF-Oregon, is a Saudi Arabian-based charity that at one point purportedly operated in fifty countries, with an annual budget of between $30 and $80 million. The Treasury Department describes the organization as:

one of the principal Islamic NGOs [non-governmental organization] providing support for the al Qaida network and promoting militant Islamic doctrine worldwide.... Terrorist organizations designated by the U.S. including Jemmah Islammiya, Al-Ittihad Al-Islamiya, Egyptian Islamic Jihad, HAMAS, and Lashkar E-Taibah received funding from [AHIF] and used [AHIF] as a front for fundraising and operational activities.

AR0346.

AHIF was involved in planning attacks against the U.S. Embassies in Kenya and Tanzania in 1998. In addition, AHIF supplied financial assistance to Jemmah Islammiya, which bombed a nightclub in Bali in 2002. A senior AHIF official was involved in directing a Bangladeshi national to conduct surveillance on U.S. consulates in India for potential terrorist attacks. When the Bangladeshi national was arrested in 1999, he was carrying explosives and detonators to attack U.S. diplomatic missions in India. An AHIF branch in Pakistan supported the Taliban before it was removed from power. The government believes Osama bin Laden may have provided the financial support necessary to found an AHIF branch in Albania. AHIF's Ethiopian branch financed an al Qaida-associated terrorist organization, Al-Ittihad Al-Islamiya.

The United States cooperated with Saudi Arabia to stop the activities of AHIF, with each government acting jointly as well as unilaterally. Between 2002 and 2004, pursuant to its authority under E.O. 13,224, the Secretary of Treasury designated AHIF offices in Afghanistan, Albania, Bangladesh, Bosnia-Herzegovina, the Comoros Islands, Ethiopia, Indonesia, Kenya, the Netherlands. Pakistan, Somalia, and Tanzania. Even though these offices were designated, and assets frozen, the United States and Saudi Arabia obtained reports that the offices in Bosnia and Somalia had reopened or were still active in 2002. Saudi Arabia dissolved "the Riyadh-based Al-Haramain Islamic Foundation" and directed its assets to the "Saudi National Commission for Relief and Charity Work Abroad" in February of 2004. AR0327; AR0948. Until June 19 2008, AHIF's headquarters in Saudi Arabia had not been designated. Then-Secretary of the Treasury, Paul O'Neill, reported that AHIF was not designated because it "is dedicated to promoting Islamic teachings." AR0103. AHIF does, however, have the distinction of being named in the 9-11 Commission's Staff Report on Terrorist Financing, published in 2004, as an organization that supports al Qaeda and related terrorist groups. AR0935.

On June 19, 2008, the day before plaintiffs' reply brief was due, the government filed a notice with the court that OFAC had designated "the world-wide organization of the Al Haramain Islamic Foundation" for the reason that it has "acted for or on behalf of, has assisted in, sponsored, or provided financial, material or technological support for, or other services to or in support of acts of terrorism and al Qaida and other SDGTs" and is owned or controlled by Aqeel Al-Aqil. Defs.' Not. of Filing at 2.

III. Aqeel Al-Aqil4

The unclassified administrative record reflects the following:

Aqeel Al-Aqil,...

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