No surprise to consistent readers of this blog that the court’s ruling in al-Haramain was a major blow to the Department of Justice, as well as to The United States Department of the Treasury Office of Foreign Assets Control (“OFAC”). OFAC had originally blocked the funds of and conditionally designated the al-Haramain Islamic Foundation pending an investigation into their activities.  According to the ruling from Judge Vaughan Walker in al-Haramain:

“On February 19, 2004, the Treasury Department issued a press release announcing that OFAC had blocked Al-Haramain Oregon’s assets pending an investigation of possible crimes relating to currency reporting and tax laws; the document contained no mention of purported links between plaintiff Al-Haramain Oregon and Osama bin-Laden. ¶¶ 30-31.

Soon after the blocking of plaintiff Al-Haramain Oregon’s assets on February 19, 2004, plaintiff Belew spoke by telephone with Soliman al-Buthi (alleged to be one of Al-Haramain Oregon’s directors) on the following dates: March 10, 11 and 25, April 16, May 13, 22 and 26, and June 1, 2 and 10, 2004. Belew was located in Washington DC; al-Buthi was located in Riyadh, Saudi Arabia. During the same period, plaintiff Ghafoor spoke by telephone with al-Buthi approximately daily from February 19 through February 29, 2004 and approximately weekly thereafter. Ghafoor was located in Washington DC; al-Buthi was located in Riyadh, Saudi Arabia. (The FAC includes the telephone numbers used in the telephone calls referred to in this paragraph.) ¶¶ 34-35.

In the telephone conversations between Belew and al- Buthi, the parties discussed issues relating to the legal representation of defendants, including Al-Haramain Oregon, named in a lawsuit brought by victims of the September 11, 2001 attacks. Names al-Buthi mentioned in the telephone conversations with Ghafoor included Mohammad Jamal Khalifa, who was married to one of Osama bin-Laden’s sisters, and Safar al-Hawali and Salman al-Auda, clerics whom Osama bin-Laden claimed had inspired him. In the telephone conversations between Ghafoor and al-Buthi, the parties also discussed logistical issues relating to payment of Ghafoor’s legal fees as defense counsel in the lawsuit. Id.

In a letter to Al-Haramain Oregon’s lawyer Lynne Bernabei dated April 23, 2004, OFAC Director Newcomb stated that OFAC was considering designating Al-Haramain Oregon as a Specially Designated Global Terrorist (SDGT) organization based on unclassified information “and on classified documents that are not authorized for public disclosure.” ¶ 36. In a follow-up letter to Bernabei dated July 23, 2004, Newcomb reiterated that OFAC was considering “classified information not being provided to you” in determining whether to designate Al-Haramain Oregon as an SDGT organization. ¶ 37. On September 9, 2004, OFAC declared plaintiff Al-Haramain Oregon to be an SDGT organization. ¶ 38.

In a press release issued on September 9, 2004, the Treasury Department stated that the investigation of Al-Haramain Oregon showed “direct links between the US branch [of Al-Haramain] and Usama bin Laden”; this was the first public claim of purported links between Al-Haramain Oregon and Osama bin-Laden. ¶¶ 39-40.

Two things really stick out here: 1) al-Haramain was blocked and investigated prior to their “first public claim of purported links between Al-Haramain and Osama bin-Laden” and 2) the conversations on which these purported links were discovered were obtained illegally according to the court in al-Haramain. Some commentators have made a fuss about whether mentioning Osama bin Laden’s brother-in-law and two clerics is enough to get you declared a terrorist organization. From what I have seen it just might very well be. Moreover, there is the issue of these conversations being obtained through illegal wiretapping methods.

First, it should be noted that the burdens of “probable cause” and/or “beyond a reasonable doubt” do not necessarily apply to OFAC. In fact there is no statutorily mandated burden of proof which OFAC must satisfy in order to block a person’s funds or in order to place that party on the Specially Designated Nationals (SDN) list. That’s because OFAC operates as an executive agency; one provided with a great amount of deference in carrying out their mission. As some readers may know, the judiciary generally defers to the Executive in matters of national security allowing the President to exercise a broad range of power to protect the nation. It is under this umbrella that OFAC operates. As such, I have seen cases where designation as an SDN was based on very little (publicly available) information. Moreover, OFAC does not always explain to designated parties why they are being targeted for economic sanctions. Often those reasons do not come out until someone has requested a reconsideration or initiated litigation in federal court. In sum, if there are those that feel that this evidence was too scant to allow for designation, I would say think again. It might not be right but it might be legal.

Second, the issue of using illegally obtained evidence. This in a way relates back to the first issue. While it maybe true that they obtained information that allowed for the final designation through possibly–depending on whether the ruling holds up–illegal wiretapping methods, they had already initiated an investigation against al-Haramain without that information. As such, they already were suspicious of Al-Haramain and were preparing to designate them.It is my belief that even without the evidence obtained through the wiretaps, that OFAC would have designated al-Haramain. This is based on what I have seen from working on SDN removal cases; it doesn’t take much to be designated in the first place and its often difficult to discern why exactly a party was designated.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.