Does a 'Bad Actors' List Go Too Far?
The financial tool is powerful, but some fear its widening use
Muhammad Salah has an unusual problem for a suburban Chicago father of five. His assets are frozen, and it is technically illegal for him to purchase so much as a Slurpee at 7-Eleven. For the past nine years, Salah, a U.S. citizen, has been on a list of designated terrorists issued by the U.S. Treasury Department. Accused of fundraising for the terrorist wing of the Palestinian group Hamas, Salah has to apply for a license to get a job or even to pay a doctor. "He lives primarily from the charity of his community," says his lawyer, Matthew Piers. "You could argue that even that charity is in violation of the restrictions."
Salah's designation was based largely on a confession made in Israeli military custody after what his lawyer says were rough interrogations. He denies intentionally funding terrorism, but even after a U.S. criminal trial absolved him of terrorism-related charges (convicting him only of obstruction of justice for lying in a civil suit), he remains sanctioned. "He has attempted to live a normal American life," says Piers, noting that two of Salah's children won full college scholarships. "But it has been an incredibly harsh burden." So far, Salah is the only U.S. citizen on the terrorist list, but several U.S.-based Islamic charities, which are also fighting the designation, are listed.
This growing lineup of "specially designated nationals" results in part from the White House's enthusiastic embrace of targeted economic sanctions to battle an expanding set of targets. Although the use of executive orders to freeze enemy assets dates back to the 1970s, President Bush has issued more such orders than any of his predecessors—going after everything from proliferators of weapons of mass destruction to the government of Zimbabwe to figures behind the conflict in Darfur. The orders once were targeted largely at rogue regimes, but President Clinton aimed them at individuals, starting with Colombian drug traffickers.
Bush carried on the practice because it has proved powerful at times. But there are growing concerns that he might be enlarging the target set too far, particularly after his two latest orders. One authorizes freezing the assets of those "who threaten stabilization efforts in Iraq" through violence. Another covers anyone "undermining the sovereignty of Lebanon." Because earlier orders already encompassed terrorists, proliferators, members of Saddam Hussein's regime, and certain Iranians and Syrians, the new orders raise questions about just who is being targeted now. "It fits into this administration's pattern of making very broad claims to executive power," says Phillip Cooper, a professor of public administration at Portland State University. "The language here is so broad it is difficult to understand the full scope of it."
Freeze-out. Today, the list of "specially designated nationals," issued by Treasury's Office of Foreign Assets Control, contains more than 6,000 individuals and institutions prohibited from doing business with U.S. persons. Of those, some 475 names come under an order Bush issued after the 9/11 attacks targeting terrorists. Because most of the 475 are foreigners without U.S. bank accounts, less than $14 million had been frozen by late 2005. But the true punitive effect, officials say, is global: "Not only governments around the world but private actors around the world want nothing to do with [these] people," says OFAC Director Adam Szubin.
The administration's use of these sanctions is finding an increasingly mixed reception on Capitol Hill. Some in Congress complain that the White House has not been aggressive enough in going after Iranians developing weapons of mass destruction or meddling in Iraq. (And word is that Bush is considering designating the Iranian Revolutionary Guard Council to punish it in part for allegedly funneling explosive devices to militants in Iraq.)
But the new executive orders also worry some lawmakers who feel their targets are defined too broadly. "There is concern that the original focus on al Qaeda and terrorist financing is being lost or diluted by increasing attention to other entities that have not attacked the United States," says a Senate aide. U.S. officials insist that they are merely filling in gaps not covered by previous orders. In the case of Iraq, that means more flexibility to go after supporters of Shiite militias or Sunni insurgents.
Still, humanitarian groups worry about limits on their operations. "If you're giving medicine to a charitable facility and they are treating wounded people, I don't think it's normal to interrogate them before giving them medicine," says Mike German, a lawyer with the American Civil Liberties Union. "Yet the provision of that medicine could get your organization designated." Treasury officials dispute that scenario. "The targeted sanctions are focusing very narrowly on bad actors," says Szubin. "The responsibility is not on private U.S. persons to figure out who meets these criteria and avoid dealing with them. The government will put out lists of people."
One problem, as a former Treasury official concedes, is that the designation process is "pretty opaque," leaving many puzzled about the criteria. Treasury officials insist they are becoming more open and that designations are carefully reviewed. Yet most evidence is classified. Further, some alleged violators are kept off the list because of competing diplomatic interests. And it is difficult, though not impossible, to get off the list. This year, only 17 individuals or entities did.
Treasury has created an internal appeals process for people to try to clear their names, but lawyers complain that they never see the bulk of the evidence against their clients because the government refuses to declassify it. And in challenges, federal courts have upheld Treasury's decisions. "Courts have taken the position that by designating an entity as a terrorism supporter, you're not accusing them of a crime," says Wendell Belew, a lawyer who represents an association of Islamic charities. "So they don't have rights like presumption of innocence or due process."
The Senate Banking Committee is examining proposals to require an independent arbitrator to oversee appeals, U.S. News has learned. But lawmakers are understandably cautious. Says one staffer, "We want to make sure people aren't being unfairly caught up in some sort of dragnet, but nobody wants to be seen as protecting the rights of people affiliated with terrorist groups."
This story appears in the September 3, 2007 print edition of U.S. News & World Report.