Texas-Based Charity Sues U.S. Over Frozen Assets

A U.S.-based Muslim charity whose assets were frozen by the government filed a federal lawsuit Friday demanding that millions of dollars in donations be released.

The Holy Land Foundation for Relief and Development sued the Justice Department, Treasury Department and State Department in U.S. District Court here seeking immediate relief from the asset freeze.

The group, based in Richardson, Texas, said the government violated its constitutional rights Dec. 4 by putting a hold on millions of dollars in donations and seizing computers, files and furniture from its offices in Texas, California, New Jersey and Illinois. The government took action against the charity because of its alleged support of the Islamic militant movement Hamas.

The group alleged in its legal brief that some of the information authorities used to freeze the assets was gathered by Israeli police officers who used “physical and psychological torture and other forms of extreme physical and psychological coercion” of suspected Hamas members in the Middle East.

The asset freeze, the group said in its lawsuit, could ruin the charitable organization, and it occurred “without notice, without a hearing, without a warrant, without probable cause, without statutory authority and without any rational basis.”

“They took everything,” said lawyer Nancy Hollander of the raids by FBI agents. “I believe that [the foundation is] being unfairly targeted; Holy Land is an American charitable foundation that works to foster peace and opposes terrorism. And many of the donors to Holy Land are giving in accordance with their religion.”

Hollander said Holy Land has provided charitable aid “all over the world, including in the United States.”

Federal authorities had no comment Friday, saying they could not discuss the issue because of the lawsuit and the ongoing enforcement action.

In announcing the order Dec. 4, President Bush charged that Holy Land used its tax-exempt status to raise $13 million during the year, much of which, he said, ultimately went to Hamas.

Bush called Hamas one of the deadliest terrorist organizations in the world, citing what he said were the groups’ claims of responsibility for suicide bombings in Israel that killed 28 people in the days before the asset freeze.

Treasury officials at the time said a wealth of evidence had shown links between Hamas and Holy Land.

“This is not a case of one bad actor stealing from the petty cash drawer and giving the stolen money to terrorists,” said Treasury Secretary Paul H. O’Neill, who was named in the lawsuit. “This organization exists to raise money in the United States to promote terror.”

The enforcement action marked the first time the administration moved against a U.S.-based charity in its crackdown on terrorist organizations after the Sept. 11 attacks on the World Trade Center and the Pentagon.

Holy Land officials have steadfastly denied any links to terrorist organizations. The charity raises most of its money through donations in the U.S., then sends the funds overseas. Some foundation money goes to widows and children of Hamas members killed by Israeli forces. But the charity contends that such aid represents a “negligible percentage of those receiving assistance.”

The prominent charity raised $207,000 at a 1995 Los Angeles event at which the keynote speaker exhorted the crowd to “finish off the Israelis. Kill them all,” according to an FBI memo signed by Dale L. Watson, the bureau’s assistant director of counter-terrorism. U.S. authorities used the 49-page FBI document to support the enforcement action.

But Holy Land’s lawsuit contends that the FBI memo was based on coerced and unreliable information provided by Israeli authorities, thus making the asset freeze unfair and improper.

The Watson memo, the lawsuit said, purports to rely in part on documents allegedly seized by Israeli authorities during a search of an alleged Holy Land office in Jerusalem on May 7, 1995. It contends that Israeli authorities selectively used some of those seized documents “to produce a false picture of Holy Land’s operations.”