Government Overhauls Antiterrorism Rule for Charities in Federal Drive

The Combined Federal Campaign, the annual charity drive for federal workers, has revised its antiterrorism standards for charities that will participate in the 2006 and subsequent campaigns.

Under the new rules, the federal government will no longer specifically require that charities check the names of their employees — and the organizations that charities give money to — against terrorist watch lists. But the government will strongly encourage charities to do so as a key way to help insure that donated money does not finance terrorist actions.

The U.S. Office of Personnel Management, the federal agency that oversees the Combined Federal Campaign, requires that charities participating in the fall 2005 Combined Federal Campaign certify that they do not knowingly employ people or give money to groups whose names appear on two lists of suspected terrorists maintained by the federal government. The requirement prompted a lawsuit by the American Civil Liberties Union and 12 other nonprofit organizations challenging it as unconstitutional.

In the new regulations, effective for the 2006 Combined Federal Campaign, the Office of Personnel Management has a more-general requirement that charities certify that they comply with all laws, executive orders, and rules that bar transactions with people, groups, and countries subject to economic sanctions administered by the Treasury Department.

However, the government said that charities “as a minimum” should follow Treasury Department procedures issued in 2002 called “Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-Based Charities.” The Treasury procedures asked U.S. nonprofit organizations working abroad to consult government watch lists about grant recipients and collect information about them, such as identifying the financial institutions at which foreign grantees maintain accounts.

“Thus,” the government said in an introduction to the new rules, “even though OPM will not mandate list-checking by applicants for the 2006 and subsequent campaigns, it continues to encourage charities” to do so “as a way to help ensure compliance with applicable regulations and as an important part of implementing the type of risk-based compliance program proposed by the [Treasury Department] guidelines.”

Over the past year, some charities have complained that the requirements for 2005 were difficult to follow and overly burdensome.

In a statement, the 13 nonprofit groups that sued the government said that their court action and “continued pressure on the OPM” had forced the government to make the policy change.

“This is a major victory for nonprofit organizations that refused to be subjected to vague government requirements forcing us to become law-enforcement officers for the federal government,” Anthony D. Romero, executive director of the American Civil Liberties Union, said in a statement. The 13 organizations said they now may drop their lawsuit.

The federal government, which has defended its right to require charities to check watch lists, did not spell out in its new rules why it had dropped the mandatory list-checking provision.

However, the government said “the new certification takes into account the fact that the various charities participating in the CFC operate under unique circumstances and it is ultimately their responsibility to ensure compliance” with the Treasury Department’s economic-sanctions program.

The Office of Personnel Management’s final rules were published in the November 7 edition of the Federal Register and are available at http://www.gpoaccess.gov/fr.

The Treasury Department’s voluntary guidelines may be found at http://www.treas.gov.