The Treasury Inspector General for Tax Administration (TIGTA) released a report on the Internal Revenue Service's (IRS) function to identify instances in which charitable organizations may be linked to terrorist-related activities. The report, Screening Tax-Exempt Organizations' Filing Information Provides Minimal Assurance That Potential Terrorist-Related Activities Are Identified, calls on the IRS to use the consolidated Terrorist Screening Center (TSC) list as opposed to manually reviewing all tax-exempt documents and comparing the information with the Treasury list maintained by the Office of Foreign Assets Control (OFAC). Meanwhile, use of the OFAC list by private companies for similar screening has caused innocent people to be flagged as terrorists. Why then should the IRS expand its screening program when problems with the lists have already been identified? The report highlights the claim that the "use of charities and nonprofit organizations is a significant source of alleged terrorist activities." Yet, Treasury has never provided documentation to back up its claims that the charitable sector is a significant source of terrorist financing. In response to the TIGTA report, Senate Finance Committee Chairman Max Baucus (D-MT) wrote a letter to Treasury Secretary Henry Paulson expressing his concern.

Baucus' letter states:
TIGTA investigators found that the current IRS screening process has never identified any person or organization with links to terrorists and that the agency is using a system that is, at best, woefully inefficient. IRS personnel told TIGTA that they primarily look for "Middle Eastern sounding names" when considering which tax filings to flag for further review.

For more information, see this article from the latest Watcher.

In its press release the group origninally filed its FOIA request in August 2005, and noted:

"An increasing number of private companies, including banks, mortgage companies, car dealerships, health insurers, landlords and employers screen consumers names against the OFAC list...Consumers discover the OFAC list when they are told that they cannot make a purchase, open an account or do business because their name appears on a terror list."

The complaint notes that Treasury has no process for removing names placed on the list erroneously, or for distinguishing common names similar to thoseon the list. Their March 2007 report documents the inaccuracies and discriminatory impact of the list.

For more information see this AP article




US, EU Grantmaker Groups Publish Accountability Principles for International Philanthropy
The Council on Foundations (COF) and the European Foundation Center have published Principles of Accountability for International Philanthropy, the result of a two-year consultative process of grantmakers and stakeholders from four continents. The COF press release announcing the document says:

Voluntary and aspirational, the Principles and accompanying Practices aim to guide and support funders in making better decisions in pursuing their international missions and objectives, and to provide a framework that will encourage and assist more foundations to get involved internationally....

The document encompasses seven concise Principles based on an identified set of core values that foundations should aspire to embrace. They address integrity; understanding; respect; responsiveness; fairness; cooperation and collaboration; and effectiveness. They seek to fill a specific niche and complement activities undertaken in Europe and the United States that deal with broader issues of accountability, effectiveness and good practice. The Principles are a living document that will be reviewed and updated periodically.

While the document does not specifically address ways to protect against diversion of charitable resources to terrorists, it is similar the Principles of International Charity published by a group of U.S. nonrprofits in March 2005 as an alternative to the problematic Treasury Department Guidelines.

Posted by Kay Guinane, 12:30:18 PM

Friday, May 11, 2007