had its assets frozen in February 2004, pending an investigation. In September
2004, the Treasury Department's Office of Foreign Assets Control (OFAC)
designated it as a "specially designated global terrorist," but gave no reasons
for doing so. Only after AHIF challenged its designation in court did the
government come forward with an explanation for why it had been designated, well
after AHIF's time to defend itself had passed.
Judge Garr King ruled that OFAC violated AHIF's due process
rights by never providing it with any specification of the factual or
legal basis for its proposed designation. As a result, AHIF was forced
to guess at what OFAC's concerns were. As the court stated, "where the
government has not leveled specific charges at an organization, the risk
of erroneous designation is possible, and the value of additional
safeguards is substantial." (Decision at 34). The court ordered
further briefing on the consequences of the due process violation.
The court also ruled that the law's prohibition on the
provision of "material support" to designated entities was
unconstitutionally vague. The court noted that the government had
defined "material support" as anything done that had the "natural
tendency" to affect a group, or anything that "promotes the interest or
cause of" a designated group that has "real importance or great
consequences." The court found that the prohibition was not
"sufficiently clear so as not to cause persons of common intelligence
necessarily to guess at its meaning." (Decision at 56).
The court also ruled, for the first time, that an order
freezing an entity's assets is a seizure under the Fourth Amendment. It
found that the freeze deprived AHIF of any opportunity to use its assets
for an extended period (more than four years already), and that
therefore the seizure would have to satisfy Fourth Amendment scrutiny.
Because the government had argued that the freeze was not a seizure, the
court ordered further briefing on whether the seizure is consistent with
the Fourth Amendment.
The court found that OFAC had acted in an arbitrary and
capricious manner in denying AHIF the right to use any of its blocked
assets to defend itself, since OFAC imposed an arbitrary cap on the
attorney fees without considering the fact that it was OFAC's own
litigation strategy that needlessly caused AHIF to defend itself when
AHIF did not even know what facts or issues OFAC was relying upon for
the proposed designation.
The court rejected other challenges made by AHIF, including
its argument that OFAC's reliance on secret evidence denied it a
meaningful opportunity to defend itself, and its argument that the
designation was "arbitrary and capricious." However, its decision on
whether the designation was "arbitrary and capricious" was based on an
incomplete record, because as it ruled, AHIF was not provided the notice
required to afford it a meaningful opportunity to defend itself.
David Cole, a law professor at Georgetown University, who
argued the case for AHIF, stated, "We are pleased that the court
recognized that a process in which our client had to defend itself
against wholly unspecified charges violates due process, that the law's
prohibitions are unconstitutionally vague, and that shutting down an
entity indefinitely, as designation does, must satisfy the Fourth
Amendment. We look forward to addressing the court further on these
issues. In particular, it seems clear to us that because AHIF was
denied its constitutional right to a fair process, the court should not
have addressed the propriety of the designation until OFAC has provided
a fair process."
Alan Kabat of Bernabei & Wachtel, PLLC, co-counsel for AHIF,
stated that "We are hopeful that if AHIF is given adequate notice and
opportunity to respond to the charges of the government, which the court
ruled has not been provided, the court will find that the government has
not made its case that AHIF contributed to terrorist groups. We are
also pleased that the court recognized that the Multicultural
Association of Southern Oregon was denied its First Amendment rights by
the government's vague standards in prohibiting contact or work with
designated entities. Finally, it is ironic that the court recognizes
that the Guantanamo detainees, who are not American citizens, actually
have greater due process rights than does AHIF, since the detainees'
attorneys are allowed access to classified information about their
clients, while we are not allowed access to classified information about
AHIF."
