Legislators in the United States House of Representatives have voted down a bill that would have granted the Department of the Treasury broad authority to revoke the tax-exempt status of nonprofits deemed to be supporting โterrorismโ.
On Tuesday, the Stop Terror-Financing and Tax Penalties on American Hostages Act, or HR 9495, failed to reach the two-thirds majority needed in the House to pass.
Critics had feared the legislation would have been used against pro-Palestinian and other rights groups.
It was first introduced in response to widespread campus protests against Israelโs war on Gaza โ during which several Palestinian solidarity groups were branded as โpro-Hamasโ by pro-Israeli politicians and news outlets.
But the potentially sweeping implications of the legislation took on new urgency in the aftermath of President-elect Donald Trumpโs win in last weekโs US election.
Even before the election, civil rights advocates had widely condemned the proposed legislation. In a letter signed by more than 100 groups in September, they warned that the bill โraises significant constitutional concernsโ and that because it vests โvast unilateral discretion in the Secretary of Treasury, it creates a high risk of politicized and discriminatory enforcementโ.
Now that Trump is headed back to the White House โ prompting widespread fears of an impending crackdown on civil rights โ advocates warned the legislation could empower the incoming administration with an incredibly dangerous tool to crack down on dissent with few checks and balances.
โThis is much more of a real threat right now,โ Kia Hamadanchy, a senior policy counsel at the American Civil Liberties Union, told Al Jazeera ahead of Tuesdayโs House vote. โWe know that Trump is going to be president. I donโt know if itโs the time to give him additional authority.โ
Losing nonprofit status, Hamadanchy said, would threaten many organisationsโ financial viability by depriving them of tax exemptions. While targeted organisations would have a 90-day window to challenge the designation, they would not necessarily be provided with the underlying evidence used to make the determination against them.
โThe entire process is run at the sole discretion of the secretary of [the] treasury,โ said Hamadanchy. โSo you could have your nonprofit status revoked before you ever have a chance to have a hearing.โ
But being unilaterally declared as โpro-terroristโ has even broader implications, he added.
โYou have the stigma of being designated a terror-supporting organisation,โ Hamadanchy said. โYou have all the legal fees costs youโre going to incur from having to actually go to court to fight this, and you have donors who might be running away from you because they donโt want to deal with the controversy, they might be afraid that if they donate money to you theyโre going to be accused of providing material support to a terror group.โ
No due process
The bill also included a measure that would offer tax relief to US citizens who are being held captive by โterror groupsโ or who are unjustly imprisoned abroad.
By combining both provisions under the same legislation โ with the second one a politically popular one across both parties โ the billโs sponsors were hoping to rush it through with as little opposition as possible, critics said.
But the more insidious element of the bill, the one targeting nonprofits, doubled down on existing legislation.
Providing โmaterial supportโ for US-designated โterrorโ groups is already against the law, noted Lara Friedman, president of the Foundation for Middle East Peace.
โItโs already illegal for [nonprofits] to support terror and the Department of Justice actually has a path to say, โThis is illegal, and this is a foreign terrorist organisation, and hereโs our proof,โโ she told Al Jazeera. โAnd itโs accountable: they can take your nonprofit status away, but thereโs actual due process.โ
Congressman David Kustoff, a Republican and a co-sponsor of the bill, argued when he first introduced the legislation that the current process is insufficient.
โRight now, our ability to crack down on tax-exempt organisations that support terrorism is inadequate,โ Kustoff said in April. โDoing so, under current law, requires a time-consuming bureaucratic process that has sometimes prevented federal authorities from acting.โ
Not just pro-Palestine groups
But removing checks and balances from the process could turn the legislation into a weapon to be deployed against any group the administration in office may not like.
When the bill was first introduced, it generated pushback from across the political spectrum, Friedman noted.
โIncluding from the right that said, โWell, if this is in the hands of a government thatโs anti the things we care about, this could hurt us,โโ she said. โAre we at a point now where Republicans have decided there will never again be a government that could come back to bite them so theyโre going to support unlimited anything? I donโt know. Trump could do all of this by executive order anyway.โ
But critics had expressed hope that Trumpโs re-election would have Democrats in Congress on the lookout for measures, like this one, that could empower him further.
โThe MAGA crackdown on free speech is already starting in Congress,โ Eva Borgwardt, a national spokesperson for the IfNotNow Movement, wrote in a statement. โIt is unconscionable that any Democrat would sign over these sweeping powers to a Trump administration hellbent on destroying not only groups working for peace, equality and justice, but also any semblance of democratic dissent in this country.โ
Basim Elkarra, executive director of CAIR Action, also had warned that the bill โwould set a dangerous precedent, allowing the government to silence and disband organisations on a whim, with no real oversight or accountabilityโ.
โOrganisations advocating for Palestinian rights may be the first targeted,โ echoed Chris Habiby, advocacy director at the Arab American Anti-Discrimination Committee.
โBut they will not be the last.โ (AlJazeera)