The news came like a one-two punch from the front lines of the War on Terror: On the morning of October 13, 2004, the United States Department of the Treasury announced it was placing the Islamic American Relief Agency on its list of Specially Designated Global Terrorists. Later that day, agents from the Federal Bureau of Investigation raided the nonprofit's headquarters in Columbia, Missouri.
The Islamic American Relief Agency-USA, known as IARA-USA, had been the object of federal scrutiny since at least 1999, when the United States Agency for International Development rescinded a $4.2 million grant to the charity. At the time, officials at USAID said they revoked the grant because continued funding of IARA "would be contrary to the national defense."
Officials from USAID did not elaborate. But as law-enforcement officers cordoned off Cherry Street and began carting away file cabinets and computers from the now-defunct nonprofit's white-brick office building, the Treasury Department's allegations gave shape to USAID's earlier decision.
"The international offices of IARA were providing direct financial support to Osama bin Laden, al Qaida, Hamas and other terrorist groups," then-Treasury Secretary John W. Snow said in a written statement.
The Treasury Department claimed that IARA-USA was in fact part of the Islamic African Relief Agency, a vast charitable network headquartered in Khartoum, Sudan, with offices in more than 40 countries.
The Treasury Department further alleged that:
· In 1999 the Islamic African Relief Agency provided Osama bin Laden "hundreds of thousands of dollars" of direct financial support.
· The charity had provided "assistance to Taliban fighters" and that a bin Laden "lieutenant.... [had] been the director of IARA's operations in Afghanistan."
· In 1997 an unnamed liaison for bin Laden funneled the terrorist leader's money to IARA. That same year, IARA gave financial support to "Arab terrorists planning to travel to Saudi Arabia to conduct unspecified operations against U.S. military personnel."
· In 2003 IARA moved funds into the Palestinian territories "for use in terrorist activities," adding that some of the funds were raised via collection boxes marked "'Allah' and 'Israel,' signaling that the funds would be directed toward attacks against Israelis."
On the day of the 2004 raid, the Treasury Department froze the charity's assets and named five IARA officials as direct supporters of terrorism.
But for all of the Treasury Department's wide-ranging allegations, precise details remained sketchy. None of the named officials worked at IARA-USA or even lived in the United States. Additionally, FBI agents arrested no one when they raided the organization's Columbia offices.
In late December 2004, IARA fought back, filing a lawsuit to reverse the Treasury Department's designation. It argued that the charity was independent, with no connection to the Sudan-based Islamic African Relief Agency.
"What this is is guilt by association," says Shereef Akeel, a Michigan-based attorney who represents the charity. "Guilt because he has a funny name. Guilt because he happens to be Muslim. Guilt because the organization has 'Islamic' in its name. Guilt because these people are from Africa and the Middle East. The government has not produced a single document saying that IARA-USA supported terrorism in any way."
From a strategic perspective, Akeel says, he's at a disadvantage. Since many of the documents that make up the government's case remain classified, the prosecutors and judge have access to the files, but Akeel and his clients have not been allowed to see what is likely the government's strongest evidence.
"Democracy dies behind closed doors," adds Akeel. "When you are not able to see all the documents and the other side this is not what America is about. We are not on the same playing field."
The charity's bid to distance itself from the Sudanese IARA is further complicated by IARA-USA's own history. Founded in Columbia in 1985 by a group of Sudanese exchange students who wanted to provide "care, shelter and services to refugees" in Africa, it incorporated as a nonprofit under the name Islamic African Relief Agency.
The organization did not legally change its name to Islamic American Relief Agency-USA until 1999, the same year that USAID revoked its funding. Additionally, the group's own literature routinely referred to the Columbia office as the Sudanese charity's "United States affiliate."
Federal courts have routinely denied the group's claim that it is independent of the Islamic African Relief Agency. On February 13 a federal appeals court, after reviewing the classified record, affirmed the lower court, ruling that IARA-USA was in fact a branch of the Sudanese-based charity.
But the biggest blow to the charity's defense came last month, when prosecutors unsealed a 33-count indictment against IARA-USA. The indictment names five IARA-USA board members, including executive director Mukarak Hamed, a resident of Columbia. It also alleges that the charity stole federal grant money from USAID and misrepresented itself to the Internal Revenue Service.
More specifically, the indictment alleges that IARA-USA stole roughly $85,000 from the $4.2 million USAID grant. The indictment alleges that, although the money was intended to fund relief projects in Mali, the charity ended up using $50,000 in grant money to hire a lobbyist to persuade a U.S. Senate Finance Committee to remove IARA-USA from a list of charities under investigation for possible links to terrorism.
"They stole public funds from a federal program. They were supposed to return that money to USAID, but instead they spent it and they spent it in ways that were illegal," says Don Ledford, a spokesman for the United States Attorney's Office in Kansas City.
"They also misled the IRS and federal investigators because they did not report the money they sent to Iraq on their tax forms," Ledford continues. "It's sort of a general fraud not only against the IRS and the government, but the general public in that they presented themselves as a humanitarian organization and when they were asked about their activities, they lied."
The indictment also alleges that between 1990 and 2003, IARA-USA used its nonprofit status to raise money in the U.S., which it then funneled to Iraq a violation of the Iraqi Sanctions Regulation.
The indictment does not allege that IARA-USA or its board members supported terrorism. And although the indictment does state that one of the named individuals, Khalid Al-Sudanee, "met with Iraqi military and other government officials," the word "terrorism" occurs only once in the indictment, when it notes the Treasury Department's allegation.
"The indictment doesn't make any claims about who the money went to in Iraq or how it was spent," says Ledford. "But they never received permission to send anything to Iraq. Those organizations that did have permission to send humanitarian aid were granted permission to send things like food, medical supplies and clothing not cash. The problem when you send cash is that you don't know whether it's going for humanitarian purposes or not."
IARA-USA board members declined several interview requests through their lawyer, Shereef Akeel, who says the recent indictment is evidence that the Treasury Department was unable to build a terrorism case against his clients.
"When it all comes down when the actual indictments came down, there was not a single charge related to terrorism," says Akeel. "Don't get me wrong, these are very serious allegations, but they are significantly and materially different in character. These are tax-code and sanctions violations. We're not talking about sending bombs and missiles to Iraq. We're talking about sending food, humanitarian aid and medicine."
IARA-USA has found an ally in the Council on American-Islamic Relations, a Washington, D.C.-based advocacy group that argues that the government's prosecution of IARA-USA fits a broader pattern.
"This is a fairly common occurrence," says Ibrahim Hooper, a spokesman for CAIR. "When allegations are first made against an organization, all kinds of wild charges are laid, but then the actual indictments have very little resemblance to the original allegations. We've seen this in a number of cases."
But other close observers of the IARA-USA case caution that the recent indictment likely represents only a portion of the government's case against the charity.
Akeel says the charity's leaders plan to mount a vigorous defense. Still, with its assets in deep freeze, IARA-USA had its status as a Missouri corporation dissolved in January 2006, and Akeel says the nonprofit's board members despair that IARA-USA will ever re-form.
"The irony of this whole thing is, as we sit here today, the IARA in Sudan is still open. The one in England was exonerated by its own government and is open. The one in the Netherlands was exonerated by its own government and is open," says Akeel, who insists that the whole episode is merely a case of mistaken identity.
"The only one that's still shut down is the one in Columbia, Missouri, and that's the one that's run by Americans."