Aiding Friends And Foes In Palestine

Despite the reconciliation agreement between Fatah and Hamas, the United States may maintain its support for the Palestinian Authority. But U.S. law forbids -- and punishes -- assistance to Hamas. Here's why Washington may have trouble getting around it.

By Douglas N. Greenburg and Derek D. Smith

The reconciliation agreement signed in April between Fatah and Hamas, which called for the creation of an interim Palestinian unity government followed by elections later this year, raises a number of difficult issues for the United States. Among these is whether Washington can lawfully continue to provide aid to the Palestinian Authority (PA) if it includes Hamas as an equal partner. After all, existing U.S. law designates Hamas as a terrorist organization and thus prevents the United States from aiding it in any way. Although the unity pact suffered a setback when a planned conference in Cairo on Tuesday to announce a new government was postponed, negotations are ongoing. Should the two sides eventually succeed in creating a unity government, continued U.S. funding for the PA could be illegal. Despite this, given the PA’s dependence on U.S. aid, Washington may decide that financially sustaining the Palestinian leadership is vital to the peace process or other strategic interests. As a result, it may attempt to continue aiding elements of the PA that remain unaffiliated with Hamas. Yet absent specific congressional authorization, such a strategy will face significant legal obstacles.

U.S. law has long prohibited citizens from providing support to or doing business with Hamas, which has been on the Treasury Department’s designated terrorist list since 1995 and the State Department’s list of designated Foreign Terrorist Organizations since 1997. Under the U.S. criminal code, individuals cannot knowingly provide an FTO with “material support or resources,” which is broadly defined as any “property or service,” including money, training and advice, safe haven, transportation, and weapons, among other forms of assistance. Violation of this statute is punishable by up to 15 years in prison, or life in prison if the support results in the death of any person.

The Treasury Department’s Office of Foreign Assets Control (OFAC) also enforces sanctions against Hamas and its affiliates, forbidding U.S. persons from engaging in any transactions with a designated terrorist, and further requiring that U.S. financial institutions block any transactions involving assets of FTOs. OFAC frequently imposes civil fines against violators of these sanctions, who may also suffer criminal penalties.

The U.S. government has enforced these laws by bringing several high-profile criminal prosecutions against various individuals and charitable organizations for raising funds for Hamas. In 2008, for example, a federal jury in Texas convicted five U.S. citizens on charges of providing material support to Hamas through their ostensibly charitable organization, the Holy Land Foundation, resulting in sentences of 15 to 65 years in prison. The Treasury Department has also targeted charities acting as fundraising fronts for Hamas, such as the Al-Aqsa Foundation, an international relief organization formerly based in Germany that Treasury designated a terrorist entity in 2003, aiming to put them out of business by freezing their bank accounts.

Current U.S. law, then, clearly forbids and severely punishes a wide range of assistance to Hamas. But what if Hamas takes a leading role in another organization not designated as an FTO -- specifically, the PA? This question arose in 2006, when Hamas members defeated Fatah in that year’s Palestinian elections. Hamas’ presence in the PA posed a significant challenge to U.S. interests in the Palestinian territories. Even so, the PA remained highly dependent on U.S. aid, receiving more than $400 million per year from Washington, and it was unclear whether the PA and its president, Fatah leader Mahmoud Abbas, could survive without it.

As a result, the U.S. Congress responded to Hamas’ 2006 electoral victory by passing the Palestinian Anti-Terrorism Act (PATA), which conditioned assistance to the PA on a presidential certification that Hamas did not effectively control any “ministry, agency, or instrumentality” of the PA and made “demonstrable progress” toward five benchmarks related to transparency, democratization, and antiterrorism. PATA provided a national security waiver that allowed the White House to continue funding various entities in the PA presidential office and judiciary branch, so long as Hamas did not control the recipient. It also permitted funding to nongovernmental organizations that provide aid to the West Bank and Gaza relating to humanitarian needs and democracy promotion.

Ultimately, the dilemma over funding the PA resolved itself in 2007, when Hamas broke with Fatah and the PA and took control of Gaza. This separation freed OFAC to allow all transactions with the Fatah-controlled PA in the West Bank. But should Hamas rejoin the PA as a result of the recent unity arrangement, there may be pressure on OFAC to take a tougher stance. Indeed, in recent appropriations bills, Congress has made assistance to a “power-sharing government” in Palestine contingent on compliance with PATA.

Congressional authorization to fund a Hamas-affiliated PA would likely overcome existing legal prohibitions. In the face of PATA, however, there is a substantial risk that providing aid without specific congressional authority would violate U.S. criminal laws. Although there are several arguments for exempting the PA from the U.S. laws against dealing with FTOs, none is particularly convincing. To begin with, it could be argued that although U.S. law prohibits individuals from assisting Hamas, the president’s constitutional powers to conduct foreign affairs might exempt officials carrying out the government’s international policy from criminal prosecution. The existing laws and regulations, however, make federal officials just as liable for providing aid to FTOs as any private citizen, and any contrary argument would rest, at best, on untested grounds.

Additionally, it could be argued that because Hamas does not control the PA outright, aid to the PA is not the same as aid to Hamas. This may seem persuasive in some circumstances; for instance, if Hamas held only a small minority of the PA’s parliamentary seats. But that is hardly the case with regard to the current reconciliation agreement, which places equal power in the hands of Fatah and Hamas to form an interim government and appoint various ministers through consensus. Moreover, according to OFAC’s regulations, Hamas needs only an interest in PA transactions, rather than full control of the PA itself, to trigger sanctions against funding the PA. In fact, following Hamas’ election success in 2006, OFAC determined that Hamas had “a property interest” in PA business; this may have some bearing on funding the new unity government. Much like the OFAC regulations, the U.S. criminal code does not clearly specify when an FTO’s interest in an organization becomes so great that it is unlawful to provide that organization with “material support.” Moreover, the serious penalties associated with violating these criminal laws demand caution when considering whether to aid an organization in which an FTO such as Hamas plays a significant role.

 Another possible method for the United States to continue funding the PA is an exception in the criminal code for persons who provide “personnel,” “training,” or “expert advice or assistance” to an FTO with approval of the secretary of state and the attorney general. This exception could allow the United States to advise PA security and police forces, but it would not permit direct financial aid. Similarly, the United States could attempt to convince non-Hamas elements in the PA to use and disseminate U.S. funds without any knowledge or participation of Hamas. Yet such a plan may not withstand legal scrutiny. If non-Hamas PA officials failed to honor the agreement and Hamas gained access to U.S. funds, prosecutors might one day argue that the persons who made the donation knew that such a result was likely and disregarded the risk. Such “willful blindness” could serve as the basis of a criminal prosecution. Or, the whole government may turn out to be Hamas-affiliated, rendering any such distinction meaningless.

The Obama administration could also instruct OFAC to grant specific exemptions so that the United States could fund particular entities within the PA. OFAC followed this strategy in 2006, announcing at the time that “consistent with current foreign policy” it was “authorizing U.S. persons to engage in certain transactions in which the PA may have an interest.” Mirroring some of the exceptions listed under PATA, OFAC exempted transactions with the Palestinian judiciary, non-Hamas members of the Palestinian Legislative Council, and various entities controlled by Abbas.

Although the United States sought to continue supporting non-Hamas elements of the PA in 2006, it is doubtful that OFAC could repeat the same tactic now, thanks to the relationship between Fatah and Hamas. In 2006, Hamas campaigned against Fatah and tensions between the two camps remained strong after the election. Armed conflict broke out the following year despite the creation of a de facto unity government, splintering the PA. Should the current reconciliation agreement come to fruition, however, it would create a joint power-sharing government. As a result, it may be more difficult for OFAC to justify special exemptions on the grounds that certain entities within the PA are insulated from Hamas; by all appearances, they will be intertwined.

Lastly, OFAC could simply delist Hamas or continue allowing aid to the PA under a “general license.” But this would not do away with the independent criminal ban on providing “material support” to an FTO. To remove Hamas from the criminal law banning FTO support, either the secretary of state or Congress would have to revoke the designation of Hamas as an FTO -- a highly unlikely scenario.

Should the Obama administration want to continue funding a Hamas-affiliated PA to maintain U.S. influence or otherwise promote U.S. interests, current law gives him little leeway to do so. PATA places numerous restrictions on any aid to a Hamas-affiliated PA, and any attempt by the White House to continue funding the PA in spite of PATA risks violating criminal statutes. Short of removing Hamas as a designated terrorist organization and FTO, the safest way to proceed would be on the basis of legislative action that allows White House to support the PA even under a Fatah-Hamas coalition. Without it, the Obama administration’s legal options are limited. No matter how much it may want to continue aiding the PA, then, its continued support may well be illegal.

-This commentary was published in The Foreign Affairs on 20/06/2011
-DOUGLAS N. GREENBURG served as a staff member of the September 11 Commission. DEREK D. SMITH is the author of Deterring America: Rogue States and the Proliferation of Weapons of Mass Destruction. Both are attorneys at Latham & Watkins, LLP