Jun 16, 2:53 PM EDT

Report says terrorism finance laws hurt charities

By ANABELLE GARAY
Associated Press Writer

DALLAS (AP) -- Federal laws targeting the financing of terrorism are vague and have given the government unchecked power over American Muslim charities, the American Civil Liberties Union said in a new report.

The rules have made American Muslims fearful that giving to charity, as required by their faith, could get them mixed up in a federal investigation, said the ACLU report released Tuesday. As a result, some people have stopped donating or limited how much they give, it said.

"It undermines America's image in the Muslim world, alienates Muslims in America ... and keeps charities from doing good work," report author Jennifer Turner said in a conference call with reporters.

Government officials have closed seven Muslim charities, and two other charities have shut down on their own after being raided. The charities were based in Texas, Michigan, Missouri, Illinois, Oregon, Ohio, Massachusetts and New York.

The investigation of the Muslim charities followed the terrorist attacks of Sept. 11, 2001. Turner said they stemmed from Bush administration policies that allowed the closure of charities without a hearing, often using weak or secret evidence.

The ACLU said it based its report on more than 120 interviews with American Muslim leaders and donors and with former Treasury Department officials

It concluded that federal policies have made Muslims afraid they could face criminal prosecution if they gave to a charity without realizing it was under suspicion - even if they only wanted to aid victims of natural disasters, Turner said.

"The law is unclear. When you approach the federal government, the government has not reassured them nor given them guidelines to how to comply with the law," she said.

The Treasury Department denies targeting donors and says it is working to refine the guidance it gives to charities and potential donors.

"We're increasing our engagement with the charitable community to help them protect against terrorist abuse of charity," spokeswoman Natalie Wyeth said in an e-mail.

Last month, a federal judge in Dallas sentenced five members of the now-defunct Holy Land Foundation for Relief and Development to prison. They were convicted last November of funneling money to the Palestinian militant group Hamas. The defendants said they only gave much-needed aid to a volatile region.

Two other high-profile terrorism-financing trials, in Chicago and Florida, ended without convictions on the major counts.

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