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Court Rules Government’s Freezing of Charity Assets Unconstitutional

A federal court on Tuesday ruled for the first time ever that the government cannot freeze an organization’s assets for suspected ties to terror financing without first obtaining a warrant.

The American Civil Liberties Union of Ohio had filed the lawsuit in November 2008 on behalf of an Ohio-based charity called KindHearts for Charitable Humanitarian Development, Inc., after the Treasury Department froze the group’s assets without notice, a warrant or a hearing. The Treasury Department claimed that it was investigating whether Kindhearts should be deemed a “specially designated global terrorist.”

The court ruled yesterday that the government first has to show a judge that there’s probably cause to believe the group supports terrorism, before Treasury can immobilize the group’s funds.

“This historic ruling rejects the government’s argument that the Fourth Amendment’s prohibition against unreasonable searches and seizures does not apply when a case raises national security and foreign policy concerns,” said Hina Shamsi, the ACLU lawyer who argued the case to the court, in a statement released today. “The ruling provides a much-needed judicial check on executive power. Until now, the administration has been able to unilaterally and indefinitely freeze the assets of a U.S. corporation without probable cause and a warrant.”

In fact, KindHearts has still never been found to have done anything wrong and was never designated a terrorist organization, though it was effectively shuttered when the Treasury Department froze its assets. That move made it a crime for anyone to do business with KindHearts, which in any event couldn’t access its own property or funding.

In Tuesday’s ruling, U.S. District Judge James Carr of the Northern District of Ohio ruled that the administration must obtain a warrant based on probable cause before seizing an organization’s assets, noting that the executive branch’s “domestic actions – even when taken in the name of national security – must comport with the Fourth Amendment.”

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