Broad New Exec. Order Targets Iraq-Related Finances

In a little-noticed executive order issued on Tuesday, President Bush directed the Treasury Department to block the U.S.-based financial assets of anyone deemed to have threatened “the peace or stability of Iraq or the Government of Iraq” or who “undermin(e) efforts to promote economic reconstruction and political reform in Iraq.”

The order empowers Treasury, in consultation with the State and Defense Departments, to target those individuals or organizations that either “have committed, or … pose a significant risk of committing” acts of violence with the “purpose or effect” of harming the Iraqi government or hindering reconstruction efforts. It applies to “U.S. persons,” a category including American citizens. It had not previously been disclosed — and still hasn’t — that U.S. persons are abetting the Iraqi insurgency, nor that Iraqi insurgents have property in the United States, raising questions about who in fact the order targets.

“The part where they reserve lots of discretion to themselves is the list of conditions that goes beyond determination of acts of violence. ‘Threatening the peace or stability of Iraq or the Government of Iraq,’ that could be anything,” says Ken Mayer, an expert in executive orders and a University of Wisconsin political scientist. “Think of the possibilities: it could be charities that send a small amount of money (to groups linked to) the insurgency, or it could be the government of Iran that has assets in the U.S. and has money that flows through a U.S. bank or something like that.”

The order permits the targeting of those who aid someone else whose assets have been blocked under the order — wittingly or not. And under Section Five, the government does not have to disclose which organizations are subject to having their assets frozen:

For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that, because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render these measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in Executive Order 13303 and expanded in Executive Order 13315, there need be no prior notice of a listing or determination made pursuant to section 1(a) of this order.

The scope of the order has raised civil-liberties concerns. “Certainly it is highly constitutionally questionable to empower the government to destroy someone economically without giving notice,” says Bruce Fein, a Justice Department official in the Reagan administration. “This is so sweeping it’s staggering. I’ve never seen anything so broad that it expands beyond terrorism, beyond seeking to use violence or the threat of violence to cower or intimidate a population. This covers stabilization in Iraq. I suppose you could issue an executive order about stabilization in Afghanistan as well. And it goes beyond even attempting violence, to cover those who pose ‘a significant risk’ of violence. Suppose Congress passed a law saying you’ve committed a crime if there’s significant risk that you might commit a crime.”

Representatives from the ACLU are still studying the executive order. But preliminarily, says spokeswoman Liz Rose, the order appears to expand the assets-seizure provisions of the Patriot Act, known as Section 806, to organizations linked to Iraqi insurgent groups. Much like the order, Section 806 allows the government to seize assets of banned organizations without prior notice and without a conviction of involvement in banned activity. “It is by far the most significant change (in the law) of which political organizations need to be aware,” the ACLU wrote in 2002, contending that the vagueness of Section 806 potentially implicates legitimate political protest as well as material support for terrorism.

Mayer isn’t as certain. “I don’t think this is the kind of authority that poses any kind of broad risk, because they’re freezing assets, they’re not confiscating them. They’re making it impossible to move them around,” he says. “Look at the other examples after 9/11. There are comparable (executive) orders freezing the assets of groups like the Holy Land Foundation. This looks a little bit different: they’re not formally designating groups as terrorist, but they want the authority to block their money from going around.”

That leaves unanswered a basic question: why was the order issued? Tony Snow briefly addressed that question on Tuesday — a day when the news was dominated by the morning release of the National Intelligence Estimate on terrorism and the Senate’s marathon debate on Iraq. Snow led his press briefing with a description of the executive order and described it as “a gap left in other executive orders to make sure that we have the means to go financially after anybody who is trying to go after the efforts to secure freedom and democracy in Iraq.” When asked who the act was aimed at, Snow replied, “Well, what this is really aimed at is insurgents and those who come across the border,” meaning the Syrian and Iranian borders.

The order itself makes no mention of either country, and focuses exclusively on financial assets within the United States deemed to assist the Iraqi insurgency. It’s possible that the order means to target charitable or business organizations inside the U.S. that have ties to Syrian or Iranian entities considered by the Bush administration to be in league with the insurgents.

Contacted last night, a White House official declined to elaborate beyond Snow’s description and referred questions to the Treasury Department. A message left with a Treasury counterterrorism spokesperson today was not immediately returned.

UPDATE: Treasury’s side of the story is available here.