Center for Security Policy Letter to Department of the Treasury Regarding CAIR and OFAC

by admin on November 6, 2009

in 2009,FF - Iran,Iran

November 6, 2009

Mr. Adam J. Szubin
Deputy Assistant Secretary
Office of Foreign Assets Control
U.S. Department of the Treasury
Treasury Annex
1500 Pennsylvania Avenue, NW
Washington, DC 20220

Dear Mr. Szubin:

We are writing to alert you to possible violations of 31 CFR Part 535 (Iranian Assets Control Regulations) by the Council on American Islamic Relations (CAIR), and to request an investigation into those violations, specifically as to whether a possible transaction between the Interests Section of Iran and CAIR was licensed by the Secretary of the Treasury, and if not, whether it therefore violated the law.

The possible violation is documented in the attached copies of the printed programs distributed by CAIR at their 2006 and 2008 annual fundraisers for the national organization.  At the end of each of these publications, CAIR lists a “Thanks To” section for supporters, and in the printed programs for both 2006 (p. 36) and 2008 (p.20), the Interests Section of Iran is listed on that page.   Finally, we are attaching a copy of the 2009 fundraiser’s registration page showing the cost for a foreign embassy – or possibly the Interests Section of Iran – to purchase a table at the CAIR fundraiser.

Our assessment of these documents is that they make a strong case that the Interests Section of Iran – the representative Iranian government entity and de facto embassy for Iran – may have purchased a table or provided a gift or donation of some kind at the 2006 and 2008 CAIR annual fundraisers, and therefore CAIR may have conducted a transaction with an Iranian government entity.  That transaction may have involved their receiving a donation of financial value, in violation of 31 CFR Part 535, the Iranian Assets Control Regulations.

We suggest that 31 CFR Part 535 is applicable to CAIR’s apparent transaction with the Interests Section of Iran, given the following sections of the regulation:

Sec. 535.201  Transactions involving property in which Iran or Iranian entities have an interest.     No property subject to the jurisdiction of the United States or which is in the possession of or control of persons subject to the jurisdiction of the United States in which on or after the effective date Iran has any interest of any nature whatsoever may be transferred, paid, exported, withdrawn or otherwise dealt in except as authorized.

The Interests Section of Iran would be covered by the following definition found in the Statute’s Section 535.301:

Sec. 535.301  Iran; Iranian Entity.  The term Iran and Iranian Entity includes:   (1) The state and the Government of Iran as well as any political subdivision, agency, or instrumentality thereof or any territory, dependency, colony, protectorate, mandate, dominion, possession or place subject to the jurisdiction thereof….

If CAIR received a donation from the Interests Section of Iran that merited being listed on the “Thanks To” page, the organization appears to have received “property in which Iran or Iranian entities have an interest” contrary to the prohibition contained in Section 535’s subparagraph 310:

Sec. 535.310  Transfer.  The term transfer shall mean any actual or purported act or transaction, whether or not evidenced by writing, and whether or not done or performed within the United States, the purpose, intent or effect of which is to create, surrender, release, transfer, or alter, directly or indirectly, any right, remedy, power, privilege, or interest with respect to any property and, without limitation upon the foregoing, shall include the making, execution, or delivery of any assignment, power, conveyance, check, declaration, deed, deed of trust, power of attorney, power of appointment, bill of sale, mortgage, receipt, agreement, contract, certificate, gift, sale, affidavit, or statement; the appointment of any agent, trustee, or fiduciary; the creation or transfer of any lien; the issuance, docketing, filing, or the levy of or under any judgment, decree, attachment, execution, or other judicial or administrative process or order, or the service of any garnishment; the acquisition of any interest of any nature whatsoever by reason of a judgment or decree of any foreign country; the fulfillment of any condition, or the exercise of any power of appointment, power of attorney, or other power.

If CAIR received a donation from the Interests Section of Iran that merited being listed on the “Thanks To” page,  then: the donation would constitute a “transfer” under the definition of Sec. 535.310, as evidenced in writing in the printed programs from 2006 and 2008; that transfer was performed within the United States; and would constitute a “gift.”  Such a transaction would, moreover, fall within the Statute’s definition of “property” found in subparagraph 311 of Section 535:

Sec. 535.311  Property; property interests.      Except as defined in Sec. 535.203(f) for the purposes of that section, the terms property and property interest or property interests shall include, but not by way of limitation, money, checks, drafts, bullion, bank deposits, savings accounts, debts, indebtedness, obligations, notes, debentures, stocks, bonds, coupons, any other financial securities, bankers’ acceptances, mortgages, pledges, liens or other rights in the nature of security, warehouse receipts, bills of lading, trust receipts, bills of sale, any other evidences of title, ownership or indebtedness, powers of attorney, goods, wares, merchandise, chattels, stocks on hand, ships, goods on ships, real estate mortgages, deeds of trust, vendors’ sales agreements, land contracts, real estate and any interest therein, leaseholds, grounds rents, options, negotiable instruments, trade acceptances, royalties, book accounts, accounts payable, judgments, patents, trademarks or copyrights, insurance policies, safe deposit boxes and their contents, annuities, pooling agreements, contracts of any nature whatsoever, and any other property, real, personal, or mixed, tangible or intangible, or interest or interests therein, present, future or contingent.

We note the apparent relevance of Section 535.701(d), which defines the penalties that might be applicable to the aforementioned possible CAIR violations:

Sec. 535.701 (d)   Attention is directed to 18 U.S.C. 2332d, as added by Public Law 104-132, section 321, which provides that, except as provided in regulations issued by the Secretary of the Treasury, in consultation with the Secretary of State, a U.S. person, knowing or having reasonable cause to know that a country is designated under section 6(j) of the Export Administration Act, 50 U.S.C. App. 2405, as a country supporting international terrorism, engages in a financial transaction with the government of that country, shall be fined under title 18, United States Code, or imprisoned for not more than 10 years, or both.

We suggest there is reasonable cause to believe that there has occurred a violation of the Iranian Assets Control Regulations by the Council on American Islamic Relations in 2006 and 2008.  We look forward to your assessment of the attached documents and determination as to whether an investigation of CAIR’s possible violation of these regulations should go forward.  We would appreciate an opportunity to brief you in greater detail on our findings in this and related matters.

Sincerely,

Frank Gaffney, President, Center for Security Policy

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