The US House of Representatives on Thursday passed a bill that would grant the Treasury Department the power to revoke the tax-exempt status of any non-profit it deems to be a “terrorist supporting organisation”, which could put many pro-Palestinian groups critical of Israel’s war on Gaza in danger.
HR 9495, the Stop Terror-Financing and Tax Penalties on American Hostages Act, passed by a vote of 219-184, which was split mainly along party lines. Fifteen Democrats, however, voted in favour of the bill, and a lone Republican voted against it.
The legislation, which was introduced by a bipartisan cadre of Democrats and Republicans, has two parts. The first would provide tax-exempt status and relief for American hostages being held abroad. The second part would give the treasury secretary the authority to issue notices to organisations, with the intent being to label them “terrorist” supporting groups.
Any group that has received this notice could file an appeal. However, the law gives the US Treasury Department the power to issue these designations without explaining its reasons for doing so.
The bill’s passing was immediately condemned by civil liberties groups, which warned that it could be used to go after pro-Palestinian groups in the US as well as any groups working to facilitate aid into Gaza, where Israeli forces have been overseeing a devastating war that has killed tens of thousands of Palestinians since October 2023, when the war on Gaza broke out after the Hamas-led attacks on southern Israel.
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“By voting for HR 9495 today, the House of Representatives chose fear over freedom,” Kia Hamadanchy, senior federal policy counsel at the American Civil Liberties Union, said in a statement shared with Middle East Eye.
“After over 100 years of defending civil liberties in this country, we know that the American people won’t sit quietly as politicians try to ram through anti-democratic legislation like this one.”
The bill now heads to the Senate, where it could fail to pass with the Democrats enjoying a slim majority in the upper chamber. However, if it does fail, the bill could return in 2025 under Donald Trump’s Republican presidency, coupled with a Republican majority in the House and Senate.
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A coalition of more than 300 civil liberties groups has signed a letter urging lawmakers against passing the bill, which they say would “grant the executive branch extraordinary power to investigate, harass, and effectively dismantle any nonprofit organization – including news outlets, universities, and civil liberties organizations like ours”.
While the measure originally had wide bipartisan support before Trump’s re-election, much of the fear over its passage in recent weeks has centred around what powers it would give the future Trump administration to pursue any organisation it wants.
The bill’s original version passed the House in April by a vote of 382-11.
However, the measure’s core focus has been the movement building and organising around the issue of Palestinian rights.
Republican Congressman David Kustoff, a co-sponsor of the bill, explicitly said the bill was aimed at “dismantling the financial networks of terrorist organizations, including Hamas”.
After the Hamas-led attacks on southern Israel and Israel’s response with a full-fledged war on Gaza that has killed more than 43,000 Palestinians, many US lawmakers have painted individuals and groups protesting against Israel’s war as supporting Hamas, a US-designated terrorist group.
“Tax-exempt charities operating in the United States are providing support, encouragement, and potential financing to Hamas and Hamas-affiliated groups,” Republican Congressman Jason Smith said during a congressional hearing in November 2023.
Trump and his nominees for key cabinet positions have also repeatedly equated pro-Palestine protesters with sympathising or supporting terrorism.
Trump’s pick for director of national intelligence, Tulsi Gabbard, has accused the hundreds of thousands of pro-Palestinian protesters in the US as being puppets of a “radical Islamist organisation”, in an apparent reference to Hamas.
