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In April 2024, the House of Representatives passed HR 6408, legislation that would grant the Secretary of Treasury authority to suspend the tax-exempt status of any nonprofit organization deemed to be a “terrorist supporting organization.”
“Although the label is supposed to apply to supporters of designated terrorist groups, nothing in the law prevents the Department of the Treasury from shutting down any 501(c)(3) nonprofit,” Matthew Petti reported for Reason magazine. The power to revoke nonprofit news organizations’ tax-exempt status would allow government officials “to retaliate against journalists they don’t like” and “chill reporting, not only on Israel but also on U.S. foreign policy generally,” Seth Stern of the Freedom of the Press Foundation wrote in a report published by The Intercept.
It is already illegal for any person or organization to fund terrorist groups, but this legislation would make it easier for the government to punish nonprofits without due process, Andy Lee Roth of Project Censored reported for Truthout. The Charity & Security Network, an advocacy group for nonprofit organizations that work in conflict zones, warned that, without proper evidence, allegations targeting nonprofit groups constituted “a dangerous precedent for not only the U.S. legal system and the state of free speech but also for charitable giving and operations in crisis contexts like Gaza.”
The House passed HR 6048 in the wake of federal and state officials calling for measures to treat US-based pro-Palestinian groups as terrorist organizations. For example, Jason Miyares, Virginia’s Republican attorney general, called for an investigation of American Muslims for Palestine, and the Anti-Defamation League and the Louis D. Brandeis Center for Human Rights Under Law sent a letter to almost 200 university presidents requesting that all chapters of Students for Justice in Palestine be investigated for providing material support to foreign terrorist organizations.
Nonprofit news organizations could also be targeted under the legislation. As Stern reported in The Intercept, “In recent months, dozens of lawmakers and public officials have, without evidence, insinuated that U.S. news outlets provide material support for Hamas.” HonestReporting, a pro-Israel media watch group, falsely accused journalists who photographed the October 7 massacre of having prior knowledge of the attack, and the group also suggested that the New York Times, Reuters, CNN, and the Associated Press, which published some of those photographs, were implicated. This accusation spurred further calls for the investigation of journalists by elected officials, Stern reported. Tom Cotton, the far-right senator from Arkansas, repeated HonestReporting’s disinformation, demanding the Department of Justice open a national security investigation into the four news outlets. More than a dozen state attorneys general wrote in an open letter that “floated the theory that the outlets’ reporting could itself evidence support for Hamas,” Stern reported.
“Nonprofit news outlets are already struggling even without government harassment,” Stern wrote, “but revocation of their tax-exempt status would be a death knell for outlets doing the kind of in-depth investigative journalism that is hardly ever profitable these days.”
Despite the fundamental concerns raised by the proposed legislation, it has received nearly no corporate news coverage, with mentions limited to opinion articles. In May 2024, the New York Times published an opinion piece on Republican leaders targeting “advocacy groups, think tanks, humanitarian organizations and philanthropies,” which briefly described the House legislation. A March 2024 piece published by the Wall Street Journal—titled “A Tax Exemption for Supporting Hamas?”—focused on a lawsuit targeting UNRWA USA, a 501c3 nonprofit organization, but made no mention of the congressional efforts to target US-based nonprofits.
Sources:
Seth Stern, “Criticizing Israel? Nonprofit Media Could Lose Tax-Exempt Status without Due Process,” The Intercept, May 10, 2024.
Andy Lee Roth, “Pro-Israel Legislators Have Concocted a Dangerous Ruse to Shut down Nonprofits,” Truthout, May 3, 2024.
Yves Smith, “Free Speech on the Ropes: Legislation to Revoke Not-for-Profit Status of Organizations That Support Palestine Protests Passes in House,” Naked Capitalism, April 26, 2024.
Matthew Petti, “This Bill Would Give the Treasury Nearly Unlimited Power to Destroy Nonprofits,” Reason, April 24, 2024.
Student Researcher: Cam Lippincott (UC Berkeley)
Faculty Evaluator: Andy Lee Roth (Project Censored)
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