Democrats Flip to Protect Radical Non-Profits

If you listened to the hysteria from the floor of the House of Representatives on November 21, 2024, you might believe that the bill HR 9495 entitled “Stop Terror-Financing and Tax Penalties on American Hostages Act,” is a radical bill designed to give President-elect Trump unchecked powers to label all of his political enemies terrorists.   The reality is that the same legislation designed to target non-profits who support terrorism passed the House with bi-partisan support in April of 2024.

Last spring, neither Democrats nor non-profits were concerned with the strength of due process assurances built into the bill (179 Dems voted for the bill).  Then, Donald Trump was elected.  A bill selectively tailored to address the issue of foreign terrorist influence in American non-profits suddenly became known as the “non-profit killer” bill (only 15 Dems voted for the bill). (READ MORE: Pete Hegseth v. ‘Sam Hanna’ and the Left’s War Against the Jews)

The number of Democrats that flipped their vote on HR 9495 and the sudden panic by the non-profit sector shows the firm grip that extremist groups have on the Democratic party and a large swath of the civil society sector.  The non-profits likely to be investigated under the legislation — those actively cooperating with designated foreign terrorist organizations — conducted an aggressive lobbying campaign, convincing advocacy groups and Democratic Congresspersons that the bill was dangerous and should be defeated.

HR 9495 does not limit free speech. It does not give the Treasury Secretary the power to unilaterally declare any American non-profit a “terrorist organization.”  What it does attempt to do is something that should be quite uncontroversial.  HR 9495 affirms that groups that are presently coordinating with, financially supporting, or giving expert advice to terrorists should not also benefit from tax exempt status.

During this week’s floor debate, Representative Jayapal, who had voted for the bill in April, proclaimed that HR 9495, “would give Donald Trump unfettered power to punish civil society groups, news outlets, hospitals, and universities with zero due process.”  In the days leading up to the House vote, the ACLU led a coalition of over 180 non-profits to oppose the bill claiming it left an accused non-profit without “meaningful opportunity to defend itself.”

Yet, the actual text of the legislation gives organizations 90 days to respond to any accusation of terrorism affiliation.  An independent administrative appeals process is built into the bill, along with the right to seek review in Federal District Court.

The five alarm fire on Capitol Hill proclaimed the legislation would be used to target groups ranging from the National Organization for Women, Green Peace, and the NAACP.  But, the text of HR 9495 only gives the Treasury Secretary the authority to investigate non-profits supporting terrorism within the meaning of 18 USC 2339B.  That section of the U.S. code makes it illegal to support an organization that has been designated a foreign terrorist organization by the Secretary of State.

There is nothing in HR 9495 or supporting code that empowers the Treasury Secretary to question the tax exempt status of domestic non-profits who are not coordinating with a U.S. designated foreign terrorist organization.  Furthermore, the Secretary of State only has the authority under the Immigration and Nationality Act to label foreign entities, not domestic entities, as terrorist organizations.

Section 501(c)p of the U.S. code already gives the IRS the power to take away the tax benefits of non-profits associated with terrorism.  HR 9495 ironically provides more due process and more layers of appeal.  The existing code highlights the irrationality of the opposition to the bill.

Why the Shift on HR 9495?

How did HR 9495 penned to stop the coordination of Hamas with student groups taking over University campuses come to be seen as authoritarian overreach?  How did a bill meant to address terrorist coordination in American city halls and on U.S. school boards come to be seen as “the death spiral for non profits?”  The answer lies in the political power of the very non-profits that HR 9495 was drafted to address.

American Muslims for Palestine (AMP), Students for Justice in Palestine (SJP), Jewish Voice for Peace (JVP), and the Council on American-Islamic Relations (CAIR) — all linked to extremist ideologies or terrorism — have fiercely lobbied against HR 9495.  SJP called HR 9495 a threat to free speech, while JVP labeled it part of the “MAGA assault on democracy and freedom.” (READ MORE: The UN’s Failure in Lebanon)

CAIR, which has been linked to Hamas for over 30 years, claimed the legislation “gave the President fascist powers.” These are groups that celebrated the atrocities of October 7th and glorified Hamas and Hezbollah.  These organizations would be the first ones to legitimately be investigated under HR 9495.

Using due process to investigate the tax-exempt status of non-profits linked to terrorism should be a bipartisan no-brainer.  It is troubling that segments of the Democratic Party and advocacy groups have been swayed by entities actively undermining American democracy and U.S. foreign policy.

Executive power must have limits; but HR 9495 is not an authoritarian power grab. Rather, it is a necessary measure to counter the influence of terror-aligned organizations infiltrating American civil society to advance their own destructive agendas.

Julie Marzouk is an attorney, author, and board member of Intelligent Advocacy Network.

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