Holder's Dilemma: Will Justice Have to Pay Money to a Terrorist Organization?

Of all the tricky decisions Attorney General Eric Holder is facing right now, here's one that has lawyers at the Justice Department really scratching their heads. All things being equal, they would love nothing more than to let stand a federal judge's recent decision that President Bush's warrantless-wiretapping program was illegal, thereby avoiding further legal skirmishes over one of the Bush administration's most divisive legacies. But unless they appeal last month's landmark decision by Judge Vaughan Walker, the U.S. government may be forced to pay damages into the bank account of one of the plaintiffs in the case: an Islamic charity that has been formally declared a global terrorist organization.

Can the Justice Department pay money to a terrorist organization? And if it did, would it be committing the federal crime of providing "material support" to terrorists? "They've got a dilemma," says Jon Eisenberg, lawyer for the Al Haramain Islamic Foundation, a now defunct charity that sued the U.S. government more than four years ago, alleging that its rights were violated by the Bush wiretapping program. Nevertheless, Eisenberg adds, "in this country, if you violate the law you have to pay damages."

The stark nature of the choice was underscored late Friday night when Eisenberg and other lawyers in the case filed a motion, at Judge Walker's request, proposing a final judgment in the case now known as Al-Haramain Islamic Foundation v. Obama. Walker had asked for the filing in light of his March 31 finding that, as a result of the Bush wiretapping program, Al Haramain and two of its lawyers were subjected to "unlawful warrantless electronic surveillance" for 204 days between Feb. 19 and Sept. 9, 2004.

The plaintiffs' proposed order: the feds should pay a total of $610,000, or $203,400 per plaintiff. (The plaintiffs reached this figure using the maximum allowable damages of $100 a day for violations under the Foreign Intelligence Surveillance Act. That comes to a total of $20,400 per plaintiff. Then, using a standard multiplier for civil lawsuits, they added punitive damages of nine times that amount, or $183,600 per plaintiff.) To be sure, even Eisenberg concedes the issue is largely "symbolic" since Al Haramain—a group once accused by the Treasury Department of aiding Al Qaeda—has long since shut its doors. Any damages that are paid will likely end up going to a frozen or inactive bank account, he adds. "No money will end up going into the hands of actual terrorists," he stresses. Click here to see the plaintiffs' proposed judgment.

But even a symbolic payment to a defunct organization's frozen bank account could be problematic, potentially undermining a linchpin of the U.S. government's antiterrorist efforts. Accepting Walker's ruling could also undercut the government's ongoing investigations of current or former U.S. officials suspected of talking about the secret surveillance program to reporters. Until now, Holder's Justice Department has vigorously defended the Bush-era program, asserting (much to the chagrin of liberals and civil-liberties advocates) that Al Haramain's case should be thrown out under the "state secrets" doctrine—an argument that Walker rejected.

A Justice Department told Declassified on Tuesday that lawyers are researching the legality of making a damage award to an accused terrorist organization. When Holder appeared before the Senate Judiciary Committee last week, Sen. Arlen Specter asked him how the department intends to respond to Walker's ruling. "We have really not decided what we're going to do," Holder said. Specter pressed the question. "What do you think?" he asked, and Holder laughed. "Well, I think I haven't made up my mind yet."