Did the Obama Administration Approve the Transfer of Money to a Listed Terrorism Funder?

An investigation into U.S. international aid practises in 2015 hit the headlines in July 2018.

  • Published 1 August 2018
  • Updated 2 August 2018
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Claim

The Obama administration approved the transfer of funding to the Islamic Relief Agency, a Sudan-based organization with ties to Al-Qaeda.

Rating

What's True

In May 2015, the Treasury Department's Office of Foreign Assets Control licensed World Vision International, a Christian NGO, to pay the $125,000 it owed to the Islamic Relief Agency. The same Treasury office had, a few months earlier, confirmed that the Islamic Relief Agency was on a Treasury list of suspected terrorist funders.

Origin

In July 2018, an investigation by the conservative Middle East Forum think tank hit the headlines, after it appeared to reveal that an office within the U.S. Treasury Department had in 2015 signed off on the transfer of $125,000 to the Islamic Relief Agency, a Sudan-based group listed as a funder of terrorism by the Treasury itself.

The 25 July Middle East Forum (MEF) report, which was accompanied by an article in the conservative National Review, reported:

The Middle East Forum has discovered that the Obama administration approved a grant of $200,000 of taxpayer money to an al-Qaeda affiliate in Sudan — a decade after the U.S. Treasury designated it as a terrorist-financing organization. More stunningly, government officials specifically authorized the release of at least $115,000 of this grant even after learning that it was a designated terror organization.

The report gave rise to coverage by the right-wing Daily Wire web site, which attributed the funding decision to former president Barack Obama personally in a headline reading “Obama Knowingly Funded Designated Al-Qaeda Affiliate,” as well as by Fox News, which reported:

The Obama administration approved a $200,000 grant to a group in Sudan with ties to Al Qaeda even though it had been designated a terrorist-financing organization by the U.S. years earlier, a conservative think tank revealed. Further, an agency official acknowledged the prior administration allowed taxpayer money to flow to the group even after its designation was discovered.

The facts and sequence of events presented by the MEF are broadly accurate and were largely confirmed to us by an official from the international charity World Vision, which acted in partnership with the Islamic Relief Agency (ISRA) in Sudan until 2015.

However, contrary to the Daily Wire’s headline, we found no evidence that former president Barack Obama himself had any role in either of the two funding decisions related to ISRA which are at the heart of the MEF’s report. 

Background

In 2004, the U.S. Treasury Department added the Islamic Relief Agency and several individuals associated with it to a list of organizations and individuals suspected of funding terrorism, blocking its assets and bank accounts in the United States and making it a criminal offense for anyone in the United States to support or conduct financial transactions with ISRA.

In announcing their decision, the Treasury Department cited evidence that ISRA (and its officials) had links to Osama bin Laden, Al-Qaeda, the Taliban, and others within global Islamic terrorist networks.

Apart from its inclusion on the U.S. government’s list of terrorism funders, ISRA performed charitable works in parts of the Muslim world — including Sudan, where they partnered with the U.S.-based evangelical Christian non-profit organization World Vision, which in turn received funding and support from the U.S. government, largely through the U.S. Agency for International Development (USAID).

Sequence of Events

In March 2014, USAID signed off on a $723,405 grant to World Vision, with ISRA designated to receive a $200,000 sub-grant from that amount. A World Vision official closely involved in the matter told us that, before listing ISRA as a sub-grantee, the organization had searched the Treasury’s “Sanctions List” for any group operating in Sudan with “Islamic Relief” in their name but turned up no matches, indicating ISRA was not blocked. A USAID official told us that the $200,000 set aside for ISRA was to go towards humanitarian aid to people displaced by the ongoing conflict in Sudan at that time.

In November 2014, according to the World Vision official with whom we spoke, the organization was alerted to the possibility that ISRA might be on the Treasury’s list of blocked groups and conveyed those concerns to the Treasury Department’s Office of Foreign Assets Control (OFAC), which is responsible for implementing and tracking economic sanctions. 

The official told us that World Vision then voluntarily stopped working with ISRA while OFAC investigated ISRA’s status. This contradicted the account of a USAID official, who told us that USAID had instructed World Vision to put a hold on all their activities with ISRA.

The World Vision official broadly confirmed MEF’s claims, which were based on emails released under the Freedom of Information Act, that World Vision was eager for OFAC to quickly clarify the status of ISRA, telling us that the organization was frustrated by the delay in what should have been a straightforward verification of records.

In January 2015, OFAC finally confirmed that the Sudan-based Islamic Relief Agency to which USAID had granted $200,000 was indeed on the U.S. Treasury’s sanctions list. This meant World Vision (like any other U.S.-based entity or person) could not provide ISRA any support or engage in any financial transactions with that group.

However, World Vision still owed ISRA money for services ISRA had already provided in Sudan, on the basis of the $200,000 sub-grant awarded by USAID the previous March. But OFAC’s January 2015 ruling meant that ISRA could not be reimbursed for that work, so World Vision applied to OFAC for a license to meet those contractual obligations.

The World Vision official told us that the indefinite halt to their work with ISRA had put a severe strain on World Vision’s relationship with the Sudanese government. World Vision staff in Sudan had been experiencing harassment related to their debts to ISRA, the official said, and they felt they were at real risk of being kicked out of the country altogether — which would have spelled the end of their humanitarian work there. Paying their remaining debts to ISRA felt like the cost and condition of World Vision’s being allowed to continue working in Sudan, the official told us.

In the end, OFAC accepted World Vision’s application and granted them a license for a one-off transfer of $125,000 to ISRA, which a USAID official told us was for humanitarian assistance work that ISRA had already performed.

A World Vision spokesperson told us that the $125,000 transferred to ISRA came from “USAID funds,” confirming both the Middle East Forum and Fox News’ description of it as “taxpayer money.” In a statement, the spokesperson wrote:

World Vision received reimbursement of $125,000 from USAID of funds paid to ISRA for expenses they incurred and reported under that sub-grant.

Conclusion

The Middle East Forum is correct in their central claim that an office of the Treasury Department, which had confirmed ISRA was listed as a sanctioned entity, subsequently permitted a private NGO (World Vision) to transfer funds to ISRA.

Insofar as every office and agency of every federal government department between 2009 and 2016 was a part of the “Obama administration,” it can justifiably be said that this decision was made by the Obama administration. However, we saw no evidence that the decision was made by anyone beyond OFAC, least of all by President Obama himself.

We asked the Treasury Department which official directed the license to be given to World Vision for the May 2015 transfer, but an official told us OFAC does not discuss or comment on individual cases. We also contacted John Smith, who was OFAC’s director during the period outlined by the Middle East Forum, but did not receive a response in time for publication.