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A ticking time bomb for US foreign assistance

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Late last year, Congress passed — and President Trump signed into law — legislation that has the potential to cripple the United States’ ability to use foreign assistance to advance its foreign policy interests. Only it’s not clear either understands what it is they’ve done.

That legislation, the Anti-Terrorism Clarification Act (ATCA), is designed to help Americans who are suing the Palestinian Authority and Palestine Liberation Organization (PLO) for allegedly facilitating overseas terrorist attacks in which they were injured.

{mosads}Federal courts dismissed these lawsuits for lack of personal jurisdiction, on the grounds that the attacks themselves had no nexus to the United States and that, under recent Supreme Court precedent, neither organization has sufficient ties to the United States to be considered “at home” and thus generally subject to lawsuits there.

The Anti-Terrorism Clarification Act provides a novel fix for this problem: Beginning on Feb. 1, any entity that accepts U.S. foreign assistance funds relating to law enforcement, non-proliferation, or economic stabilization — a substantial portion of overall U.S. foreign assistance — will be “deemed to have consented” to the jurisdiction of U.S. federal courts for any claims under the Anti-Terrorism Act (ATA), the cause of action used in each of the dismissed lawsuits. The Palestinian Authority and Palestine Liberation Organization have no doubt received such assistance in recent years. But so have countless other non-governmental organizations who are important U.S. foreign assistance partners — and therein lies the danger.

The ATA allows U.S. victims of terrorism to sue people and organizations that provided material support to the perpetrators of the terrorist attack in which the plaintiffs were injured. This is intended to provide the victims of terrorism with compensation and to discourage such support in the future. Yet, the definition of what constitutes material support is extraordinarily broad, raising the risk that even relatively benign conduct will fall within its ambit.

How broad is it? In the criminal context, the Supreme Court has upheld definitions of material support that extend to certain political advocacy and educational programs. In civil proceedings, plaintiffs have sued financial institutions under the ATA for providing alleged terrorist associates with various banking and financial services.

Similarly, they have pursued claims against companies like Facebook, Google and Twitter for providing communications and social media services. In one ongoing case, plaintiffs are suing several major pharmaceutical companies for doing business with the Iraqi Ministry of Health on the grounds that the ministry was corrupt and using the proceeds to support terrorist activities. And in a recent non-ATA case, plaintiffs went so far as to suggest that providing bottled water and cookies should qualify as material support where they were provided at an event attended by a terrorist associate.

Some of these claims may have merit. For others, the courts are likely to view the defendants’ actions as too innocuous in intent or unrelated to the plaintiffs’ injuries to result in liability. Either way, the related litigation has the potential to be immensely expensive. And the ATA’s triple damages provision all but guarantees that, however slim the odds of losing may seem, the resulting financial liability will be crippling.

These factors are likely to make ATA exposure a major concern for many U.S. foreign assistance partners. While recipients of U.S. foreign assistance are required to have procedures in place to ensure that they do not provide support to terrorist organizations, these are not foolproof.

Given the breadth of activities that may constitute material support, many foreign assistance partners may reasonably fear that their work will make them vulnerable to ATA claims. This is especially true for those foreign assistance partner who are most directly affected by the ATCA: small, local organizations without substantial ties to the United States who are likely to be in the worst position to defend themselves before U.S. courts.

One need only look to the Palestinian Authority and Palestine Liberation Organization to see how organizations in this position are likely to respond. Since the ATCA’s passage, Palestinian officials — who are facing at least one outstanding ATA judgment for more than $600 million in damages — have opted to forego any U.S. foreign assistance whatsoever for fear of being exposed to ATA liability.

The most high-profile casualty of this decision is a U.S.-backed program that facilitates Israeli-Palestinian security cooperation — one that the Trump administration is now reportedly trying to save through a legislative fix, as it is widely seen as a substantial contributor to stability in the West Bank (including by the Israeli government). But this is just the tip of the iceberg.

As they become more aware of the ATCA and its consequences, many other foreign assistance partners are likely to follow suit and simply refuse to accept relevant U.S. foreign assistance funds. Those that do not will still have to incorporate the added financial risks of ATA exposure into their project costs. As a result, the United States is likely to find it much harder to recruit local partners to implement the foreign assistance programs it would like to run. And where it can still do so, the funds that the United States provides will not go as far as they once did.

The hardest hit programs are likely to be those in conflict zones and other areas of instability, where foreign assistance partners sometimes find that contact with terrorist organizations and their associates is practically unavoidable. Yet, these are often the areas where the United States is most badly in need of effective local partners, and where the programs that the United States supports — many of which focus on conflict resolution, counter-terrorism and promoting the rule of law — have the most direct benefit to U.S. national security. The ironic result may be that the ATCA, a law adopted out of understandable sympathy with U.S. victims of terrorism, ultimately contributes to conditions that make acts of terrorism more likely.

To avoid these consequences, some foreign assistance partners may try to challenge the ATCA in U.S. courts — especially as organizations that do not stop accepting U.S. foreign assistance by Feb. 1 will find themselves subject to the ATCA’s terms for a period of at least five years. And the prospects for such a legal challenge are not bad, as there are serious reasons to doubt whether the ATCA is consistent with constitutional due process requirements. That said, such litigation could take years to resolve. In the meantime, U.S. foreign assistance policies — and the important values and interests they serve — will suffer.

{mossecondads}For this reason, the only practical solution is for Congress to pursue a legislative fix. This could mean revoking the relevant provisions of the ATCA all together or authorizing the president to waive its effects where consistent with U.S. national security interests. Or case-by-case exceptions could be built into foreign assistance appropriations. At a minimum, Congress should delay the ATCA’s implementation so that the federal government can fully evaluate its consequences and respond accordingly.

Now that the paralysis surrounding the recent government shutdown has at least temporarily passed, Congress must act quickly — preferably before its Feb. 1 implementation, as any litigation filed after that date could complicate future legislative changes. Every day that goes by without this fix brings the United States one step closer to a world where it can no longer make effective use of one of its most important foreign policy tools. And the clock is ticking.

Scott R. Anderson is the David M. Rubenstein fellow in governance studies at the Brookings Institution and senior editor of Lawfare, an online publication that focuses on hard national security choices. He previously served as an attorney-adviser with the U.S. Department of State and as the legal advisor for the U.S. Embassy in Baghdad, Iraq.

Tags Donald Trump Foreign policy Middle East Scott R. Anderson Terrorism

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