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Proposed Changes to USA Patriot Act and Implications for Grantmakers (July 13, 2005)

The Patriot Act is up for reauthorization or revision and certain provisions of a recent draft would affect grantmakers. While we emphasize that the bill is in a very preliminary stage of its journey through Congress, and while Senator Kennedy who sits on the Judiciary Committee is likely to be a voice of reason on the bill, we wanted you to be aware of this legislative development.

Note to AGM Members and Partners: The following information was developed by our peer organization NYRAG (The New York Regional Association of Grantmakers). We thank them for sharing this information.

Since the September 11th terrorist attacks, foundations and corporations, particularly those funding internationally, have had to engage in additional due diligence with regard to their grantmaking. In accordance with Executive Order 13224, the USA Patriot Act and other related laws, including voluntary guidelines issued by the Treasury Department, grantmakers regularly check the names of their prospective grantees against various watch lists produced by the government, and document their compliance to protect themselves from possible criminal and civil prosecution.

CHANGES AHEAD?

Provisions of the Patriot Act are currently under consideration for reauthorization or revision in Congress. The bill that would reauthorize as well as expand the government’s investigatory powers is called the Patriot Reauthorization Act (PAREA). This bill passed through the Senate Intelligence Committee on June 7th by a vote of 11 to 4 and now moves on for consideration by the Senate Judiciary Committee.

If certain measures of the Patriot Act are reauthorized and revised before they expire at the end of 2005, the FBI will be granted more expansive investigative powers. This development could have important consequences for the work of grantmakers.

Although not targeted specifically at grantmakers, two provisions under consideration are particularly relevant:

  • Section 215 of the Patriot Act currently (and if reauthorized) allows the FBI, with permission from a judge, to request any tangible item from a person or organization as long as that item is relevant to an authorized investigation. If the FBI believes that a grantmaker has materials on an organization that are pertinent to a federal investigation, the donor institution would be forced to turn over its documentation. These documents could run the gamut from confidential internal files to information about grantees.
  • With the addition of “administrative subpoena” power in a proposed Section 213 of PAREA, the FBI itself would be allowed to issue subpoenas. This power would permit the FBI to act more quickly in its investigation of terrorist activities. Used in conjunction with Section 215, administrative subpoenas will allow the FBI to obtain any records it deems relevant to its investigations, which means that any grantmaking organization could be forced to turn over sensitive and confidential information. Privacy advocates believe that giving this additional power to the FBI is unnecessary and dangerous. Aside from the issues of privacy and confidentiality, compliance could be arduous for grantmakers of all sizes.

ARGUMENTS, OPINIONS, AND RESOURCES

Below are resources to help grantmakers inform themselves about these issues.
Privacy advocates have made several arguments against PAREA, two of which are available below:

There are also those calling for the passage of PAREA and the granting of wider subpoena powers to the FBI. Here are examples of this viewpoint:

You may also visit the Senate Intelligence Committee website for testimony regarding the Patriot Act at http://intelligence.senate.gov/hr109.aspx. Or, visit the ACLU website for their FAQ on Section 215 at http://www.aclu.org/Privacy/Privacy.cfm?ID=11054&c=130 or their collection of resources on the Patriot Act at http://www.aclu.org/SafeandFree/SafeandFree.cfm?ID=12126&c=207.

For further information about compliance with anti-terrorism measures, see the Council on Foundations’ Handbook on Counter-Terrorism Measures: What U.S. Nonprofits and Grantmakers Need to Know, available at http://www.cof.org/files/Documents/Publications/2004/CounterTerrorismHandbook.pdf, and Principles of International Charity, available at http://www.cof.org/files/Documents/International_Programs/2005Publications/Principles_Final.pdf