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Al-Aqeel v. Paulson

August 4, 2008


The opinion of the court was delivered by: Gladys Kessler United States District Judge


Plaintiff Aqeel Al-Aqeel,*fn2 a citizen and resident of Saudi Arabia, brings this action challenging his designation as a "Specially Designated Global Terrorist" ("SDGT") by the Department of the Treasury's Office of Foreign Assets Control ("OFAC") pursuant to the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701 et seq. and Executive Order No. 13,224. The Amended Complaint names as Defendants Secretary of the Treasury Henry M. Paulson, Jr., Secretary of State Condoleezza Rice, Attorney General Michael B. Mukasey, and Assistant Secretary of the Treasury for Terrorist Financing Patrick O'Brien (hereinafter collectively "the Government"). This matter is before the Court on the Government's Motion to Dismiss the Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6) [Dkt. No. 29] and Plaintiff's Motion for Summary Judgment [Dkt. No. 36]. Upon consideration of the Motions, Oppositions, Replies, and the entire record herein, and for the reasons set forth below, the Government's Motion to Dismiss is granted and Plaintiff's Motion for Summary Judgment is denied as moot.


The International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. § 1701 et seq., "authorizes the President to declare a national emergency when an extraordinary threat to the United States arises that originates in substantial part in a foreign state." Holy Land Found. v. Ashcroft, 333 F.3d 156, 159 (D.C. Cir. 2003). Once the President has made such a declaration, he may investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.

50 U.S.C. § 1702(a)(1)(B).

Following the September 11, 2001 terrorist attacks, President Bush issued Executive Order No. 13,224. The President determined that the attacks constituted "an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States." Exec. Order No. 13,224, 66 Fed. Reg. 49079 (Sept. 23, 2001). Therefore, pursuant to his authority under IEEPA, the President blocked the assets of twenty-seven foreign terrorists and terrorist organizations. Id., Annex.

The Order also authorized the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General, to designate persons who are owned or controlled by, or act on behalf of, the foreign terrorists and terrorist organizations specifically named in the Order. Id. § 1(c). Persons who "assist in, sponsor, or provide financial, material, or technological support for, or financial or other services to or in support of, such acts of terrorism or those persons listed in the Annex" may also be designated. Id. § 1(d)(i). Further, the President found that

For those persons listed in the Annex to this order or determined to be subject to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render these measures ineffectual.

Id. § 10.

On June 2, 2004, pursuant to this authority, the Office of Foreign Assets Control designated Plaintiff a Specially Designated Global Terrorist. OFAC did not provide Plaintiff with advance notice of his designation. Instead, he was made aware of his designation by a Department of the Treasury press release posted on the Internet. Am. Compl. ¶ 20; OFAC List of Specially Designated Nationals and Blocked Persons, available at offices/enforcement/ofac/sdn/.

Plaintiff is the former Chairman of Al-Haramain Islamic Foundation ("AHF") an Islamic charity based in Saudi Arabia. At various times, OFAC has designated various national branches of the AHF, including the branch located in the United States, as SDGTs. The AHF branch in the United States, the Al Haramain International Foundation, Inc. ("AHIF") is an Oregon corporation. According to documents filed with the Internal Revenue Service, Plaintiff was listed as the President of AHIF, which owned real property in Oregon and Missouri and maintained an Oregon bank account. Indeed, Plaintiff assisted in the acquisition of the Missouri property. Furthermore, Plaintiff traveled to both Oregon and Missouri on behalf of AHIF.

According to an indictment handed down by a federal grand jury in Oregon in 2005, AHIF functioned as an instrumentality of the global AHF organization. Indictment, United States v. Al-Haramain Islamic Found., Inc., No. CR 05-60008 (D. Or.). "[AHIF] was funded by its parent organization [AHF] through its headquarters in Riyadh, Saudi Arabia, which exercised decision making authority over financial transactions conducted by the United States office." Id. at ¶ B. vii.

The Treasury Department press release announcing Plaintiff's designation as an SDGT provides further information regarding the relationship between him and AHF. According to the press release, "Al-Aqil [sic] has been identified as AHF's Chairman, Director General and President in a variety of sources and reports." Office of Public Affairs Press Release "Additional Al-Haramain Branches, Former Leader Designated by Treasury as Al Qaida Supporters," June 2, 2004, available at js1703.htm. The Treasury Department further stated that "[a]s AHF's founder and leader, Al-Aqil [sic] controlled AHF and was responsible for all AHF activities, including its support for terrorism." Id.

On May 11, 2005, Plaintiff filed his original Complaint, which alleged that OFAC's designation of Plaintiff as an SDGT violated his procedural and substantive due process rights under the Administrative Procedure Act, 5 U.S.C. § 551(a) et seq. ("APA"), and his Fourth Amendment rights. The Government filed a Motion to Dismiss and Plaintiff filed a Motion for Summary Judgment.*fn4

Starting in August 2005, the parties entered into settlement negotiations in an attempt to resolve the case. As part of those discussions, the Government provided Plaintiff with a copy of the unclassified and non-privileged portions of the Administrative Record developed by OFAC during the designation process. (By providing these portions of the Administrative Record, the Government does not concede that Plaintiff was otherwise legally entitled to them). The parties were ultimately unable to resolve the case.

Accordingly, the Court set a briefing schedule and Plaintiff filed a Motion for Leave to Amend the Complaint. In his Motion, Plaintiff conceded that much of the original Complaint was now moot, "due to the government's willingness to provide a large portion of the administrative record." Id. at 3. The only remaining issue between the parties, according to Plaintiff, was whether he was entitled to portions of the Administrative Record that were withheld by the Government because they contained privileged or law enforcement sensitive ("LES") material. Id. For that reason, Plaintiff sought leave to amend his Complaint to make this claim, which the Court granted.*fn5 Nevertheless, Plaintiff has subsequently argued that "[t]he issue in this case is [the broader issue of] whether the government is required to provide notice and a meaningful hearing, even in written form, at anytime, even after the designation." Pl.'s Opp'n to Mot. to Dismiss at ...

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