Tuesday, January 25, 2022

Terrorist Funding by Nonprofits (WSJ)

    The concern over nonprofit funds being used for terrorist activity is a valid and pressing one.  In examining whether the United States should allow a charitable deduction for donations to non-U.S. charities, I had to address this crucial issue.  Ultimately, I devoted a separate article to the topic, which provided a comprehensive analysis of how the Financial Action Task Force (FATF) could prevent terrorist funding in the event donations to non-U.S. charities were allowed.   

    A recent article in the Wall Street Journal about convicted Boston Marathon Bomber Dzhokhar Tsarnaev also raises a similar issue.  Federal prosecutors are requesting that a U.S. District Court judge allow them to collect funds held in his inmate trust fund account owed in criminal restitution.  As of the filing earlier this month, Tsarnaev had paid $2,202 of the $101.1 million owed in criminal restitution and other court fees and has been spending the money in other ways.  The prosecutors said “he has received tens of thousands of dollars.”  Surprisingly, one source of funds for Tsarnaev was the nonprofit Federal Defenders of New York.  When approached for comment, the nonprofit declined to comment.  It will be interesting to see what details emerge from the nonprofit and what steps will be taken to avoid this result.


Khrista McCarden

Hoffman Fuller Associate Professor of Tax Law

Tulane Law School


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