Post-September 11 Fortified Anti-Terrorism Measures Compel Heightened Due Diligence

Abstract:     
Due diligence has long been a prerequisite for smart charitable contributions and domestic and international grant-making. Until September 11, 2001, the role of due diligence largely was a function of good governance and business practices and of federal tax rules. Its importance has heightened since that day, and its purpose has expanded.

Motivated partially by the revelation of terrorists' and terrorist organizations' reprehensible use of domestic and foreign charities as conduits to finance their unlawful activities, after September 11 President George W. Bush announced his intent to mount a governmental financial war against terrorism. To enhance the government's ability to undertake the task, President George W. Bush and Congress strengthened the post-September 11 legal framework. New legislation expanded presidential powers and added, as well as amended, federal civil and criminal anti-terrorism laws.

The strengthened anti-terrorism statutes are aimed at individuals and entities, including domestic publicly-supported charities and private foundations, that financially or otherwise assist, support, or sponsor terrorists and terrorist organizations. To avoid accusations of transgression and their ruinous effects, heightened due diligence is an absolute necessity.

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