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GLOBAL RELIEF FOUNDATION INC. v. O'NEILL
June 11, 2002
GLOBAL RELIEF FOUNDATION, INC., PLAINTIFF,
PAUL H. O'NEILL, COLIN L. POWELL, JOHN ASHCROFT, R. RICHARD NEWCOMB, AND ROBERT S. MUELLER, III, DEFENDANTS.
The opinion of the court was delivered by: Wayne R. Anderson, Judge.
MEMORANDUM OPINION AND ORDER
This case is before the Court on the motion of plaintiff Global Relief
Foundation, Inc. for preliminary injunctive relief pursuant to Federal
Rule of Civil Procedure 65. For the following reasons, the motion is
Before addressing the motion for preliminary injunction filed by the
plaintiff; Global Relief Foundation ("Global Relief"), a brief description
of this case is in order.
Also on December 14, 2001, the Office of Foreign Asset Control ("OFAC")
of the United States Department of the Treasury issued a blocking order
freezing the financial assets of Global Relief pending the FBI's
investigation of what relationship, if any, Global Relief might have to
the terrorists behind the September 11, 2001 attacks on the World Trade
Center and the Pentagon. Global Relief contends that the order
temporarily "freezing" its assets was not authorized by statute,
executive order or the Constitution. The defendants maintain that this
blocking order was both lawful and constitutional. They cite the
International Emergency Economic Powers Act, as amended by the USA
Patriot Act, as the statutory basis for the authority to issue the
blocking order. This authority was granted first to the President and
then delegated by him to the Treasury pursuant to Executive Order Number
13224. Once again, this Court agrees with the defendants.
The assets seized for analysis and the funds blocked by OFAC's order
have been seized and blocked "pending investigation" of Global Relief and
others. Thus far, no agency of the United States government has declared
or requested any forfeiture of assets to the government. Nor have any
individuals or Global Relief been charged with any crimes. Hence, Global
Reliefs request for a preliminary injunction is directed only to the
release of funds and materials seized for investigative purposes while
the investigation itself is ongoing.
To justify its emergency search and, to some extent, the blocking
order, defendants have asked this Court to review materials, in camera
and ex parte, without revealing them to Global Relief or its attorneys.
In accordance with our order of April 5, 2002, we have reviewed materials
furnished by the FBI to us and have concluded that they are relevant to
the ongoing investigation and that their disclosure to Global Relief,
while the investigation is pending, could undermine this investigation
and others of national significance.
Global Relief began operating in 1992 as a domestic, non-profit
corporation chartered and headquartered in illinois. According to its
complaint, Global Relief claims to be a charitable organization that
funds humanitarian relief programs throughout the world. These programs
allegedly distribute food, fund schools for orphans, and provide medical
Global Relief characterizes itself as the largest U.S.-based Islamic
charitable organization "with respect to the geographic scope of its
relief programs." (Complaint ¶ 12.) As contributions to Global
Relief increased (in 1995, the organization reported accepting donations
totaling $431,155; by 2000, it reported nearly $3.7 million), it appears
to have expanded the reach of its efforts. In 1995, it reported funding
programs in Chechnya, Bosnia, Pakistan, Kashmir, and Lebanon. It reported
funding additional programs in Afghanistan and Azerbaijan in 1996,
Bangladesh in 1997, Iraq and Somalia in 1998, Albania, Belgium, China,
Eritrea, Kosovo, and Turkey in 1999, and, eventually, Ethiopia, Jordan,
Palestine, and Sierra Leone in 2000. Global Relief also has funded
programs in Gaza and the West Bank. (Complaint ¶ 11.) To assist with
the distribution of humanitarian aid abroad, Global Relief established
regional offices in Belgium, Azerbaijan, and Pakistan. Reportedly, such
offices received hundreds of thousands of dollars in contributions, in
addition to the amounts
reported by the headquarters in the United
States. Although Global Relief has funded relief programs in the United
States, over 90 percent of its donations have been sent abroad.
On September 11, 2001, terrorists attacked the United States.
Individuals hijacked four commercial airliners containing passengers and
crew and flew them deliberately into the two towers of the World Trade
Center in New York City as well as into the Pentagon near Washington,
D.C. The fourth plane was diverted from its path and crashed in rural
Pennsylvania. Over 3,000 people were murdered.
On September 24, 2001, President George W. Bush declared a national
emergency with respect to the "grave acts of terrorism and threats of
terrorism . . . and the continuing and immediate threat of further
attacks on United States nationals or the United States." Exec. Order
No. 13224, 66 Fed. Reg. 49074 (2001). The President determined that the
acts perpetrated on September 11 constituted "an unusual and
extraordinary threat to national security, foreign policy, and economy of
the United States." In light of the "pervasiveness and expansiveness of
the financial foundation of terrorists," the President cited the need for
financial sanctions against individuals or organizations that engage in
or support terrorism throughout the world.
On December 14, 2001, pursuant to the Foreign Intelligence Surveillance
Act, then-acting Deputy Attorney General Larry D. Thompson authorized the
search of Global Reliefs Bridgeview, Illinois office and the residence of
its executive director. The FBI's Chicago Division Joint Terrorism Task
Force conducted both searches. From the Global Relief office, the FBI
seized items including computers and servers, modems, a cellular phone,
hand-held radios, video and audio tapes, cassette tapes, computer
diskettes, a credit card imprinter, foreign currency, U.S. mail,
photographs, receipts, documents, and records. From the executive
director's residence, the FBI seized computers, computer diskettes, video
and audio tapes, cassette tapes, date books, a cellular telephone, a
camera, a palm pilot, credit cards, foreign currency, photographs,
documents, records, and $13,030 in U.S. currency. Since being seized, the
items removed from both the Global Relief office and the executive
director's residence have been secured in FBI custody for review and
Also, on December 14, 2001, pursuant to the International Emergency
Economic Powers Act and President Bush's Executive Order, OFAC issued a
"Blocking Notice and Requirement to Furnish Information" to Global
Relief, which "froze," until further notice, the funds, accounts, and
business records in which the organization had an interest. OFAC has
claimed that it acted on the basis of substantial classified and
unclassified information related to Global Reliefs possible connections
with terrorist organizations.
The blocking order advised Global Relief of the administrative
procedures available to it should it choose to contest OFAC's action,
including the right to challenge the blocking and to seek licenses to
resume operations in whole or in part. Although Global Relief applied for
and was granted licenses to access limited blocked funds to pay for legal
expenses, salaries, payroll taxes, health insurance, rent, and
utilities, it did not challenge the blocking order itself through
On January 28, 2002, Global Relief filed a petition for declaratory
judgment and injunctive relief and for a writ of mandamus with this
Court, naming Paul H. O'Neill, Colin L. Powell, John Asheroft, R. Richard
Newcomb, and Robert S. Mueller,
III, in their official capacities, as
defendants (collectively, the "defendants"). In its petition, Global
Relief requested that the defendants be ordered to "unfreeze" its assets
and return the items seized during the search of the organization's
office and the executive director's residence. In addition, on February
12, 2002, Global Relief filed a motion for preliminary injunction,
arguing that the blocking of its assets and records was both unlawful and
In its motion, Global Relief has requested a preliminary injunction
from this Court that would serve to enjoin the defendants from: 1)
blocking or otherwise controlling Global Reliefs property; 2) barring
Global Relief from doing business; 3) withholding Global Reliefs
records; 4) "smearing" its name; and 5) punishing Global Reliefs donors
for making donations to the corporation. (Global Relief Prelim.
Injunction Brief at 2.) In this circuit, to obtain a preliminary
injunction, Global Relief must show: 1) a reasonable likelihood of
success on the merits; 2) the existence of an irreparable harm without
the injunction; and 3) an inadequate remedy at law. Anderson v. U.S.F.
Logistics (IMC), Inc., 274 F.3d 470, 474-75 (7th Cir. 2001); Re/Max North
Central, Inc. v. Cook, 272 F.3d 424, 429 (7th Cir. 2001); Ty, Inc. v.
Jones Group, Inc., 237 F.3d 891, 895 (7th Cir. 2001). If Global Relief
satisfies this initial burden, then the Court must balance the
irreparable harm to the non-moving party if the injunction is granted
against the irreparable harm to the moving party if the injunction is
denied. See Graham v. Medical Mutual of Ohio, 130 F.3d 293, 295 (7th
Cir. 1997); Grossbaum v. Indianapolis-Marion County Bldg. Auth.,
100 F.3d 1287, 1291 (7th Cir. 1996), cert. denied, 520 U.S. 1230 (1997);
Publications Int'l, Ltd. v. Meredith Corp., 88 F.3d 473, 478 (7th Cir.
1996). The Court must also consider the public interest in denying or
granting the injunction. See Ty, Inc., 237 F.3d at 895.
In addition to these traditional preliminary injunction requirements,
Global Relief faces additional burdens. Because Global Relief is
requesting that this Court order the defendants to perform certain acts
(i.e. "unfreeze" its assets and return the collected documents), it is
essentially seeking a mandatory preliminary injunction. As the Seventh
Circuit has previously held, since a "mandatory injunction requires the
court to command the defendant to take a particular action, `mandatory
preliminary writs are ordinarily cautiously viewed and sparingly issued.'"
Graham, 130 F.3d at 295 (citing Jordan v. Wolke, 593 F.2d 772, 774 (7th
Cir. 1978). See also WA. Mack, Inc. v. General Motors Co., 260 F.2d 886,
890 (7th Cir. 1958) (finding that "mandatory injunctions are rarely
issued and interlocutory mandatory injunctions are even more rarely
issued, and neither except upon the clearest equitable grounds"). The
burden is on Global Relief to establish that this extraordinary relief is
Furthermore, by seeking injunctive relief against the decision to block
its assets pending a federal investigation, Global Relief is in essence
challenging the power of the Executive Branch of the United States
government to conduct foreign policy. In so doing, Global Relief is
asking this Court to approach the outer limit of its constitutional
authority. Chief Justice Rehnquist, writing for the Court in Regan v.
Wald, 468 U.S. 222, 242, 104 S.Ct. 3026 (1984), reh'g denied, 469 U.S. 912
(1984), quoted from Harisiades v. Shaughnessy, 342 U.S. 580, 589, 72
S.Ct. 512 (1952), which stated that "[m]atters related `to the
conduct of foreign relations . . . are so exclusively entrusted to the
political branches of government as to be largely immune from judicial
inquiry or interference.'" As a general principle, therefore, this Court
should avoid impairment of decisions made by the Congress or the President
in matters involving foreign affairs or national security. See Haig v.
Agee, 453 U.S. 280, 292, 101 S.Ct. 2766 (1981) ("Matters intimately
related to foreign policy and national security are rarely proper
subjects for judicial intervention"); Palestine Info. Office v. Shultz,
674 F. Supp. 910, 918 (D.D.C. 1987), aff'd, 853 F.2d 932 (1988) (same).
Accordingly, we conclude that, in order to succeed on its complaint for
injunctive relief, Global Relief must make an "exceptionally strong
showing on the relevant [preliminary injunction] factors." Palestine
Info. Office, 674 F. Supp. at 918 (citing Washington Metro. Area Transit
Auth. v. Holiday Tours, Inc., 559 F.2d 841, 956 (D.C. Cir. 1977))
(emphasis in original).
With these considerations in mind, we will now turn to the merits of
Global Reliefs motion for a preliminary injunction. At its core, Global
Reliefs motion raises two primary arguments. First, Global Relief
contends that the blocking of its assets and the "seizure" of its records
and documents pending an ongoing investigation by the FBI and OFAC were
acts outside the powers granted to those agencies by congressional
statutes. Second, Global Relief argues that both the blocking of its
assets and the search of the headquarters and the executive director's
home violated numerous constitutional principles. We will address each of
these arguments in turn.
I Likelihood of Success on the Merits
The threshold factor for a preliminary injunction is the likelihood of
success on the merits, see Rust Env't & Infrastructure v. Teunissen,
131 F.3d 1210, 1213 (7th Cir. 1997), so we will proceed to analyze Global
Reliefs claims to determine whether they are likely to succeed.
A. Global Relief Has Not Shown A Likelihood of Success On The Merits
of Its Statutory Arguments
I. The Foreign Intelligence Surveillance Act
As the first part of its statutory argument offered in support of its
motion for a preliminary injunction, Global Relief contends that the
search of its headquarters and the subsequent search of the home of
Global Reliefs executive director was an ultra vires action (which is
defined as an act which is beyond the powers conferred on executive
agencies by Congress). In response to this argument, the defendants have
asserted that the searches conducted on December 14, 2001 were in
accordance with the procedures identified in the Foreign Intelligence
Surveillance Act, 50 U.S.C. § 1801 et seq., (hereinafter "FISA").
FISA was passed by Congress in 1978 to "put to rest a troubling
constitutional issue" regarding the President's "inherent power to
conduct warrantless electronic surveillance in order to gather foreign
intelligence in the interests of national security." U.S. v.
Squillacote, 221 F.3d 542, 552 (4th Cir. 2000) (citing ACLU Found. of S.
California v. Barr, 952 F.2d 457, 460 (D.C. Cir. 1991)). FISA was enacted
to create by statute a "secure framework by which the Executive Branch
may conduct legitimate electronic surveillance for foreign intelligence
purposes within the context of this Nation's commitment to privacy and
individual rights." S. Rep. No. 95-604, at 15 (1978), reprinted in
1978 U.S.C.C.A.N. 3904, 3916.
To oversee the exercise of the powers granted by FISA to the Executive
Branch and to ensure that the new investigatory
power is used constitutionally and lawfully, FISA established the Foreign
Intelligence Surveillance Court, which is composed of seven federal
district court judges appointed by the Chief Justice of the United States,
to review applications for authorization of electronic surveillance aimed
at obtaining intelligence information. See 50 U.S.C § 1803. In 1994,
FISA was amended to give the Foreign Intelligence Surveillance Court
jurisdiction to hear applications for physical searches as well as
electronic searches. See 50 U.S.C. § 1821-29. Each application to the
Foreign Intelligence Surveillance Court must first be personally approved
by the Attorney General. See 50 U.S.C. § 1804 (a). The application
must contain, among other things, a statement of facts to justify the
belief that the target of the search is a foreign power or an agent of a
foreign power, that the premises or property to be searched contains
foreign intelligence information, and that the premises or property to be
searched is owned, used, or possessed by a foreign power or an agent of a
foreign power. Additionally, the application must contain a certification
by a senior Executive Branch official that the information sought is
foreign intelligence information which could not reasonably be obtained
by normal investigative techniques. See 50 U.S.C. § 1823 (a).
When the target of the surveillance is a "United States person" (which
the parties concede Global Relief is), the Foreign Intelligence
Surveillance Court may issue an order authorizing the surveillance only
if a FISA judge concludes there is "probable cause" to believe that the
target of the surveillance is a foreign power or agent of a foreign
power, that proposed "minimization procedures" are sufficient under the
terms of the statute, that the certifications required by section 1823
have been made, and that the certifications are not "clearly erroneous."
50 U.S.C. § 1824 (a)(3) — (5). Under the statute, an agent of a
foreign power is any person "who knowingly engages in clandestine
intelligence gathering activities for or on behalf of a foreign power,
which activities involve or may involve a violation of the criminal
statutes of the United States." 50 U.S.C. § 1801 (b)(2)(A). FISA
authorizes the federal district courts to review warrant applications and
probable cause determinations made by the Foreign Intelligence
Surveillance Court. See 50 U.S.C. § 1825 (d)-(g).
Furthermore, FISA provides that, when the United States intends to use
in a district court information derived from a FISA search or when an
aggrieved party requests discovery of information related to a FISA
application, the Attorney General must file "an affidavit under oath that
disclosure or an adversary hearing would harm the national security of
the United States." 50 U.S.C. § 1825 (g). Attorney General John
Ashcroft has filed such an affidavit in this case. This having been
done, the statute requires us to "review in camera and ex parte the
application, order, and such other materials relating to the physical
search as may be necessary to determine whether the physical search of
the aggrieved party was lawfully authorized and conducted." Id. As we
noted in our April 5, 2002 ruling denying Global Reliefs motion to
prevent consideration of certain materials in camera and ex parte, see
Global Relief Foundation, Inc. v. O'Neill, No. 02C674, slip op. at 5
(N.D. Ill. April 5, 2002), this Court decided to consider these
submissions. We have done so on an ex parte basis and have not permitted
counsel for Global Relief to review the submissions with us.
With this analytical framework in mind, we now turn to the facts of the
case currently before us. As was discussed above, agents of the FBI
arrived at the corporate headquarters of Global Relief and the
home of its executive director on December 14, 2001 and seized a
considerable amount of material they felt was relevant to their
investigation of Global Reliefs activities. As the defendants have
conceded in their briefs, no warrant had been obtained before the
FBI arrived either at Global Reliefs headquarters or the executive
director's residence. Nevertheless, FISA includes a provision which
states that, when the Attorney General declares that "an emergency
situation exists with respect to the execution of a search to obtain
foreign intelligence information" prior to the Foreign Intelligence
Surveillance Court acting on the application, a warrantless search
is authorized. 50 U.S.C. § 1824 (e)(1)(B)(i).
When such an emergency situation arises, the government must submit
a warrant application to the Foreign Intelligence Surveillance Court
within 72 hours of the warrantless search for approval. See
50 U.S.C. § 1824 (e), as amended by, P.L. 107-108,
115 Stat. 1394, 1402 (2001). In this case, the failure of the FBI agents
to present a FISA warrant on December 14 was caused by the Assistant
Attorney General's declaration that an emergency situation existed with
respect to the targeted documents and material. The defendants did submit
a warrant application to the Foreign Intelligence Surveillance Court on
December 15, as required by 50 U.S.C. § 1824 (e). We have reviewed
the warrant that issued and the submissions to the Foreign Intelligence
Surveillance Court in support of that warrant.
We conclude that the FISA application established probable cause to
believe that Global Relief and the executive director were agents of a
foreign power, as that term is defined for FISA purposes, at the time the
search was conducted and the application was granted. We are also
satisfied that Global Relief and the executive director were not targeted
because of any protected First Amendment activities in which they may
have engaged. Given the sensitive nature of the information upon which we
have relied in making this determination and the Attorney General's sworn
assertion that disclosure of the underlying information would harm
national security, it would be improper for us to elaborate further on
this subject. See Squillacote, 221 F.3d at 554 (finding probable cause to
authorize FISA surveillance and declining to comment further on the
probable cause issue when the Attorney General filed an affidavit); United
States v. Isa, 923 F.2d 1300, 1304 (8th Cir. 1991) (same).
This Court has concluded that disclosure of the information we have
reviewed could substantially undermine ongoing investigations required to
apprehend the conspirators behind the September 11 murders and undermine
the ability of law enforcement agencies to reduce the possibility of
terrorist crimes in the future. Furthermore, this Court is persuaded that
the search and seizure made by the FBI on December 14 were authorized by
FISA. Accordingly, we decline plaintiffs request that we declare the
search invalid and order the immediate return of all items seized.
2. The International Emergency Economic Powers Act
Global Relief also asserts that the International Emergency Economic
Powers Act, 50 U.S.C. § 1701 et seq., (hereinafter "IEEPA") does not
authorize OFAC's blocking order freezing its assets. Specifically, Global
Relief raises the following three arguments: 1) IEEPA did not grant the
authority to block purely domestic assets "during the pendency of an
investigation;" 2) the blocking order in this case directly violated
IEEPA's humanitarian relief exception; and 3) the President never legally
delegated the authority to OFAC to block the assets of an organization
"during the pendency of an investigation."
Additionally, we note that
Global Relief raised for the first time in its reply brief the argument
that 18 U.S.C. § 2339B, and not IEEPA, is the proper statutory
mechanism "to prevent [persons] subject to the jurisdiction of the U.S.
courts from supporting designated foreign terrorist organizations."
(Global Relief Reply Brief at 12.) Because the defendants have not cited
this particular statutory provision in their briefs to justify OFAC's
blocking order, we will not address it. Cf. Marie O. v. Edgar,
131 F.3d 610, 614 n. 7 (7th Cir. 1997) (it is generally not appropriate
to consider new arguments raised for the first time in a reply brief);
United States v. Magana, 118 F.3d 1173, 1198 n. 15 (7th Cir. 1997)
(same); Kastel v. Winnetka Bd. of Educ., 946 F. Supp. 1329, 1335 (N.D.
i) Statutory and Regulatory Background
For most of this country's history, the United States government has
utilized economic sanctions as a tool of its foreign policy. For most of
the 20th Century, government imposed sanctions were controlled by the
Trading with the Enemy Act (hereinafter the "TWEA"), which was enacted in
1917. As amended in 1933, TWEA granted the President "broad authority" to
"investigate, regulate . . . prevent or prohibit . . . transactions" in
times of war or declared national emergencies. See 50 U.S.C. app. §
5(b); Dames & Moore v. Regan, 453 U.S. 654, 672, 101 S.Ct. 2972 (1981).
In 1977, Congress enacted IEEPA and amended TWEA to govern "the
President's authority to regulate international economic transactions
during wars or national emergencies." S. Rep. No. 95-466, at 2 (1977),
reprinted in 1977 U.S.C.C.A.N. 4540, 4541. IEEPA provides that the
economic powers granted the President "may be exercised to deal with any
unusual and extraordinary threat, which has its source in whole or
substantial part outside the United States, to the national security,
foreign policy, or economy of the United States, if the President
declares a national emergency with respect to such threat."
50 U.S.C. § 1701 (a); Regan v. Wald, 468 U.S. 222, 228, 104 S.Ct.
3026 (1984). As with TWEA, IEEPA authorized the President to:
investigate, 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). As originally enacted, this language was
identical to the grant of power to the President under the parallel
provision of TWEA.
In response to the September 11 terrorist attacks, Congress in October
2001 enacted the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Pub L. 107-56, 115 Stat. 272 (the "USA Patriot Act"), which, inter
alia, expanded the authority of the President and his designees under
IEEPA. Specifically, section 106 of the new act added the words "block
during the pendency of an investigation" after the word "investigate" in
the above-quoted section of IEEPA's section 1702(a)(1)(B). The USA
Patriot Act also provided that, in case of judicial review of an IEEPA
blocking order, any classified information upon which the blocking
determination was made "may be submitted to the reviewing court ex parte
and in camera." 50 U.S.C. § 1702 (c) as added by 115 Stat. at 278.
Shortly after the September 11 attacks but before the enactment of the
USA Patriot Act, President Bush issued Executive Order 13224, effective
on September 24, 2001, declaring a national emergency with respect to the
"grave acts of terrorism . . . and the continuing and immediate threat of
further attacks on United States nationals or the United States." Exec.
Order No. 13,224, 66 Fed. Reg. 49,079 (2001). In determining that actual
and threatened terrorist acts constituted "an unusual and extraordinary
threat to the national security, foreign policy, and economy of the
United States," the President invoked the powers granted by, inter alia,
IEEPA. Id. The Executive Order designated 27 terrorists, terrorist
organizations, and their supporters, and blocked their property and
property interests that have been in the United States, that subsequently
will come within the United States, or that come within the "possession
or control" of U.S. persons. Id.
In addition, the Executive Order authorized the Secretary of State, in
consultation with the Secretary of the Treasury and the Attorney
General, to designate as subject to the provisions of the order any
"foreign persons" whom he determines "have committed or . . . pose a
significant risk of committing, acts of terrorism that threaten the
security of U.S. nationals or the national security, foreign policy, or
economy of the United States." Id. The order also authorized the
Secretary of the Treasury, in consultation with the Secretary of State
and the Attorney General, to designate "persons" (defined in the order as
individuals or entities) whose property or interests in property should
be blocked because they "act for or on behalf of' or are "owned or
controlled by" designated terrorists, or they "assist in, sponsor, or
provide . . . support for," or are "otherwise associated" with them. Id.
Finally, for purposes of this opinion, the Executive Order also granted
the Secretary of the Treasury the power "to employ all powers granted to
the President by IEEPA . . ." Id. The President authorized the Secretary
of the Treasury to promulgate rules and regulations to carry out the
purposes of the order and to redelegate such functions if he so chose.
Pursuant to a delegation of authority from the Secretary of the
Treasury, OFAC has promulgated general regulations governing the various
sanctions programs. See 31 C.F.R. pt. 500; see also Wald, 468 U.S. at 226
n. 2. These regulations permit a designated individual or entity, or one
whose assets have been blocked, to seek a license from OFAC to engage in
any transaction involving blocked property. See
31 C.F.R. § 501.801-.802. In addition, the regulations establish a procedure to allow
a person to "seek administrative reconsideration" of a designation if a
party believes an error has been made. See 31 C.F.R. § 501.807.
Believing that Global Relief "may be engaged in activities that
violate" the Executive Order and IEEPA, on December 14, 2001, the
Secretary of the Treasury issued a notice temporarily blocking Global
Reliefs accounts and business records pending further investigation. The
notice informed Global Relief of its right to submit evidence to
challenge the blocking and/or request agency licenses. The record
indicates that Global Relief has filed numerous applications for licenses
since December 14, most of which have been approved by OFAC.
In situations such as this when a plaintiff is challenging an agency's
interpretation of its own regulations, we note that such an
interpretation must be given "controlling weight unless it is plainly
erroneous or inconsistent with the regulation." Stinson v. United
States, 508 U.S. 36, 45, 113 S.Ct. 1913
(1993); see also Paradissiotis
v. Rubin, 171 F.3d 983, 988 (5th Cir. 1999); Consarc Corp. v. Iraqi
Ministry, 27 F.3d 695, 701 (D.C. Cir. 1994); D.C. Precision, Inc. v.
U.S. Government, 73 F. Supp.2d 338, 344 (S.D.N.Y. 1999). This is
especially true in matters which involve foreign policy and national
security considerations. In these cases, we are "particularly obliged to
defer to the discretion of executive agencies interpreting their
governing law and regulations." Paradissiotis, 171 F.3d at 988 (citing
Haig v. Agee, 453 U.S. 280, 292, 101 S.Ct. 2766 (1981) and Miranda v.
Secretary of Treasury, 766 F.2d 1, 3-4 (1st Cir. 1985)). With this in
mind, we now turn to the substance of Global Reliefs statutory
ii) Does IEEPA grant the defendants the power to block domestic
Global Relief argues that IEEPA does not allow the government to block
or freeze the purely domestic assets of a U.S. person (which for purposes
of the statute includes a charitable entity incorporated in the U.S.).
Instead, Global Relief asserts that IEEPA only authorizes the President
to regulate property in which foreign persons have an interest. (Global
Relief Prelim. Injunction Brief at 7.) Because Global Relief is a U.S.
person and its property is exclusively domestic, plaintiff reasons that
OFAC did not have authority ...