The federal government withheld basic information, failed to divulge evidence and otherwise denied an Ashland-based Islamic organization its due-process rights when designating it a terrorist group, an attorney for the Al-Haramain Islamic Foundation said Wednesday. 

The group was forced to guess why it was labeled a terrorist organization in 2004, hampering its ability to challenge the designation by the U.S. Treasury Department, said David Cole, a professor with the Georgetown University Law Center. 

The case provides a window into the federal government's approach to rooting out groups that it believes are funding radical movements. 

Cole, as well as an attorney for the government, offered oral arguments to a three-judge panel of the 9th U.S. Circuit Court of Appeals, which is hearing cases in Portland this week. The judges are considering appeal requests by both sides challenging elements of a judgment issued by U.S. District Judge Garr King in November 2009. 

King backed the government's designation of Al-Haramain as a terrorist organization, but found that federal officials violated the group's constitutional rights by failing to provide adequate notice before making the designation. 

Cole said the government didn't share the accusations against the group for four years after listing it as a terrorist organization. 

Such a designation, he said, is "a form of civil death." The foundation has had its assets frozen and is not actively operating but wants the chance to challenge the designation and resume its mission of Islamic education, he said after the hearing. 

"That's all we're seeking -- a fair shot to defend ourselves," Cole told the judges. He added that the government also relied in great part on classified evidence that investigators have never shown the group or its lawyers despite their requests for an unclassified version or to be granted security clearance. 

But a lawyer for the U.S. Department of Justice argued that Al-Haramain did not suffer any harm, saying the group was able to correctly guess the reasons for its designation. 

Attorney Douglas Letter also contended the evidence shows that the group, an offshoot of a global Al-Haramain network that has since been designated a terrorist organization by the federal government, merits the label. He noted that three of the four founding board members were officers of the global organization. 

"The evidence is overwhelming," he said. One board member was later flagged as a "Specially Designated Global Terrorist," he said. 

"Al-Haramain has been one of the key financial supporters for groups such as al-Qaida," he said. 

The appeals judges questioned what the harm was in letting individuals or organizations know the basis for adding them to the list. Judge Dorothy Nelson noted that a terrorist designation can "destroy people" and businesses. 

Letter argued that the government deals with terrorist designations of thousands of individuals and entities. "It would be extremely burdensome if the agency had to give notice of charges for each individual or entity that it was considering for designation," he said. 

But Judge Sidney Thomas said: "I don't understand the burdensome nature of sending someone a letter explaining the reasons." 

The case also involves whether the federal government violated the First Amendment rights of the Multicultural Association of Southern Oregon by barring the nonprofit from coordinating with Al Haramain to protest the foundation's treatment. 

Letter said courts have already ruled that organizations can be prohibited from providing services for a designated terrorist group. Such services could free up the group's resources to be deployed for terrorist purposes, he said. 

But Cole argued that the Multicultural Association's case was different. Unlike the case cited by the government, the nonprofit was seeking to assist a domestic group -- not a foreign organization -- that had been labeled a terrorist group. The federal government had frozen Al-Haramain's assets, eliminating the risk that the foundation could redirect resources to terrorist purposes, he said. 

There is no set timetable for a decision from the appeals court.  

The appeal does not involve the related criminal case against Pete Seda, also known as Pirouz Sedaghaty, who is seeking a new trial after being convicted last September of helping smuggle $150,000 to Saudi Arabia through Al-Haramain. 

In another related case, the federal government is appealing a 9th Circuit Court decision that found the government illegally wiretapped Al-Haramain phone conversations. 

March 09, 2011, Oregon Live