Chai v. Department of State

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 8, 2006 Decided October 17, 2006

No. 03-1392

KAHANE CHAI, ET AL.,

PETITIONERS

v.

DEPARTMENT OF STATE AND

CONDOLEEZZA RICE, SECRETARY OF STATE,

RESPONDENTS

On Petition for Review of an Order of the

Secretary of State

Kenneth Klein argued the cause and filed the briefs for

petitioners.

Douglas N. Letter, Terrorism Litigation Counsel, U.S.

Department of Justice, argued the cause for respondent. With

him on the brief were Peter D. Keisler, Assistant Attorney

General, and Mark S. Davies, Attorney.

Before: GINSBURG, Chief Judge, and SENTELLE, Circuit

Judge, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Chief Judge GINSBURG.

2

GINSBURG, Chief Judge: In October 2003 Secretary of

State Colin Powell redesignated Kahane Chai as a Foreign

Terrorist Organization (FTO), redesignated Kach as an alias of

Kahane Chai, and newly designated Kahane.org as an alias of

Kahane Chai. After a de novo reconsideration in 2004, the

Secretary reaffirmed all three designations. The three entities

now petition for revocation of the 2003 designations. We

conclude the designations complied with applicable statutory

and constitutional requirements and, accordingly, we deny the

petition.

I. Background

The Antiterrorism and Effective Death Penalty Act of 1996

(AEDPA) authorizes the Secretary of State to designate an entity

as a FTO if the Secretary finds:

(A) the organization is a foreign organization;

(B) the organization engages in terrorist activity ... or

retains the capability and intent to engage in terrorist

activity or terrorism[]; and

(C) the terrorist activity or terrorism of the organization

threatens the security of United States nationals or the

national security of the United States.

8 U.S.C. § 1189(a)(1). “Terrorist activity” is defined, in

relevant part, as

any activity which is unlawful under the laws of the

place where it is committed ... and which involves any of

the following:

(IV) An assassination.

3

(V) The use of any —

(a) biological agent, chemical agent, or

nuclear weapon or device, or

(b) explosive, firearm, or other weapon

or dangerous device (other than for mere

personal monetary gain),

with intent to endanger, directly or indirectly, the

safety of one or more individuals or to cause

substantial damage to property.

(VI) A threat, attempt, or conspiracy to do any of

the foregoing.

Id. § 1182(a)(3)(B)(iii). To “engage in terrorist activity”

includes, among other acts, “solicit[ing] funds or other things of

value for — (aa) a terrorist activity [or] (bb) a terrorist

organization.” Id. § 1182(a)(3)(B)(iv).

Designation as a FTO has three main consequences: (1)

“Except as authorized by the Secretary, any financial institution

that becomes aware that it has possession of, or control over,

any funds in which a foreign terrorist organization ... has an

interest shall ... retain possession of, or maintain control over

such funds,” 18 U.S.C. § 2339B(a)(2); (2) “Any alien who ... is

a representative ... of ... a terrorist organization,” 8 U.S.C. §

1182(a)(3)(B)(i), is “ineligible to receive visas and ineligible to

be admitted to the United States,” id. § 1182(a); (3) and it

becomes a crime to “knowingly provide[] material support or

resources to [the] foreign terrorist organization, or attempt[] or

conspire[] to do so,” 18 U.S.C. § 2339B(a)(1).

Kach and Kahane Chai, organizations the stated purpose of

which is to restore the biblical state of Israel, were declared

4

terrorist organizations by the Israeli Cabinet in 1994 pursuant to

Israel’s 1948 Terrorism Law. The Secretary of State first

designated Kahane Chai and Kach as FTOs in 1997, Designation

of Foreign Terrorist Organizations, 62 Fed. Reg. 52,650, 52,650

(Oct. 8), and redesignated them as such in 1999, Designation of

Foreign Terrorist Organizations, 64 Fed. Reg. 55,112, 55,112

(Oct. 8), and 2001, Redesignation of Foreign Terrorist

Organizations, 66 Fed. Reg. 51,088, 51,089 (Oct. 5). In 2001

the Secretary also designated Kach and 16 other organizations

as aliases of Kahane Chai. Id. Neither Kahane Chai nor any of

its aliases sought judicial review of any of these designations.

On September 3, 2003 the Department of State wrote letters

to five persons it thought “might represent” Kahane Chai stating

that the Secretary proposed to redesignate Kahane Chai, Kach,

and Kahane Chai’s other aliases as FTOs. The notice stated that

the unclassified portion of the administrative record before the

Department would be provided to any representative of Kahane

Chai or of an alias who so requested within ten days from

receipt thereof; the representative would have 15 days from

receipt of the record to submit a response.

On September 16 Samuel Abady, Esq. sent a letter in which

he identified himself as counsel to one of the addressees of the

September 3 notice; noted his response was timely; conveyed

his client’s position that Kahane Chai, Kach, and the other

presumed aliases were “legitimate, Jewish activist organizations

... not one of [which] practices, supports or advocates

terrorism”; and demanded disclosure of the administrative

record. The Department of State deemed the letter defective

because it did not say Mr. Abady was requesting the record “as

a representative of Kahane Chai or one of its aliases.” On

October 1 Kenneth Klein, Esq. sent a letter to the Department in

which he identified himself as the attorney for a representative

of Kach and requested the record, but the Department deemed

5

his letter untimely.

On October 2, 2003 Secretary of State Colin Powell

redesignated Kahane Chai as a FTO and Kach and 16 others as

aliases of Kahane Chai. Redesignation of Foreign Terrorist

Organizations, 68 Fed. Reg. 56,860, 56,861. At the same time

the Secretary newly designated 20 more entities as aliases of

Kahane Chai, including Kahane.org, newkach.org, Kahane.net,

and Kahanetzadak.com. Id. Drawing upon both classified and

unclassified information, the Secretary concluded that Kahane

Chai engaged in terrorist activity by (1) using explosives or

firearms with intent to endanger the safety of individuals or

cause substantial damage to property, (2) threatening and

conspiring to carry out assassinations, and (3) soliciting funds

and members for a terrorist organization. The Secretary also

concluded that Kahane Chai retains the capability and intent to

engage in terrorist activity.

After the petitioners had filed for judicial review of the

Secretary’s decision, the State Department agreed to provide Mr.

Klein and Mr. Abady, as representatives of Kahane Chai, with

the unclassified portion of the administrative record, to accept

relevant submissions for inclusion in the record, and to make a

de novo decision on redesignation. In 2004, the Secretary

conducted the de novo review and concluded that, although the

record included conflicting information on many of the

bombings previously attributed to Kahane Chai, the rest of the

record supported its redesignation. The Secretary also

concluded that Kahane.net was no longer an alias of Kahane

Chai and revoked its designation as a FTO, but left in place all

other designations as aliases of Kahane Chai. Foreign Terrorists

and Terrorist Organizations, 70 Fed. Reg. 4,186 (Jan. 28, 2005).

6

II. Analysis

The three petitioners, in a joint brief, raise both statutory

and constitutional objections to their designations. First, they

argue the designations were made without substantial support in

the administrative record. Second, they contend the State

Department’s refusal to provide them with the administrative

record prior to the 2003 designations denied them due process,

in violation of the Fifth Amendment to the Constitution of the

United States. Third, the petitioners allege that designating a

website as a FTO violates the First Amendment to the

Constitution. Finally, the petitioners contend the State

Department discriminated upon the basis of religion because it

designated as FTOs the websites only of Jewish organizations.

A. Statutory Claims

Our standard of review is deferential. Under the AEDPA

(as amended by Pub. L. No. 104-208, § 356, 110 Stat. 3009,

3009-644 (1996)) we are to set aside the Secretary’s designation

of a FTO only if that designation was

(A) arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law;

(B) contrary to constitutional right, power, privilege, or

immunity;

(C) in excess of statutory jurisdiction, authority, or

limitation, or short of statutory right;

(D) lacking substantial support in the administrative

record taken as a whole or in classified information

submitted to the court ... or

(E) not in accord with the procedures required by law.

8 U.S.C. § 1189(c). Our review is to be “based solely upon the

administrative record, except that the Government may submit,

7

for ex parte and in camera review, classified information used in

making the designation.” Id. Moreover, we make no judgment

as to the accuracy of the information in the record; “our only

function is to decide if the Secretary, on the face of things, had

enough information before [him] to come to the conclusion that

the organizations were foreign and engaged in terrorism.”

People's Mojahedin Org. of Iran v. U.S. Dep’t of State, 182 F.3d

17, 25 (D.C. Cir. 1999) (PMOI I).

The petitioners challenge as a denial of due process the

Secretary’s use of classified information in designating them

FTOs. We need not resolve that claim, however, for in this case

we can uphold the designations based solely upon the

unclassified portion of the administrative record. See People’s

Mojahedin Org. of Iran v. Dep’t of State, 327 F.3d 1238, 1243

(D.C. Cir. 2003) (PMOI II); id. at 1245 (Edwards, J.,

concurring).

1. Redesignation of Kahane Chai as a FTO

The petitioners assert the Secretary’s finding Kahane Chai

threatened an assassination is based upon a faulty interpretation

of the record. In response, the Department notes the Secretary

based his conclusion upon four documents. The first is a

transcript of a July 1, 2002 radio broadcast by the Jerusalem

Voice of Israel Network reporting that death threats had been

made against Israeli police officers investigating the “Jewish

terrorist squad case,” an apparent reference to the attempted

bombing by right-wing extremists of an Arab school for girls.

An activist with ties to Kach was arrested in connection with the

bombing. The second document is an article in the November

3, 2003 newspaper Ma’ariv reporting that Kach activists had

organized demonstrations near the house of “one of the heads”

of the Jewish Affairs Division of the Shin Bet (General Security

Service) to protest the conditions of the detained members of the

8

“Jewish terrorist squad” accused of the attempted bombing. The

protestors had sprayed graffiti spelling out the official’s name

(the publication of which was banned), and demanding he “stop

abusing Jews.” The official’s wife is quoted as saying, “Our

family is facing harassment and threats.” The third document is

a May 28, 2003 summary by the Foreign Broadcast Information

Service (FBIS) of news reports indicating right-wing activists,

including members of Kach, had launched a “personal

incitement campaign” against then–Prime Minister Sharon. The

fourth document summarizes a July 2003 radio broadcast by the

Jerusalem Voice of Israel Network reporting that “Shin Bet

Director Dichter said ... the threat to the life of Prime Minister

Sharon had grown” and “there was a threat from ... several

dozen Kahanist extremists.” The Secretary held these four

documents sufficient evidence to support the redesignation of

Kahane Chai and we agree.

The petitioners apparently assume that if the record does not

expressly tie Kahane Chai to a threat of assassination, then the

Secretary may not designate it as a FTO on that ground. We do

not read “substantial support” so narrowly; rather, the record

need provide only a sufficient basis for a reasonable person to

conclude that Kahane Chai was likely behind such a threat. See

PMOI I, 182 F.3d at 25; cf. Consol. Edison Co. v. NLRB, 305

U.S. 197, 229 (1938) (“substantial evidence” standard requires

“such relevant evidence as a reasonable mind might accept as

adequate to support a conclusion”).

In this case the record indicates — and the petitioners do

not deny — that Kahane Chai venerates Baruch Goldstein

because he massacred 29 Arab worshippers at the Al-Haram

Al-Ibrahimi (Sanctuary of Abraham) or Tomb of the Patriarchs

in Hebron. Following the attack Kahane Chai issued a statement

calling Goldstein a “hero” and in 2002 its alter ego Kach went

so far as to advertise a summer camp for children the program

9

of which included “a pilgrimage to [Goldstein’s] grave.”

Kahane Chai’s glorification of the murderous Goldstein, though

hardly dispositive, surely makes more credible the evidence

supporting the organization’s involvement in threats of

assassination.

With this in mind, the Secretary reasonably found Kahane

Chai was responsible for the death threats made in 2002 against

the police officers investigating the Jewish terrorist squad case.

The record does not identify any one group as being responsible

for the threats, but the evidence suggests Kach was involved in

the underlying crime. A man described in a cable from the

American Consulate in Jerusalem to the Secretary of State as “a

leader” of Kach — which is to say, Kahane Chai — was

“reportedly arrested in connection with the attempted bombing.”

Clearly, Kach/Kahane Chai took a strong interest in the affair,

as indicated by the demonstrations at the home of the Shin Bet

official. Surely the Secretary could reasonably conclude that an

organization (1) known to approve of terrorist tactics, including

the mass murder of Arab worshippers, (2) possibly linked to the

attempted bombing of an Arab school, and (3) demonstrably

interested in the latter affair, was responsible for the death

threats made against the officers investigating that crime.

(Kahane Chai does not argue that death threats against police

officers are not threats of assassination and we therefore take the

point as conceded.)

Finally, the Secretary reasonably found Kahane Chai had

threatened the life of then–Prime Minister Sharon. Shin Bet

Director Avi Dichter warned of an increased threat to Sharon’s

life based upon comments from both “right-wing Jewish

extremists and Palestinian terrorist organizations,” including

among the former “several dozen Kahanist extremists.” The

petitioners claim not all Kahanists are members of Kahane Chai

and therefore argue the alleged threat cannot be linked to

10

Kahane Chai. The record provides some support for the

petitioners’ point about membership, but we do not invalidate a

designation simply because it is logically possible that the

Secretary’s conclusion might be wrong. Rather, our task is to

determine whether there is in the record substantial support for

the Secretary’s conclusion. And there is: The Shin Bet Director

clearly identified a threat from “Kahanist extremists” and the

Secretary could reasonably infer that a Kahanist extremist is

likely a member of Kahane Chai.

Upon the basis of the foregoing analysis, we conclude the

Secretary’s redesignation of Kahane Chai as a FTO has

substantial support in the record. Therefore, we consider neither

the Department’s other evidence in support of this redesignation

nor Kahane Chai’s objections thereto.

2. Designation of Kach and Kahane.org

When a FTO is known by another name, the organization

may be designated a FTO under that name as well. See Nat’l

Council of Resistance of Iran v. Dep't of State, 251 F.3d 192,

200 (D.C. Cir. 2001) (NCRI I) (“If the Secretary has the power

to work those dire consequences [associated with designation]

on an entity calling itself ‘Organization A,’ the Secretary must

be able to work the same consequences on the same entity while

it calls itself ‘Organization B’”). The petitioners contend the

Secretary’s redesignation of Kach as an alias of Kahane Chai

lacks substantial support in the record. In response, the

Government points both to a report by the Center for Defense

Information stating that the groups have “an overlapping

membership of several dozen core members,” and to Kahane

Chai leader Michael Guzofsky’s public statement, quoted in the

New York Times, that “if we can’t be KACH or Kahane Chai we

will be simply Kahane.” In addition, the declaration of Kenneth

Piernick, then the Acting Chief of International Terrorism

11

Operations Section II, Counterterrorism Division, Federal

Bureau of Investigation, states that “the principal US members

of Kahane Chai/KACH have consistently” changed the names

of their organization in an attempt to evade legal responsibility

for their actions.

This evidence provides substantial support for the

Secretary’s redesignation of Kach as an alias of Kahane Chai.

The organizations protest that they are distinct because, as Mr.

Piernick himself attests, Kahane Chai was formed at the instance

of Guzofsky and others “who believed that KACH was not

taking a strong enough stand against the Arabs.” That was in

1990, however. As the Department correctly pointed out in the

analysis it prepared for the Secretary of the materials submitted

by counsel for the petitioners, “separate groups with overlapping

membership and similar goals may effectively merge and

become one organization” over time. Tellingly, the petitioners

did not present any evidence to suggest the two organizations,

although apparently different in 1990, were still separate and

distinct in 2003 or 2004.

The petitioners also claim the Secretary’s designation of

Kahane.org as a FTO lacks substantial support. Under the

AEDPA, if a FTO “so dominates and controls” an entity that

“the latter can no longer be considered meaningfully

independent from the former,” Nat’l Council of Resistance of

Iran v. Dep’t of State, 373 F.3d 152, 158 (D.C. Cir. 2004) (NCRI

II), then the controlled entity may be deemed a FTO.* A weaker

principal-agent relationship may be sufficient as well. See id.

* In NCRI II we referred to this test as the requirement for designation

as an alias of a FTO. 373 F.3d at 158. Because there is a difference

between an alias of a FTO, that is, a different name for the same

organization, and an entity that is not meaningfully independent of a

FTO, for clarity we describe the latter as a “controlled entity.”

12

The record contains an analysis of Kahane.org by the FBIS

concluding “there is little difference between the agendas and

the websites” of Kach and Kahane Chai on the one hand and

those of Kahane.org on the other. This conclusion was based

upon an analysis of the website’s “content, design, and

hyperlinks.” The report also identifies Kahane.org’s “billing

contact” as Michael Guzovsky — a leader, as we have seen, of

Kahane Chai, and one who believed a change of name was just

the thing to evade responsibility.

Kahane.org argues the analysis by the FBIS does not

provide substantial support for its designation as a controlled

entity of Kahane Chai because “many organizations that have

similar ideologies and interests have common links and

sometimes have similar layouts in their web pages.” Again this

argument rests upon the mistaken premise that substantial

support means conclusive proof. On the contrary, the Secretary

is not obliged to negate every exculpatory possibility raised by

a candidate for designation as a FTO. He may, that is, adduce

substantial support for a conclusion that, if all the facts were

known, might be erroneous.

In this case, the identification of Guzofsky, the chameleon-

like leader of Kahane Chai, as the billing contact for

Kahane.org, in combination with the similarity of the website’s

agenda to that of Kahane Chai, provides substantial support for

the conclusion that Kahane.org is not “meaningfully

independent” of Kahane Chai. We therefore hold the Secretary

had sufficient information before him to conclude that Kach is

an alias and Kahane.org is a controlled entity of Kahane Chai.

B. Due Process

An organization with a sufficient connection to the United

States has the right to be heard “at a meaningful time and in a

13

meaningful manner,” NCRI I, 251 F.3d at 208 (quoting Mathews

v. Eldridge, 424 U.S. 319, 333 (1976)), before being deprived of

a protected interest in liberty or property. Consequently, unless

it makes a showing of particularized need not to do so, id. at

208, the Government must notify such an organization of its

impending designation as a FTO and of the unclassified items

upon which the Government proposes to base that designation.

Id. at 208-09. Furthermore, the organization must be given an

opportunity to present in written form such evidence as it can to

rebut the evidence in the record or otherwise to fend off its

impending designation. Id. at 209.

The present petitioners were not given access to the

administrative record before they were designated or

redesignated FTOs in 2003. The Government defends this

omission on the grounds that the Abady letter did not indicate it

was written on behalf of a representative of Kahane Chai or an

alias thereof and the Klein letter was received too late. The

petitioners respond that, although Abady did not expressly say

he was acting on behalf of a representative of Kahane Chai, he

did say he wrote as counsel for a named individual who, as State

must have known, was one of the addressees of the notice the

Department sent to persons it thought “might represent” Kahane

Chai, and in the circumstances that was sufficient. Moreover,

they point out that the notice did not indicate Kahane.org was

under consideration for designation as a FTO.

We do not resolve the petitioners’ claims of procedural

error because the alleged errors were, in the particular

circumstances of this case, clearly rendered harmless. In

response to the petitioners’ procedural objections, the

Government offered to do and in 2004 did a de novo

determination of their status. This time the petitioners were

provided, and took full advantage of, the opportunity to inspect

and to supplement the record upon which the review would be

14

based.* The result was the same as in 2003 — all three

petitioners were designated or redesignated FTOs — and the

petitioners have not challenged the 2004 review. It follows

apodictically that providing the petitioners with the

administrative record prior to the 2003 designation would have

had no effect upon the outcome of which they now complain.

The petitioners nonetheless claim the procedures used in the

2003 review harmed them because the Department’s subsequent

agreement to do a de novo review caused a delay in filing the

administrative record, and thereby delayed their opportunity for

judicial review. Even if true, however, the point is irrelevant.

An error is harmless if it was not material to the outcome of the

proceeding. PDK Labs., Inc. v. U.S. Drug Enforcement Admin.,

362 F.3d 786, 799 (D.C. Cir. 2004). The outcome of the 2004

review, which was unaffected by any allegedly defective

procedure, shows the outcome of the 2003 review would not

have been different if the Government had provided the

petitioners with the record and an opportunity to present

evidence in 2003.**

* The 2004 record appears to differ from the 2003 record only by the

addition of the petitioners’ responses and deletion of the materials,

previously incorporated by reference, from the 1997, 1999, and 2001

designation and redesignation proceedings against Kahane Chai.

** The petitioners’ due process objection also suggests a question of

mootness and therefore of our jurisdiction. Although neither party has

raised the issue, the court is obliged nonetheless to determine that it

has jurisdiction. Ass’n of Admin. Law Judges v. FLRA, 397 F.3d 957,

961 n.* (D.C. Cir. 2005). As the Supreme Court explained in

Calderon v. Moore, 518 U.S. 149 (1996), “[A]n appeal should ... be

dismissed as moot when, by virtue of an intervening event, a court of

appeals cannot grant ‘any effectual relief whatever’ in favor of the

appellant.” Id. at 150 (quoting Mills v. Green, 159 U.S. 651, 653

(1895)). In the present case the question is whether the 2004

15

C. Free Speech

The petitioners argue that designating Kahane.org a FTO

violates the First Amendment because the website is a “medium

of free speech”; it “expresses a viewpoint[, b]ut it does not

advocate terror.” As the Government points out, however, and

as we have held, the AEDPA does not purport to restrain speech;

the statute “is not aimed at interfering with the expressive

component of [an organization’s] conduct.” PMOI II, 327 F.3d

at 1244 (quoting Humanitarian Law Project v. Reno, 205 F.3d

1130, 1135 (9th Cir. 2000)). Instead, the focus is upon the

nonexpressive component of the organization’s conduct, see id.,

and the Government clearly may restrain such conduct when it

facilitates terrorist activity. See Humanitarian Law, 205 F.3d at

1134-35 (“While the First Amendment protects the expressive

component of seeking and donating funds, expressive conduct

receives significantly less protection than pure speech”).

Kahane.org has been designated a controlled entity of

Kahane Chai and we have upheld that designation. A restraint

upon the conduct of Kahane.org is therefore tantamount to a

restraint upon the conduct of Kahane Chai itself. See NCRI I,

251 F.3d at 200. And it is established that the restraints imposed

upon a FTO by the AEDPA — namely the organization’s loss

of access to funds held by financial institutions subject to United

States law, the inability of alien representatives of the FTO to

receive visas or enter the United States, and the prohibition upon

designation is an intervening event that forecloses relief from the 2003

designation. We think not. The possibility of prosecution pursuant to

18 U.S.C. § 2339B(a)(1) of any individual who knowingly gave

material support to Kahane Chai or any of its designated aliases during

the time between the 2003 and 2004 reviews is a collateral

consequence that creates an exception to the mootness doctrine.

PMOI II, 327 F.3d at 1244 n.2.

16

knowingly donating to the FTO — do not violate the FTO’s first

amendment right to speak, see PMOI II, 327 F.3d at 1244-45;

see also Humanitarian Law, 205 F.3d at 1135-36, a point not

even Kahane Chai challenges. It follows that the AEDPA’s

restraints upon Kahane.org do not violate its first amendment

right to speak.

D. Religious Discrimination

Kahane.org maintains the State Department discriminated

against it upon the basis of religion because the Department in

2003, the first year in which it designated any websites as FTOs,

“designat[ed] only Jewish websites, all alleged aliases of

Kahane Chai, when other FTOs have websites, and sometimes

use those sites for despicable purposes.” This claim implicitly

assumes websites designated as FTOs are the appropriate

universe within which to determine whether there has been

discrimination against a particular religion. The petitioners offer

no defense of that assumption, we see none, and common sense

suggests the appropriate universe for evaluation of a

discrimination claim is the complete list of designated FTOs,

which, as the petitioners acknowledge, includes many non-

Jewish organizations. Consequently, we find no evidence of

religious discrimination at work in the designation of

Kahane.org.

III. Conclusion

For the foregoing reasons, we hold the Secretary’s 2003

redesignations of Kahane Chai and Kach, and his designation of

Kahane.org, were based upon substantial support in the record

and did not violate the petitioners’ constitutional rights.

Accordingly, the petition for review is

Denied.