CAIR collects millions from foreign donors thanks to non-profit shell game

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The Council on American-Islamic Relations (CAIR) conceals donations from overseas through a series of shell organizations, according to documents from court actions involving the Muslim advocacy group.

Since its founding in 1994, CAIR has presented itself to American Muslims and the media as a single organization centered on American concerns. But it shows a different face to the IRS, with multiple corporate entities that conceal the large financial donations that come to CAIR from Middle East sources.

As a registered lobbying group, CAIR is required to report to the IRS contributions over $5,000. Its shifting 501(c)(3) and 501(c)(4) branches, however, make it possible to collect millions of dollars from oil-rich Muslim nations without disclosure. Documents show CAIR has received millions of dollars in overseas contributions and tens of millions in pledges from overseas.

CAIR’s convoluted structure and funding machinations are dizzying. Today, the original Council on American Islamic Relations doesn’t exist at all. In June 2013, CAIR changed its name to the nondescriptly named Washington Trust Foundation, Inc. (WTF).

“Plentiful legal evidence, acquired in the course of a lawsuit—plus CAIR’s own official filing documents to the Department of Consumer and Regulatory Affairs (DCRA) and IRS—make clear that CAIR has engaged in a thinly-disguised money laundering operation,” David Reaboi, vice president for strategic communications at the Center for Security Policy, told The Daily Caller.

“In addition to violating its 501(c)(3) regulations, CAIR’s undisclosed and hidden foreign donations amount to violation of the Foreign Agent Registration Act as well,” Reaboi continued.

CAIR formed in 1994 by filing with the Department of Consumer and Regulatory Affairs (DCRA) and soon after obtained 501(c)(4) status from the IRS as a non-profit lobbying organization.

The year before, the organization’s two founders — current Executive Director Nihad Awad and Omar Ahmad — were captured on FBI wiretaps of high-level Hamas leaders, discussing the need for a public relations effort supporting that group. On the recorded meetings and phone calls, the terrorist group was referred to, in code, as “Samah,” as the participants made covert efforts to fund and promote its activities in the West Bank and the Gaza Strip to the tune of millions of dollars.

At the time, both CAIR founders Awad and Ahmad served in leadership positions in a key piece of the Muslim Brotherhood’s network in the United States, the Islamic Association for Palestine (IAP), which was founded by Hamas political director Mousa Abu Marzook before he was deported from the United States.

In 2008 both the IAP and CAIR founder Ahmad were designated unindicted co-conspirators in the largest terrorism funding trial in American history, US vs. Holy Land Foundation.

CAIR and other Islamic groups sought unsuccessfully to petition the government to clear its name. In 2009, U.S. District Court Judge Jorge Solis rejected their appeal and maintained their status as unindicted coconspirators, noting, “the government has produced ample evidence to establish the associations of CAIR…with NAIT [North American Islamic Trust], the Islamic Association for Palestine, and with Hamas.”

Despite the group’s ties to Hamas and its court-documented origins as part the Muslim Brotherhood’s network in America, CAIR officials — including Awad, its communications director Ibrahim Hooper, and others — have appeared in media, been praised by politicians and continued to claim to represent the American Muslim community.

This last claim may ring hollow, though, as CAIR’s fundraising practices are constructed in a way that makes it impossible to trace large donations from overseas, including from foreign governments.

While behaving and referring to itself as a single organization, CAIR has taken advantage of the lack of donor reporting requirements for its de-listed 501(c)(4) non-profit to collect funds from large donors who remain anonymous, then depositing the funds into its 501(c)(3) entity. This practice is referred to in the federal criminal statutes as “laundering” of funds.

When foreign funds are laundered into a US political non-profit this way, it runs afoul of the Foreign Agent Registration Act, a 1938 statute requiring “persons acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of their relationship with the foreign principal.” Similarly, it is illegal under US law to shift funds from overseas in order not to report to the IRS.

More than a decade after CAIR obtained a 501(c)(4) certification from the IRS, it created CAIR-Foundation, Inc., a non-profit organization to offer tax deductions to its American donors in 2005. CAIR-Foundation obtained 501(c)(3) status from the IRS in 2007.

The original 501(c)(4) CAIR then formally changed its name to CAIR-Action Network, Inc. The group never made this name change public, and its representatives have never referred to it as such.

Although CAIR-Foundation had obtained its 501(c)(3) status in 2007, it never filed required IRS 990 forms through 2008-2010, and was subsequently de-listed in 2011.

When attempting to get reinstated as a non-profit with the IRS, CAIR admitted the close relationship between the two groups:

“CAIR Action Network and CAIR Foundation have overlapping boards,” the 2013 reinstatement document reads. “CAIR Action Network donates office space to CAIR Foundation at no cost to CAIR Foundation. The Council on American-Islamic Relations Action Network, Inc. (‘CAIR Action Network’), with which CAIR Foundation is closely connected, owns various trademarks related to the name CAIR and Council on American-Islamic Relations. The Organization has a license to use those trademarks from CAIR Action Network. The Organization does not pay any fee or royalty to CAIR Action Network for these licenses.”

The original 1994 CAIR (now CAIR-Action Network) maintained only one website, which listed itself as a 501(c)(3) at the bottom of page. It made no distinction between its lobbying and non-profit arms. In this way, it was able to solicit funds both transparently and non-transparently.

Under IRS regulations, an organization may have 501(c)(3) and 501(c)(4) related entities, but it must maintain a wall between the two. This is accomplished by establishing separate bank accounts, board of directors, bookkeeping, and payroll. CAIR, though, had none of these.

International donors, like the government of Qatar, have made donations to “CAIR.” CAIR deposits such donations into whatever bank account it chooses: its own non-reporting lobbying account or CAIR Foundation’s 501(c)(3) charitable tax deductible bank account. CAIR can then move the money to CAIR Foundation with no reporting requirements.

“According to both the letter and spirit of the law, this is illegal as CAIR is avoiding disclosure of foreign sources of funding to a 501(c)3 (CAIR-F),” Reaboi explained to TheDC.

The nature of the non-profit scheme is so convoluted even CAIR’s leadership is confused. Under oath in a lawsuit deposition, Awad, the organization’s executive director, described CAIR’s two organizations as one and the same, was unable to make a distinction between the two and even misrepresented his own role in the group. Awad states that he’s “not privy to the exact distinction between the various organizations.”

Q. Now, we talked a little bit earlier about CAIR Action Network and CAIR Foundation, correct?
Awad: Yes.
Q. And you had some idea about the distinction between those two entities. Would you tell me what you understand to be the difference between those two entities?
Awad: No, I cannot tell you exactly.
Q. Do you serve in any official capacity for CAIR Action Network?
Awad: I think I’m a board member.
Q. A board member.  Are you executive director or an officer of that company?
Awad:  I’m executive director of CAIR Foundation.
Q. So you serve as the executive director of CAIR Inc. and of CAIR Foundation?
Awad: CAIR Foundation.
Q. Did you not testify earlier that you serve as the executive director of CAIR Inc.?
Awad: No, I said CAIR Foundation.
Q. Okay. So again, looking—
Awad: I told you that—are you done?
Q. Please.
Awad: The names have changed over the years. And I’m not privy to the exact distinction between the various organizations. I serve in my capacity as executive director of CAIR Foundation.  And I have a good understanding of what this organization is.
Q. I didn’t hear the last part.
Awad: I have a good idea of that organization, what that represents, and my capacity in that organization.
Q. I direct your attention again to the first page of CSP Depo Exhibit 5. And we are talking about the Council on American-Islamic Relations, Inc. Form 1120 2010 filing. Do you see that?
Awad: This one?
Q. Yes.
Awad: Yes.
Q. And I asked you if you were the executive director of this organization. And your answer was yes. Is your answer now that you are not the executive director of the Council on American-Islamic Relations Inc.?
Awad: Okay. I think you’re confusing me.

CAIR’s claim to represent American Muslims is contradicted by its falling membership and donations. While the group claimed “some 50,000 members” in 2007, the Washington Times showed that CAIR’s membership plummeted from a 2000 high of 29,000 to only 1,700 in 2006.  Based on its IRS 990s from 2004 to 2006, CAIR’s reported membership revenue from American Muslims plunged from $119,029 in 2004 to $41,383 in 2006. This accounts for only 1 percent of the group’s funding from that year.

Even as its grassroots base continued to erode, CAIR’s revenue was increasing. The website CAIRObservatory chronicles its significant contributions from foreign donors, embassies and governments.

For years, CAIR has made conflicting statements about its overseas sources of funding. In a press release issued after the 9/11 terrorist attacks, it asserted: “We do not support directly or indirectly or receive support from any overseas group or government.”

By January 2009, however, CAIR claimed, “there is nothing criminal or immoral about accepting donations from foreign nationals… The U.S. government, corporations and non-profit organizations routinely receive money from foreign nationals.”

According to an attachment to the foundation’s Form 1023, the government of Qatar has given  $405,000 over a 5 year period. This figure doesn’t include the foreign money that could come in through the lobbying arm, CAIR-AN, which has given $1,080,000 during that same period. These donors include:

Embassy of the UAE – $219,563
Kingdom Holding Company, Saudi Arabia – $199,980
National Bank of Fujairah, UAE – $100,000
Red Crescent, Abu Dhabi, UAE – $99,985
Bin Hammodah Properties, Abu Dhabi UAE – $44,985

Although the group has sometimes drawn congressional scrutiny, successive presidential administrations have stopped short of moving against CAIR.

In June of 2011, Rep. Frank Wolf, a Virginia Republican, asked the IRS to investigate whether CAIR has received or solicited funds from foreign governments.

Wolf was especially concerned about CAIR Executive Director Nihad Awad’s letter to Libyan dictator Muammar Gaddafi, which solicited money and praised the dictator. Wolf also asked the IRS if it is aware that Awad tried to solicit funds from Sudanese President Omar Hassan Bashir, who has been indicted internationally as a war criminal.

The IRS did not do an investigation.

According to the documents, CAIR received at least $2,792,203 in contributions, income and money from foreign principals in the form of 11 distinct transactions, including a $2,106,251 mortgage loan from a foreign principal for CAIR’s Washington, D.C. headquarters and at least $54,500,000 in pledges from foreign principals.

CAIR has met and coordinated with foreign principals on at least 35 occasions and engaged in more than 100 political influence operations on behalf of foreign principals in the United States.

CAIR did not respond to requests for comment.

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