What could possibly go wrong?

“U.S. Stopped Blacklisting Domestic Terror Charities Under Obama,” by Eli Lake, Bloomberg, May 12, 2016 (thanks to Blazing Cat Fur):

The last time the federal government designated a U.S. charity as a front for terrorist fundraising, President Barack Obama had been in office for less than a month and Osama bin Laden was still at large. On Feb. 11, 2009, the Treasury Department designated the Tamil Foundation, a Maryland-based charity allegedly raising funds for the Tamil Tigers, a Sri Lankan foreign terrorist organization that today barely exists.

Since then, the Obama administration has overseen a financial war against Iran and targeted the oil revenue of the Islamic State. The Treasury Department has pressured banks to cut ties with terrorist fronts and worked closely with Gulf states to modernize financial systems and crack down on dodgy charities and other money launderers.

But the practice of blacklisting charities inside the U.S., a key tool of President George W. Bush’s war on terrorism, has come to a standstill under Obama.

Many experts and some members of Congress are beginning to ask why. Susan Phalen, the communications director for the House Homeland Security Committee told me this week that her committee was beginning to look into the issue. Jonathan Schanzer, a former terrorism finance analyst at Treasury, told me, “My understanding, based on conversations with several senior Treasury officials, is that this is no longer a Treasury function.”

Schanzer, who is now the vice president of research at the Foundation for the Defense of Democracies, added that Treasury’s Office of Terrorism and Financial Intelligence “sees itself as more of an global intelligence shop, leaving the domestic work to domestic agencies like the FBI.” He continued: “My concern is that the FBI may be overwhelmed with direct threats to the homeland, thereby relegating domestic terrorism-finance cases to a third- or fourth-tier priority. Is anyone taking the threat of domestic terrorism finance as seriously as the Treasury did back in its heyday? I don’t know.”

No Treasury official agreed to talk about this issue on the record. But a spokeswoman told me in a written statement that “there is no change in policy regarding designating U.S. persons that violate sanctions, and it is incorrect to claim that Treasury principals or staff have said otherwise.” The spokeswoman added that it remains a priority to take action to protect the U.S. financial system overseas and in the U.S.

And yet an examination of the Treasury’s own website that lists charities designated for terrorist fundraising shows a precipitous drop since Obama came into office. Between the Sept. 11, 2001, attacks and the February 2009 designation of the Tamil foundation, the U.S. designated eight major U.S.-based charities for terrorist fundraising. These included al-Qaeda fronts such as the U.S. branch of the al-Haramain Foundation and the Benevolence International Foundation. In this period, the U.S. government also blacklisted groups that raised money for the Palestinian terror group Hamas, including the Holy Land Foundation, and for the Lebanese militia and political party Hezbollah, like the Good Will Charitable Organization.

While the Obama administration has not designated any U.S. charities since its first month in office, it has nonetheless continued to squeeze not only al-Qaeda but also Hezbollah and Hamas. On Wednesday, Daniel Glaser, the assistant secretary of Treasury for terrorist financing, told the Foundation for the Defense of Democracies that his office has waged a campaign over the last five years to keep Hezbollah out of the international financial system….