Biden administration officials are divided over what to do with $687 million in assets seized from a French company after it admitted to aiding terrorist groups including the Islamic State, according to people familiar with the matter.
The dispute pitted the State Department against the Justice Department and raised a host of legal, ethical and policy questions about the financial implications of executive branch officials handling vast sums of money that did not go through the normal process of Congress appropriating them for specific purposes.
At issue is whether the government can or should allocate some of the funds to help ISIS’s international victims, most of whom remain in Syria or have become refugees elsewhere in the Middle East.
To complicate matters further, a group of ISIS victims currently living in the United States also want a share of the assets. represent Amal Clooney, a famous human rights lawyer, is the husband of actor George Clooney. Helping raise money for Biden’s re-election campaignand former Biden administration official Lee Wolosky.
The huge compensation involved comes from the first company to be prosecuted for conspiracy to provide material support to a terrorist organization. In 2022, French building materials giant Lafarge Confession and paid bribes to ISIS and another Syrian terrorist group, the Nusra Front, in 2013 and 2014 to ensure it could continue to operate a factory in the region.
When the Syrian civil war broke out, Lafarge had just built an expensive cement plant in the north of the country. Officials at the company struck an unusual deal with the militant group. Court documents sayPart of the reason is to be able to profit from Syria’s reconstruction needs after the war ends.
As part of the plea agreement, Lafarge’s successor company – which has since merge and Swiss company Holcim — paid a $91 million criminal fine and forfeited $687 million in assets.
Administration officials have not made any decisions, according to six people familiar with the matter, most of whom requested anonymity to discuss sensitive internal deliberations. But the White House and the National Security Council recently began asking tough questions about the dispute, exacerbating internal conflict, according to the people.
The Justice Department and State Department declined to comment.
After the company returns the assets, the government deposits them into a Justice Department account to cover its costs of trying to seize criminals’ ill-gotten gains. Congress sometimes takes extra money out of that account, so much of it is likely to end up in the U.S. Treasury.
But some advocates argue that at least some of the money should be used to help international victims and survivors of Islamic State atrocities. Last month, a coalition of civil society groups and think tanks, including members of the Atlantic Council, urged Attorney General Merrick B. Garland to consider that approach. Increase the likelihood In an open letter.
Within the Biden administration, the State Department has also advocated for some of the money to be used to set up an international fund for ISIS victims. The effort is said to be led by Beth Van Schaak, U.S. Ambassador-at-Large for Global Criminal Justice, and approved by Secretary of State Antony Blinken.
But Justice Department officials have expressed skepticism about the executive branch’s legal authority to unilaterally decide how to spend vast sums of money, even for a good cause. Under the Constitution, Congress exercises power of the purse by deciding how to appropriate funds and also sets limits on how money raised from asset forfeiture can be used.
Under federal law, the attorney general has some discretion to transfer some of the seized assets to foreign governments that cooperate in investigating such cases. The Justice Department plans to eventually give France about $200 million, but because France An investigation into the company is ongoing.
Federal law and regulations allow the Justice Department to use seized assets to compensate victims who have been connected to the crimes and suffered “economic loss” — such as seizing assets from embezzlers and returning the money to the victims.
The forfeiture statute also vaguely provides that the attorney general has the authority to “take any other action to protect the rights of innocent persons if such action is consistent with the interests of justice and not inconsistent with other parts of the statute.”
But the Justice Department’s authority to decide what to do with seized assets generally does not extend to providing compensation for other types of wrongdoing, such as physical assaults without associated financial losses.
It is not clear whether the law that allows the attorney general to send money to foreign countries assisting in investigations provides a workaround for those restrictions. For example, this year the Justice Department announced it would forfeit about $500,000 in assets from a sanctions-violating shipment of military equipment to Russia to aid victims of the Russian invasion of Ukraine.
department Acknowledged in press release The Justice Department said it couldn’t transfer the funds directly to Ukraine, but Deputy Attorney General Lisa O’Monaco praised what she called a “creative” legal solution: Because Estonia helped with the investigation, the Justice Department could legally transfer the seized assets to the Ukrainian government. Estonia agreed to use the money to help Ukrainians rebuild their homes.
The letter from the coalition of civil society groups suggests the same strategy — in this case, on a much larger scale. Whether this is realistic, however, is far from certain. The Ukraine issue involves only $500,000, not $500 million. And it is unclear whether French law would allow the French executive to unilaterally spend so much money on overseas causes.
A French official, who spoke on condition of anonymity to discuss a sensitive topic, said that because the French government has not yet received any of the assets seized by the United States, it has not yet decided how to distribute them.
Another unresolved question is who counts as a victim. The Justice Department has apparently adopted a narrow interpretation that people killed or tortured by ISIS are not considered victims of Lafarge’s crimes because their injuries were mitigated by the company’s expenses to keep the plant open.
The broader interpretation is that Lafarge payments helped ISIS finance its occupation of parts of Syria and Iraq, so all victims should be considered connected to the case. Those who hold this view include Ms. Clooney and Mr. Wolosky, who have also applied to the Justice Department for some of the funds on behalf of their clients.
Ms. Clooney and Mr. Woloski There are about 400 Yazidis in totalThey are a Kurdish-speaking religious and ethnic minority in Syria who were persecuted during the Islamic State’s genocide a decade ago. They were resettled in the United States, mostly in Nebraska.
Mr. Wolosky also separately represents approximately 23 plaintiffs, including American soldiers injured and family members of soldiers killed in ISIS attacks while deployed in the Middle East. directly Prosecution company.
Mr. Woloski, speaking for himself and Ms. Clooney, said some of the money already seized by the U.S. government should be used to compensate ISIS victims in the United States.
“The government collected nearly $1 billion and never notified the victims, including the families of fallen American soldiers, as required, nor paid a penny to the victims,” Wolosky said in a statement. “This is not right.”
The two lawyers reportedly met with the department’s acting head, Molly Moeser, last month. Money Laundering and Asset Recovery Sectionand wrote directly to Mr. Garland.
Mr. Wolosky said he and Ms. Clooney planned to sue the government if their clients did not get their share of the money.
