US Congress continues to expand legislative action to address antisemitism. What began in the House of Representatives Committee on Education and the Workforce has expanded to a House-wide effort to combat antisemitism and related issues with wide-ranging implications for education, finance, and nonprofit entities.
TIMELINE OF CONGRESSIONAL ACTION ON ANTISEMITISM
The House Committee on Education and the Workforce antisemitism hearings began in November 2023. The hearings focused on educational institutions, with testimony from experts, school administrators, and student representatives. Since then, the congressional inquiry has grown to involve nonprofits that fund or are otherwise connected to recent campus protests and the financial institutions that serve the educational institutions and nonprofits involved.
- On April 24, 2024, the House Ways and Means Committee sent a letter to Internal Revenue Service (IRS) Commissioner Daniel Werfel. The letter raised concerns about the influence of foreign adversaries on US tax-exempt organizations and referenced their involvement in “a series of massive antisemitic events.” The letter requested information from the IRS about whether such organizations are operating within the protocols required for tax-exempt status, among other information.
- On April 30, 2024, House Speaker Mike Johnson announced his intent to expand the Committee on Education and the Workforce investigation across numerous committees, including Energy and Commerce; Oversight; Judiciary; Ways and Means; and Science Space, and Technology. These committees plan to address the student visas of foreign protest participants, university research grants, university tax-exempt status, university foreign funding and gifts, and protest group funding among other issues.
- On May 1, 2024, the House passed the Antisemitism Awareness Act (HR 6090). The bill would require the US Department of Education to use the International Holocaust Remembrance Alliance’s working definition of antisemitism when enforcing Title VI of the Civil Rights Act of 1964: “Antisemitism is a certain perception of Jews, which may be expressed as hatred toward Jews. Rhetorical and physical manifestations of antisemitism are directed toward Jewish or non-Jewish individuals and/or their property, toward Jewish community institutions and religious facilities.” Under this definition, a Title VI violation may occur where action is taken based on an individual’s actual or perceived Jewish ancestry or Jewish ethnic characteristics. The US Department of Education’s Title VI investigations are limited to educational institutions that receive federal financial assistance. HR 6090 does not apply to private sector employers.
- On May 14, 2024, the House Committee on Education and the Workforce and the House Committee on Oversight and Accountability issued a joint letter to Treasury Secretary Janet Yellen requesting Suspicious Activity Reports (SARs) for 20 nonprofits. A SAR is a document that financial institutions must file with the Financial Crimes Enforcement Network whenever there is a suspected case of money laundering or fraud. In the letter, the Committee advised that it is “considering potential legislation to strengthen federal transparency laws regarding foreign funding at institutions of higher education.” The Committees seek to “ensure that financial institutions have the proper internal controls and compliance programs to alert federal agencies of potential malign influence at these [education] institutions.” On May 17, 2024, 12 nonprofits responded to the joint letter. The response letter asks the committees to rescind the SARs requests on the grounds that the letter violates the First Amendment by improperly “investigating protected expressive activity.”
- On June 3, 2024, six House committees issued letters to 10 universities that detail the committees’ intent to investigate the use of federal funds at the universities in part to ensure “that universities receiving federal funds are fostering and maintaining an environment free from harassment and discrimination.”
- On June 7, 2024, the Education and Workforce Committee Chairwoman Virginia Foxx (R-NC) sent a letter to Northwestern University criticizing its congressional response to date and threatening to issue a subpoena. Although there is no legal obligation for an entity to comply with a congressional committee letter, it is generally in the entity’s best interest to do so. The ability to respond to an informal request allows a respondent to convey its knowledge and opinions on the topic to the committee staff early on. Early cooperation also decreases the risk that members will publicly attack the entity for noncompliance. Once a congressional committee issues a subpoena, the response is mandatory. If an entity fails to respond to a subpoena, Congress may pass a resolution of noncompliance and ultimately, hold the entity in contempt.
These letters, taken together, exemplify the heightened political environment in Washington, DC. Given the number of committees involved, it is likely that antisemitism will remain at the forefront of congressional attention through the 2024 elections. The broadened antisemitism investigation makes clear that the House is focused on funding as a key subject. This includes where educational institution and nonprofit funding comes from and how it is used. By necessity, these topics involve financial institutions as the recordkeepers of the information. As a result, educational institutions, nonprofits, and financial institutions should be mindful that their organization may be subject to congressional inquiry.
STRATEGIC CONSIDERATIONS FOR A CONGRESSIONAL RESPONSE
Recipients of congressional inquiries should coordinate with counsel that has congressional expertise to prepare a response. Congressional actions are distinct from judicial proceedings and include unique legal, political, and media considerations.
Responding to a congressional inquiry requires close coordination among legal, government relations, and communications teams. As early as practicable, entities should develop a proactive dialogue with the appropriate committee staff through their counsel. In addition, entities should create a communications response strategy to ensure consistent internal and external messaging.
Entities should also form a fact-gathering team to be best positioned to promptly respond to evolving congressional requests. Entity counsel may engage with committee staff to negotiate the availability of legal privileges, the confidentiality of information, and the scope of information requests.
Congress may also request or compel individuals to testify at a public hearing. Congressional hearings can quickly become headline news and make available a forum for members themselves to publicly express their views on policy, social and investigatory issues. In some instances, the committee may release a preliminary report of findings prior to the hearing. Entity counsel may negotiate who will testify and the scope of testimony.
When testifying before Congress, witnesses should keep in mind that it may not be possible to “win” the hearing, particularly if the issue is controversial. Members of Congress will often ask straightforward questions about complex issues that require nuanced answers.
An entity’s legal, government relations, and communications teams will determine the tailored approach that a witness should take to particular questions and sensitive topics.
Lawyers at Morgan Lewis are monitoring the congressional actions closely and are prepared to advise clients of the potential impact.