Regulator probes charities' terrorism links

Issues being investigated by the regulator include charitable links to terrorist organisations and terrorist financing.

The ACNC confirmed that between 7 October 2023 (the beginning of the current conflict) and 30 September 2024, 146 concerns were raised with it about 26 charities broadly associated with the war between Israel and the Iranian-backed militant group Hamas.

Under questioning from Senator Dean Smith in a Senate Estimates hearing last week, ACNC assistant commissioner and general counsel Natasha Sekulic, said 11 of the concerns were related to links to terrorist organisations or activities associated with terrorist financing.

“We have proceeded to investigate eight organisations – five are ongoing and three have been finalised,” she said.

The regulator confirmed no charities have had their registration revoked because of the investigations.

Senator Smith said he wrote to ACNC commissioner Sue Woodward last week asking for an update on data provided to him by the regulator in June 2024 relating to terrorist links to Australian charities.

Asked if she could provide the update in the Senate hearing, Sekulic confirmed the number of terrorism-related concerns had increased from 51 in the original advice sent to Senator Smith on June 24 to 146.

The number of charities affected had increased from 18 to 26.

Sekulic said it was possible multiple concerns related to one or more charities.

She indicated the rise in terrorism-related concerns did not catch the regulator off guard.

“Terrorism and terrorism financing is an established priority area for the ACNC with regards to our compliance priorities,” said Sekulic.

“So, we already had protocols in place prior to the [Gaza] conflict arising.”

Though unable to go into detail about the investigations, Sekulic did shed light on how the ACNC approaches them.

“When we are looking at triaging and determining which complaints will proceed to investigation, we use a range of intelligence that might come from other agencies,” she said.

“It can stem from the media, it can come from those concerns, and it can also come from referrals from other agencies.

“So, we triage to determine whether there is substance to the complaint and then we may proceed to investigate.”

Sekulic pointed out, however, that the ACNC’s investigative powers are limited.

“We regulate charities; we are not a law enforcement agency,” she said.

“We can’t pull back funds if they are sent offshore, so it’s really important that we work holistically across government and determine who is the best placed regulator [to investigate].”

Sekulic said the ACNC, worked closely with other agencies including the Australian Federal Police, AUSTRAC, and the Department of Foreign Affairs and Trade (DFAT) on major issues.

The regulator also liaised with bodies such as state police forces and consumer protection agencies.

“We do have a number of memorandum of understating’s in place with other agencies that help us share information and it might be that a particular organisation might be the best placed to take the lead on an investigation,” said Sekulic.

“That doesn’t mean the ACNC won’t still conduct its own investigation, but it will do it in parallel because we don’t want to jeopardise say, the action of the AFP.”

Sekulic said no registered charities had been investigated by the ACNC because of concerns over involvement in or links to, antisemitic activities.

The ACNC has the power to act in response to concerns raised about charities where it considers there is a serious risk to public trust and confidence in the sector and they relate to a charity’s compliance with requirements under the ACNC Act.

However, it is prevented by law from revealing details of its investigations.

The Federal Government announced a suite of reforms in the 2023–24 Budget designed to increase transparency and accountability in the charity sector.

They included legislative changes to the ACNC Act designed to lift the veil of secrecy that prevents the regulator from disclosing details of investigations into charities.

The changes would allow Commissioner Sue Woodward to disclose:

• information about the existence of an ongoing investigation into a charity where disclosure was necessary to prevent public harm

• finalised compliance investigations that did not result in formal compliance action, where disclosure was in the public interest

• summary reasons for revocation of a charity’s registration.

In December 2023, Charities Minister Andrew Leigh said existing legislation would be amended to allow the regulator to discuss ongoing investigations where necessary to maintain trust and confidence in the sector.

“The risk of the current laws is that if the regulator is muzzled from speaking out under any circumstances, it undermines trust and confidence in the sector,” he said in a speech to federal parliament.

“Our reforms will mean that – subject to a public harm test – the regulator can disclose that it is investigating allegations of misconduct.”

More information

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ACNC takes first step toward greater transparency