YES! “SHE” SPEAKS

Flabbergasted?

Lloyds TSB in charity account row

with 8 comments

 interpal3

Lloyds TSB’s decision to withdraw its clearing services for the accounts of Interpal, a British charity which sends humanitarian aid to Palestinians has prompted a series of protests alongside a barrage of public complaints. Lloyds TSB has now changed its tune as more protestors have questioned the decision, though one question remains unanswered , why have Lloyds TSB have ceased all operations with Interpal? Magda Ali investigates.

Interpal, the largest UK Palestinian relief charity, which has since 1994 been supporting charity projects in the Occupied Palestinian Territories and the refugee camps of Jordan and Lebanon, may be a month or less away from closure. A series of protests by British human rights activists have been calling for Lloyds TSB to reverse its decision. A spokeswoman for Interpal said the Scottish Palestinian Solidarity Campaign staged a demonstration outside Lloyds TSB in Edinburgh’s Hanover Street last week, and Islamic student group FOSIS had launched a petition that had so far attracted 700 signatures. One of the protestors said: Demonstrations outside every Lloyds TSB branch may be a good thing, to raise awareness and embarrass them.” The Muslim Council of Britain (MCB) has written to Lloyds TSB deploring an action that places what the Secretary General, Dr. Muhammad Abdul Bari calls “the most respected charity” in limbo.

Interpal, also known as the Palestinian Relief and Development Fund, has accounts with the Islamic Bank of Britain (IBB) but its Islamic bankers rely on Lloyds TSB for its clearing services. Lloyds TSB is one of 4 clearing banks in the UK and are responsible for the processing of all financial transactions for IBB. The charity was notified on the 12th November that the Islamic Bank of Britain had been told by a letter from Lloyds TSB to cease all dealings with the British charity that use Lloyds TSB services. In effect, this would make the account inoperable, a move intended to come into effect on the 8th December 2008, on Eidul Adha, o6ne of the largest Islamic festivals, ironically, a time when Muslims are encouraged to give charity.

Lloyds TSB gave a verbal extension to the Islamic Bank until January 30, 2009, but cancelled this a few days later. Interpal now has little time left to find alternative banking arrangements. According to the charity, they have been told by IBB that after this time “all transactions into or out of Interpal accounts will be blocked and IBB will be at further risk of all its customer payments being suspended.”

Interpal has been investigated a number of times by the Charity Commission after a series of damaging allegations that the charity was funding terrorism through Hamas, the de facto government in the Gaza Strip. Just two years, due to a court case in New York, Interpal’s previous bank, NatWest, closed its accounts, setting a dangerous precedent for British charities and their work. The first two investigations by the Charity Commission, which concluded in 1996 and 2003, found no evidence of any wrongdoing by the charity, which has never been found guilty of any illegal activity in the UK, although it is on a list of “specially designated global terrorist entities” in the United States. It is this, Interpal believes, that has prompted the Lloyds TSB decision as the bank has extensive US operations. The Chairman of Interpal’s Board of Trustees, Ibrahim Hewitt, said, “Interpal has been at the receiving end of a relentless campaign by political forces that want humanitarian efforts for Palestinians to cease.” He believes that unfounded allegations of an illegal use of funds has led to foreign governments setting out hoops through which British banks have to jump, even though his charity has never intentionally done anything illegal.

Exactly two years ago, following a BBC Panorama programme broadcast in July 2006, which raised some serious concerns, the Charity Commission once again opened an inquiry under section 8 of the Charities Act 1993. The Inquiry team are yet to publish their findings. The reasons for the new investigation may be many and of complex origin, but it is all very uncertain. A spokeswoman for the Commission said a report was expected soon. Jo Moir, press officer of the Charity Commission said: “We recognise that charities often deliver essential services in areas where the need is greatest, and it is clear that there is a real need for humanitarian aid to reach people in the Palestinian Territories.”

“We are discussing the potential implications for Interpal’s charitable work with its trustees, and will provide then with any appropriate advice and guidance.”

The British Overseas NGOs for Development (BOND) have been providing support to Interpal as part of their role in ‘strengthening the quality and effectiveness of UK-based international development organisations.’ They have also been working closely with the Charity Commission in developing its counter-terrorism strategy and guidance. Clare Palmer, BOND’s Sector Advocacy officer said: “There is no doubt that the assets of registered charities need to be protected from potential abuse by terrorist groups.” She added: “However, BOND is also determined that legitimate humanitarian work should be able to continue – indeed, it plays a crucial role in counteracting a rise in extremism which can fuel the appeal of terrorist organisations.”

While Lloyds TSB refuses to comment on the specifics of the case, the bank has been at pains to deny allegations that the high street bank directed IBB to cease its operations with Interpal. Lloyds TSB’s Media Relations manager, Eleanor Ross says: “Lloyds would not direct nor would it be appropriate for us, to direct another institution on how to deal with its own customers.”

However, the original letter sent by Lloyds TSB to the Islamic Bank of Britain appears to contradict Ms. Ross’s claims: “We do not wish you to transfer, receive, process or in any way deal with any funds or in any way whatsoever be involved with any type of banking arrangements for Interpal which either uses or involves any products or services provided by us.” Most commentators agree that this is a fairly explicit “direction” by Lloyds TSB to “another institution”. Interpal’s chairman called Lloyds TSB’s claim “cynical semantics” in a letter to the Times newspaper.

“Clearly something doesn’t add up,” said a spokesman for the Muslim Public Affairs Committee (MPAC). He argues that this has very little to do with customer care: “It seems that Lloyds TSB have learnt nothing from the current credit crisis and are trying to mislead the public.” He added: “Lloyd’s decision appears to be entirely political and not based on any charges or evidence laid at the feet of Interpal. In fact, all charges thus far alleged against Interpal have remained unproven.”

In a previous statement, a spokesman for BOND argued that despite being cleared by the Charities Commission on several occasions, “Interpal remains on the US list, and has subsequently been listed by other countries including Australia and Canada, apparently as direct result of the US designation. Not only does there seem to be no evidence to support these governments’ decisions, but the process by which organizations end up on such lists and how they can be taken off a list remains unclear.”

Lloyds TSB’s decision is understood to have been influenced by the US designation of Interpal and pressure from other groups who claim that Interpal has links with terrorists. The MPAC website urges the Muslim community to complain and boycott Lloyds TSB to counter what the group believes is evidence of an “Israel lobby” which seeks to close down Interpal.

The Islamic Bank of Britain has offered its support to Interpal but is apparently powerless to prevent Lloyds TSB taking this step, even though Interpal believes the bank does not want to close its accounts. A spokeswoman for IBB said, “We can’t make any comment as this is of a confidential nature.” HM Treasury says that “this is a commercial matter for the Bank”, despite the evidence that makes it clear that it is a political decision which, according to Ibrahim Hewitt, requires a political solution. ”This goes beyond Interpal,” he added, “and actually undermines the whole autonomy of Islamic Banking and Finance in the UK.”

The British government wants to make London a world centre of Islamic banking and finance, and this episode has the potential to scupper such plans, persuading investors in the Middle East to look elsewhere for secure shari’ah compliant investments. Interpal chairman, Ibrahim Hewitt believes that a government solution to this problem is essential. “We shall have to wait and see,” he says. In the meantime, the clock is ticking for Interpal’s access to the banking system. “As one can imagine, this has the potential not only to damage Interpal but also affect community cohesion in Britain, as well as Middle East cohesion with Britain,” concluded Ibrahim Hewitt.

(Published: Muslim Weekly- 19/12/2008 )

Advertisements

Written by Magda M Ali

December 25, 2008 at 9:30 pm

Posted in Published pieces

8 Responses

Subscribe to comments with RSS.

  1. How absurd! Lloyd’s are completely out of hand. how do we get the latest updates on the situation?

    rendro

    January 1, 2009 at 10:58 pm

  2. Wait. Have interpal got their accounts back? I saw a emergency Gaza appeal on Islam Channel the otherday.

    :(

    January 2, 2009 at 3:55 am

  3. rendro- Interpal are still fighting, see the latest at http://www.interpal.info and no they haven’t got their account yet, deadline is still approaching, i assume.

    peace be with you and thanks for commenting.

    Magda.

    Magda M Ali

    January 2, 2009 at 10:36 pm

  4. how convinient for Israel hey? they will have killed at leasts thousands of gazans by the end of this month, and the one and only british charity, working in the occupied territories will have vanished.

    rendro

    January 5, 2009 at 11:50 pm

  5. I wrote an article some time back entitled Alhmadulillah for Llotds TSB (http://zakat.wordpress.com/2007/01/19/alhamdulillah-for-lloyds-tsb-bank/) on the Zakat Pages blog.

    This does show the futility of banking and paper money, and that the only way to be safe is to use tangible currency such as gold and silver. Then no bankers can devalue it overnight or freeze your accounts, they have to physically come and steal it, which would at least make it more of a level playing field.

    Amal Abdalhakim-Douglas

    January 16, 2009 at 8:14 am

  6. […] Lloyds TSB discard charity […]

  7. Peace Amal – I agree, I wrote a piece on the credit crunch, financial failure and had rev. peter challen and tarek diwany contribute to the piece. Not that old, so you’ll find it on the blog.Diwany has come forward with some interesting proposals for the gov, his book is also very insightful.

    Magda M Ali

    January 16, 2009 at 11:09 pm

  8. […] Lloyds TSB drop charity […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: