PayPal has frozen the account of a group that has been raising money for the legal defense of accused WikiLeaks source Bradley Manning, citing a failure to meet PayPal’s requirement for nonprofit groups.
According to Courage to Resist, a military veterans advocacy group that has been raising donations for Manning’s defense, PayPal froze the account after the group refused to link its PayPal account to its checking account, which would give the online payment provider access to funds in the checking account.
“We exchanged numerous e-mails and phone calls with the legal department and the office of executive escalations of PayPal,” said Jeff Paterson in a press release. “They said they would not unrestrict our account unless we authorized PayPal to withdraw funds from our organization’s checking account by default. Our accounting does not allow for this type of direct access by a third party, nor do I trust PayPal as a business entity with this responsibility given their punitive actions against WikiLeaks — an entity not charged with any crime by any government on Earth.”
The advocacy group has been raising funds for the Manning Support Network and has so far paid Manning’s defense attorney at least $50,000 from money that it raised on the soldier’s behalf. Paterson did not respond to a call for comment, but said in the press release that his group opened the PayPal account in 2006.
A spokesman for PayPal took issue with how the advocacy group has characterized the matter, saying this was not about Courage to Resist’s support for Manning. Company policy requires all nonprofit organizations with 501(c)3 status [.pdf] to link their PayPal account to a bank account. That provides a clear audit trail if the IRS or other government agency ever raises questions about an organization’s non-profit status.
“It’s pretty normal practice to be honest,” said PayPal spokesman Anuj Nayar. “It doesn’t normally cause the issues that it has caused in this case. We were very surprised to see the press release.”
He acknowledges that linking to the account allows PayPal to withdraw funds from the bank account as well, but said this is never done without authorization and is generally done only when PayPal has determined that a merchant or organization is engaged in fraud.
He added that the frozen account was not specifically a Bradley Manning legal defense account.
“The release makes it very much sound like they have a legal defense fund connected to PayPal and that’s what we’ve turned off,” Nayar said. “But there is no PayPal account for a Manning legal defense fund. It’s a Courage to Resist account.”
Asked why, if the Courage to Resist account was opened in 2006, PayPal hadn’t raised the issue of linking it to a bank account earlier, Nayar did not have an immediate response. He said only that nonprofit organizations are allowed to open accounts easily and quickly.
“We don’t limit them prior to opening and saying they’re a nonprofit before allowing them to open an account,” he said.
With regard to PayPal’s assertion that it’s only following company policy, Courage to Resist says it repeatedly requested and was refused formal documentation from PayPal describing its policy.
“They opted to apply an exceptional hurdle for us to clear in order to continue as a customer, whereas we have clearly provided the legally required information and verification,” the group wrote.
Manning’s defense is expected to cost about $115,000. In addition to the funds raised by Courage to Resist, WikiLeaks — after a protracted delay — contributed $15,100 to Manning’s defense in January.
Last December, PayPal froze the account of the Germany-based Wau Holland foundation, which manages the bulk of donations to WikiLeaks. PayPal asserted at the time that WikiLeaks was in violation of its terms of service.
“PayPal has permanently restricted the account used by WikiLeaks due to a violation of the PayPal Acceptable Use Policy, which states that our payment service cannot be used for any activities that encourage, promote, facilitate or instruct others to engage in illegal activity,” read a statement on PayPal’s website. “We’ve notified the account holder of this action.”
PayPal didn’t indicate the nature of the illegal activity that WikiLeaks allegedly promoted, but the move against WikiLeaks came after the site began publishing 250,000 State Department cables believe to have been obtained from Manning during the time he worked as an Army intelligence analyst in Iraq. Manning was arrested last May and is currently in custody at the U.S. Marine Corps’ brig in Quantico, Virginia, awaiting a hearing in his case.
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