Cage, the Islamic-focused human rights organisation that had its bank accounts closed earlier this year, has lodged a formal complaint with the financial ombudsman after spending the past five months operating using only cash.
In its letter of complaint, the organisation, which works with communities affected by the war on terror and is one of a number of Muslim pressure groups and charities to have had their accounts withdrawn by various banks in recent months, said it "has only been able to pay its employees and its landlord with great difficulty", "has not been able to carry out many of its day-to-day activities" and has "considered the prospect of closing down".
London-based Cage had its accounts with Barclays and the Co-operative Bank – and those of several of its board members – closed several weeks after Moazzam Begg, who is still its director of outreach, was arrested on suspicion of terrorism offences linked to Syria in February.
Begg was freed from prison last week after seven terrorism-related charges against him were dropped.
Amandla Thomas-Johnson, a spokesman for Cage, told Third Sector the organisation contacted the ombudsman as a last resort after its attempts to convince the Treasury to persuade Barclays and the Co-op to reverse their decisions failed.
He said Cage had not been able to find another UK-based bank willing to offer it an account and had been forced to operate in cash, rendering it impossible for donations from direct-debit supporters and even a major donor, the Joseph Rowntree Charitable Trust, to reach Cage.
"We see this as the government targeting us," said Thomas-Johnson. "The banks said they closed our accounts because of our connection to Moazzam Begg. Begg’s name has now been cleared. We’ve been told by the Treasury that this should not have happened to us and that there’s nothing to suggest we are in any way involved in untoward activity."
He added: "Banks are always taking risks. They don’t know the life story of everyone they give a bank account to. I don’t see why our organisation – and other Muslim organisations – should be targeted. It’s a suspicion against Islamic organisations and this is Islamophobia."
Earlier this year, Cage accused the Charity Commission of institutional bias against Muslim organisations. This was strongly denied by the regulator.
The commission opened monitoring cases last year – which are still ongoing – into the Joseph Rowntree Charitable Trust and the Roddick Foundation over the funding they were giving Cage.
Cage is one of several Islamic organisations to have had their accounts closed this year. In July, HSBC informed the international aid charity the Ummah Welfare Trust, the Finsbury Park Mosque and the Cordoba Foundation, a non-charitable think tank on Islamic issues, that it would be closing their accounts. The Muslim Association of Britain also opened an account with HSBC earlier this year, but it was closed by the bank three days later; and Helping Households Under Great Stress had its account frozen in July.
- This article was corrected on 14 October 2014. It originally said that the bank account closures had made it impossible for donations from the Roddick Foundation to reach Cage. Cage said before publication that this was the case, but has since said that all the foundation's grants to Cage had been paid by the time the accounts were closed.