Former federal prosecutor Thomas Melsheimer of Dallas said he was surprised by the outcome and thought the Justice Department should drop the case since it already had closed down the foundation.
"Look, the fact that a jury in a law-and-order state like Texas failed to convict a group of defendants that the government labeled as supporting terrorism is a stunning result," he said.
White House ties to the case date back to December 2001, when Bush used a Rose Garden news conference to announce executive action against Holy Land. He accused the foundation of raising money in the U.S. that "pays for murder abroad."
"The Holy Land Foundation claims that the money it solicits goes to care for needy Palestinians in the West Bank and Gaza," Bush said. Instead, he said, the funds were "used by Hamas to support schools and indoctrinate children to grow up to be suicide bombers" and to "recruit suicide bombers and to support their families."
Acting under authority of the International Emergency Economic Powers Act, Bush said the Treasury Department was freezing Holy Land's assets and seizing its offices.
"The message is this: Those who do business with terror will do no business within the United States or anywhere else the United States can reach," Bush said.
Holy Land officials, most of them American citizens, disavowed terrorism and denied any financial ties to Hamas or other violent groups. Their lawyers launched legal challenges to the executive order but failed to get an evidentiary hearing to rebut the government's underlying allegations.
In 2003 an appeals court ruled against the charity, citing "secret evidence" that defense lawyers said they never saw, nor ever had described to them. Finally, in March 2004, the U.S. Supreme Court refused without comment to hear the case.
A criminal indictment issued against Holy Land and five former officials in 2005 closely tracked allegations supporting the administration's 2001 seizure order. In both cases, the government cited wiretaps, anonymous FBI informants and Israeli intelligence to claim Hamas was the primary beneficiary of the charity's largesse.
"We have not alleged that Holy Land pulled the trigger or lit the fuse of a bomb," one Justice Department official said in an interview after the indictment was released.
"But they have facilitated those who pulled the trigger or lit the fuse."
Holy Land's alleged role became less direct by the time prosecutors went before a federal jury, however.
