updated 8/24/2006 3:37:12 PM ET 2006-08-24T19:37:12

A federal appeals court Thursday upheld the president's authority to regulate financial transactions with foreign countries during a security crisis and rejected a challenge by a man prosecuted for sending $100,000 into Iraq.

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The 2nd U.S. Circuit Court of Appeals said the first President Bush made proper use of the International Emergency Economic Powers Act after Iraq invaded Kuwait in August 1990.

The court rejected a claim that invoking the act unfairly let the president create new criminal offenses that should only be authorized by Congress.

In an opinion explaining their decision, the judges said Congress has the authority to delegate some of its power to the president, especially in matters of foreign affairs, and noted that in a similar case, the Supreme Court upheld the president's power to criminalize the sale of weapons to certain countries.

As part of enforcing a series of executive orders in 1990, the Office of Foreign Assets Control announced that no U.S. person could transfer funds directly or indirectly to the Iraqi government or to anyone in Iraq.

Guilty plea with reservations
Osameh Al Wahaidy, a Jordanian man, ran afoul of the orders when he sent a total of $100,000 to Iraq in October and November 1999 and in February 2000, the appeals court said.

He pleaded guilty in 2003 to charges that he had willfully tried to violate and evade the executive orders but he preserved his right to challenge the statute's constitutionality. He was sentenced last year to 100 hours of community service and two years probation.

In a statement at sentencing before a federal judge in Syracuse, Al Wahaidy said he sent the money to Help the Needy, a Syracuse-area charity that claimed it was for Iraqi orphans and poor children. However, the appeals court wrote that the funds were being used by Iraqi "agents" for a series of undisclosed projects.

A lawyer for Al Wahaidy did not immediately return a telephone message for comment.

Lauren McDonough, a government spokeswoman, said she had no immediate comment on the ruling.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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