This is a bizarre development indeed:

Federal prosecutors Thursday took steps to seize four U.S. mosques and a Fifth Avenue skyscraper owned by a nonprofit Muslim organization long suspected of being secretly controlled by the Iranian government.

In what could prove to be one of the biggest counterterrorism seizures in U.S. history, prosecutors filed a civil complaint in federal court seeking the forfeiture of more than $500 million in assets of the Alavi Foundation and an alleged front company.

The assets include Islamic centers in New York City, Maryland, California and Houston, more than 100 acres in Virginia, and a 36-story office tower in New York.

(…)

Prosecutors said the Alavi Foundation, through a front company known as Assa Corp., illegally funneled millions in rental income back to Iran’s state-owned Bank Melli. Bank Melli has been accused by a U.S. Treasury official of providing support for Iran’s nuclear program, and it is illegal in the United States to do business with the bank.

Government officials have long suspected the foundation was an arm of the Iranian government; a 97-page complaint details involvement of several top officials in foundation business, including the country’s deputy prime minister and ambassadors to the United Nations.

”For two decades, the Alavi Foundation’s affairs have been directed by various Iranian officials, including Iranian ambassadors to the United Nations, in violation of a series of American laws,” U.S. Attorney Preet Bharara said in a statement.

The problem I have with this is the conflation of Iran’s nuclear program with “terrorism”. In what sense is this a counter-terror action? As the article points out, these properties are in active use by the Shi’a muslim community, so regardless of where the ultimate money flows, these aren’t pure terrorist front operations but genuine community resources. The basic argument here is that the skyscraper generates rental income, and some of that money goes to Iran. But most of it stays right here in the US:

The sleek, modern building, last valued at $570 million to $650 million in 2007, has served as an important source of income for the foundation over the past 36 years. The most recent tax records show the foundation earned $4.5 million from rents in 2007.

Rents collected from the building help fund the centers and other ventures, such as sending educational literature to imprisoned Muslims in the U.S. The foundation has also invested in dozens of mosques around the country and supported Iranian academics at prominent universities.

If federal prosecutors seize the skyscraper, the Alavi Foundation would have almost no way to continue supporting the Islamic centers, which house schools and mosques. That could leave a major void in Shiite communities, and hard feelings toward the FBI.

The Obama Administration better have an airtight case here to justify this. I’m reserving judgement for now but this opens up a huge pile of questions and issues. Naturally, if these weren’t Iranians but say, an Israeli company taking the income to fund settlements in teh West Bank, the Odministration would not have dared.

Thin ice, Mr. President. At the very least, you just erased the Cairo speech from the pages of history. It better be worth it. We’re watching.