The People's Mujahedeen Organization of Iran first received the terrorist designation 15 years ago. But the organization maintains that it ended a military campaign against Iran, surrendered its arms to U.S. forces in Iraq and shared intelligence with the U.S. government on Iran's nuclear program.
A three-member panel of the U.S. Court of Appeals for the District of Columbia Circuit said Clinton has been slow in providing the group with material it needs to respond to the terrorist designation and gave her a deadline to take final action.
The group has had some prominent supporters, including ex-FBI Director Louis Freeh and retired Army Gen. Hugh Shelton, a former chairman of the Joint Chiefs of Staff. The Treasury Department is conducting an investigation into the source of the group's funds.
In 2010, the appeals court directed Clinton to provide the organization with material relied on by Secretary of State Condoleezza Rice in January 2009 denying the group's request that the terrorist designation be removed.
"Since our July 2010 remand, the secretary's progress has been—to say the least—slow," the appeals court said. "We have been given no sufficient reason why the secretary, in the last 600 days, has not been able to make a decision which the Congress gave her only 180 days to make" under the Antiterrorism and Effective Death Penalty Act.
If the secretary fails to take action within four months, the court will grant the request to set aside the terrorist designation, the ruling declared.
The appeals judges on the case were Karen LeCraft Henderson, an appointee of President George H.W. Bush; David Tatel, an appointee of President Bill Clinton; and Stephen Williams, an appointee of President Ronald Reagan.
The group's president-elect, Maryam Rajavi, said the terrorist label is "illegitimate" and has acted as "the greatest factor in preserving the rule of the murderous mullah regime in Iran while causing two massacres at Camp Ashraf" in Iraq where members of the group were living.