"A government operating in the shadow of secrecy stands in complete opposition to the society envisioned by the framers of our Constitution," the 6th U.S. Circuit Court of Appeals said.
The case involves Rabih Haddad, a citizen of Lebanon who had been living in Ann Arbor, Mich., and has been detained on a visa violation since Dec. 14. That same day, the Treasury Department froze the bank accounts of his Global Relief Foundation and agents raided its office in the Chicago suburb of Bridgeview.
The government also is trying to deport Haddad's wife, Salma al-Rushaid, and three of their four children.
The Bush administration has said it suspects Global Relief of having ties to terrorism. No criminal charges have been filed against Haddad or the foundation, and both have denied any involvement with terrorism.
Federal officials sought a closed deportation hearing for Haddad on national security grounds, arguing that opening the session to the public and news media would help terrorists understand the government's strategy.
Ashcroft has argued that even releasing even the names of those arrested hurts the war on terror.
"We will not further provide a list to Osama bin Laden of all the individuals about whom he has an interest," Ashcroft said last November. "If he wants such a list he'll have to try to assemble it himself."
The government appeal had been opposed by lawyers for the American Civil Liberties Union, several newspapers and Rep. John Conyers, D-Mich. Haddad's trial was to have started Tuesday but was rescheduled for Oct. 7 before INS Judge Elizabeth A. Hacker in Detroit.
Circuit Judge Damon A. Keith wrote the appeals court decision. There was no dissenting opinion.
"Without question, the events of September 11, 2001, left an indelible mark on our nation," Keith wrote, "but we as a people are united in the wake of the destruction to demonstrate to the world that we are a country deeply committed to preserving the rights and freedoms guaranteed by our democracy.
"Today, we reflect our commitment to those democratic values by ensuring that our government is held accountable to the people and that First Amendment rights are not impermissibly compromised. Open proceedings, with a vigorous and scrutinizing press, serve to ensure the durability of our democracy."
The Justice Department said Monday afternoon that it disagreed with the court's conclusion. "The Justice Department has an obligation to exercise all available options to disrupt and prevent terrorism within the bounds of the Constitution, and will review today's opinion in light of our duty to protect the American people," said DOJ spokeswoman Barbara Comstock.
Haddad has sought political asylum in the United States, saying he feared he would be persecuted if he returned to Lebanon. He is being held in a county jail in Michigan.