The State Department and Saudi Schools

A Federal Pannel Urges State Department to Shut Down Islamic Saudi Academy in Fairfax County Virgina:

A federal panel yesterday urged the State Department to shut down a Saudi government-supported private
school in Northern Virginia unless it can prove it is not teaching religious
intolerance.

In a report released yesterday, the U.S. Commission on International Religious Freedom criticized what it called the promotion of religious extremism in Saudi-run schools around the world, including in the kingdom. It leveled particular criticism at the Islamic Saudi Academy, which operates two campuses in Fairfax County, expressing "significant concerns" that the school is promoting a brand of religious intolerance (emphasis mine) that could prove a danger to the United States.

...

State Department spokesman Karl Duckworth said the department is studying the commission's report. "We continue to engage the government of Saudi Arabia on the need to address the intolerant references toward other religious groups in their textbooks and in other educational materials," he said. "There has been progress . . . but they still have a ways to go."

The commission and other religious-freedom groups have been complaining about Saudi textbooks for years, and congressional hearings have been held on the subject. Last year, the Saudi government agreed to make changes. The commission is following up but said it has not been given access to the revised texts.
Ordinarily, the U.S. government would have little power to close a private religious school, said Kevin Seamus Hasson, president of the Becket Fund for Religious Liberty.

But because the school is funded by the Saudi government, the U.S. government could consider the school a Saudi entity and, thus, subject to a U.S. law that gives the government wide discretion in regulating the non-diplomatic activities of foreign governments in the United States, Hasson said.

My question: Is the law allowing the US Government latitude in dealing with the school as a Saudi government agency unconstitutional when it is used to stifle religious speech?

I don’t have any knowledge about prior court cases near the nature of this situation, but it would appear they are trying to subdue speech found to be intolerant, which it clearly is. But I just do not see any legal way the government can justify shutting down the academy. Even if the speech called for killing Jews, Christians, Shias, and just about anyone else who is not a strict Sunni, unless they called for their deaths immediately it cannot be construed to produce “immanent lawless action.”