West Bank Activities of US Charities Challenged in Federal Court

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January 5, 2016; Electronic Intifada

While American foreign policy has long viewed Israel’s settlement activity on lands captured in the 1967 Six Day War as an obstacle to creating a lasting peace agreement between Israelis and Palestinians, a recent investigation conducted by the Israeli daily Haaretz found that more than 50 American 501(c)(3) organizations raise funds that directly support settlement activity.

Private U.S. donors are massively funding Israeli settlements by using a network of tax-exempt nonprofits, which funneled more than $220 million (about 850 million shekels) to Jewish communities in the West Bank in 2009-2013 alone….Thanks to their status as nonprofits, these organizations are not taxed on their income and donations made to them are tax deductible—meaning the U.S. government is incentivizing and indirectly supporting the Israeli settlement movement, even though it has been consistently opposed by every U.S. administration for the past 48 years.

On December 21st, three U.S. citizens went to federal court to challenge the legality of such activities. They sued the United States Treasury Department and Treasury Secretary Jack Lew, alleging,

For at least 30 years, perhaps more, Treasury officials have turned a blind eye towards the criminal conduct that approximately 100 U.S. pro-Israeli-settlement 501(c)(3) s have either funded or engaged in. These entities have been the primary source of funding to expand settlements in the Occupied Palestinian Territories (“OPT”) and East Jerusalem (“EJ”) 2, and in the process, have financed ethnic cleansing, theft of private property, and malicious property destruction.

The plaintiffs are asking the court to require an investigation and revoke the tax-exempt status of as many as 150 organizations, which have raised over $280 billion in the past 20 years. Martin McMahon, lawyer for the plaintiffs, believes the organizations are violating eight federal criminal statutes and up to six Treasury regulations. “McMahon said the plaintiffs in this case chose to sue the U.S. Treasury because the agency has clear standards in place to enforce. He said that before pursuing litigation, he wrote letters to the Treasury, asking them to investigate the organizations in question.”

The Haaretz investigation citied the activities of the Brooklyn, N.Y.-based Hebron Fund as a case example. The Hebron Fund’s website tells us that while “the fund is a separate entity, it was created as an affiliate organization of the Jewish community in Hebron and, subsequently, operates in concert with the community there to assess their needs and respond in kind. A primary goal of the organization is the raising of capital for the improvement of daily life for the residents of Hebron, Israel. This includes funding for all parks, playgrounds, recreation centers, after-school programs, libraries, and summer youth activities; as well as sponsorship of public cultural and educational events in Hebron.”

Haaretz’s investigation uncovered how the tax-exempt dollars raised in the United States were spent when transferred to Hebron. While some were spent on efforts to improve the quality of life for Jewish residents of Hebron, “funds also went to pay the monthly salary of Menachem Livni, who headed the Revivers nonprofit group between 2010 and 2012. Livni is a convicted murderer. He was one of the leaders of the Jewish Underground that operated in the occupied territories in the 1980s and was responsible for the killing of three Palestinian students and severely injuring two Palestinian mayors and a Border Police sapper. Livni, who was sentenced to life imprisonment but was released after six years, was paid hundreds of thousands of shekels by the Hebron Fund.”

When asked by Haaretz for its reactions to their findings, a senior White House official said:

The policy of every administration since 1967, Democrat and Republican alike, has been to object to Israeli settlement beyond the 1967 borders. The present administration is no different. Concordant with permanent U.S. policies, this administration never defended or supported any activity associated with the settlements. It doesn’t support or advance any activity that will legitimize them.

A diplomatic response indeed, but one that skirts the question of how appropriate it is for U.S. charities to direct their fundraising in directions that directly conflict with national policy. Should these gifts continue to merit tax-exempt status? Should these charities continue under the auspice of American law? The December 21st suit may begin to answer these questions.—Martin Levine

  • As there is nothing illegal in a Jew residing in the territory of his historic homeland, as defined by an international law decision of the League of Nations, and given that until Arab ethnic cleansing operations between 1920 and 1948 aimed at expelling Jews from those areas including Old Jerusalem, Hebron, Gaza, Nablus, Bethlehem, etc. where Jews had been living for centuries even under foreign conquest and occupation, including that of the Arab invasion of 688 CE, assured that no Jew could live in Judea and Samaria between 1948-1967, and that the 1967 war was defensive against yet another Arab war of aggression, what possibly could be the problem? This is a frivolous case in principle and cannot be supported in the supposed “facts” of the complaint. I am surprised you did not/could not see that.