Bingo! U.S. donors fund illegal Jewish settlements

The Obama administration - like its predecessors for the past three decades - has turned a blind eye to what makes illegal Israeli settlements in the West Bank and Jerusalem possible: donations from American charities.
israel American Settlers
An unknown number of North Americans have settled in the West Bank and Jerusalem since Israel occupied the territories in 1967 and retain dual citizenship. Middle East historian Juan Cole wrote that an estimated one third of West Bank settlers are "Americans."

BEIRUT, August 5, 2009 (MENASSAT) - In a pre-dawn raid on Sunday (August 2) Israeli police clad in black riot gear evicted two Palestinian families—53 people in total—from two buildings in the Sheikh Jarrah neighborhood of East Jerusalem. The evictions followed a ruling by the Israeli Supreme Court that claimed Jewish families had owned the land before 1948. Two Jewish families moved in immediately after the evictions, on the same site that Israel plans to build a 200-unit settlement.

The evictions were protested by the U.K., U.S. and the United Nations, and came after the US recently also demanded a halt to Israeli construction at the site of the nearby Shepherd Hotel. 

According to Haaretz, “U.S. Assistant Secretary of State for Near Eastern Affairs Jeffrey Feltman summoned Michael Oren, Israel's ambassador to Washington, to tell him that the United States views Sunday's eviction of two Palestinian families from homes in East Jerusalem's Sheikh Jarrah neighborhood as a ‘provocative’ and ‘unacceptable’ act that violates Israel's obligations under the road map peace plan.”

Compared to the Bush Administration’s policy towards settlement construction—which was apparently encouraged behind closed doors at the highest levels—President Obama’s approach is seen as “harsh” by the Israeli government and heralded by commentators who wish to see the U.S. broker a two-state solution.

The Obama administration, however, like its predecessors for the past three decades, has turned a blind eye to what makes the building and maintenance of these illegal settlements possible: donations from American charities.

Bingo dollars to annex Jerusalem

Only days prior to the August 2nd land grab in East Jerusalem that was decried by the US administration, it was widely reported in the English-language press that two American magnates were funding the seizures of Arab homes in Jerusalem, including in Sheikh Jarrah.
On July 27, Bloomberg reported that Renco Group Inc. founder Ira Rennert and bingo entrepreneur Irving Moskowitz were among U.S. donors “who have given $25.4 million in five years to build Jewish homes in Arab parts of Jerusalem -- the same areas that President Barack Obama is pressing Israel to stop such construction.” In 1985, Irving Moskowitz had purchased The Shepherd Hotel where Israel was now planning construction despite protests from the US.

Moskowitz is the owner of a bingo parlor in a southern California low-income residential complex, the profits from which are funneled to settlements in East Jerusalem and Hebron. Moskowitz and Rennert also contributed to the tunnel complex that runs underneath the Al-Aqsa mosque. In 1996, after Prime Minister Netanyahu opened the restored tunnel, riots broke out which left about 70 Palestinians and 12 Israelis dead.

Donors oppose Palestinian state

According to Gershom Gorenberg, author of “The Accidental Empire: Israel and the Birth of the Settlements,” donors like Moskowitz, “want to prevent any political compromise that might lead to a peace agreement.”

Moskowitz, whose organization is one of the top 1,000 private foundations in the U.S., has called the peace process, “a slide toward concessions, surrender and Israeli suicide.” In 2000, a video game registered to Moskowitz’s wife, which allowed gamers to virtually assassinate “pro-peace” politicians was removed after complaints by the Israeli government.

Tax-deductible donations for the settlement enterprise

Not only are U.S. citizens like Moskowitz making donations to the settlement enterprise in direct contravention of official U.S. policy, but many of these donations are also tax-deductible and deliberately sent to fund construction in areas, which are recognized by the U.S., European Union and UN to be under illegal occupation by Israel. 

According to an International Monetary Fund (IMF) report in the mid-1980s, donations to Israel worldwide were already reaching $1 billion per year; 70 percent of this amount came from the United States. In addition, funds sent to Israel have often been channeled to the settlement enterprise, unbeknownst to the donors. According to David Ignatius, writing in the Washington Post in April, “Often the U.S. charities will specify that their gifts are going to charities in Israel, even though the recipients are in the West Bank, which the United States regards as occupied territory. American Friends of the College of Judea and Samaria, for example, said its donations were ‘to provide for the expansion and furtherance of the needs of educational institutions in Israel,’ even though the college is in the settlement of Ariel. Similarly, other filings speak of gifts to ‘Elon Moreh, Israel,’ ‘Gush Etzion, Israel,’ ‘Karnei Shomron, Israel,’ ‘Efrat, Israel,’ and ‘Bat Ayin, Israel,’ even though those settlements are all in the West Bank.”

As such, an estimated $50 billion has been spent to fund the settlements, according to Israeli president Shimon Peres.

David Ignatius discovered that “A search of IRS (Internal Revenue Service) records identified 28 U.S. charitable groups that made a total of $33.4 million in tax-exempt contributions to settlements and related organizations between 2004 and 2007.

One of the Israeli organizations that has led the way in developing this area of East Jerusalem is called Ir David, or City of David. […] According to Form 990s filed with the IRS, Friends of Ir David raised $8.7 million in 2004, $1.2 million in 2005 and $2.7 million in 2006.

The group's primary tax-exempt purpose, according to the IRS filings, is: ‘To create a charitable fund to provide financial aid & other reasonable assistance to benefit the Jewish people of the Old City of Jerusalem. To teach about the history and archeology of the biblical city of Jerusalem. To offer aid & assistance for education, housing & the rehabilitation of distressed properties.’”

But, a 2005 report by the Congressional Research Service stated: "The United States stipulates that U.S. aid funds cannot be used in the occupied territories." Despite this fact, according to USA Today, “U.S. tax laws don't exempt donations for political activities such as settlements.”

A blind eye to funding the occupation

David Newman, a political scientist at Israel's Ben Gurion University, told USA Today, “U.S. tax laws don't exempt donations for political activities such as settlements. Israel separated the World Zionist Organization from the quasi-governmental Jewish Agency, a move that allowed donors to inject money into settlements without losing tax exemptions. In reality, the two groups operate under one umbrella, with the same officials, departments and administrators overseeing the activities.”

“’The principal sources’ of private funds to Israel, according to a study published by the Middle East Institute, ‘are the prominent national Jewish charities, such as the United Jewish Appeal, but significant sums also flow through many smaller channels, especially since any charity recognized under Israeli law automatically qualifies for tax-deductible status in the United States under the Internal Revenue Code, a privilege not generally accorded other foreign states.’”

Americans in the West Bank

In addition to funding settlements, an unknown number of North Americans have also settled in the West Bank and Jerusalem since Israel occupied the territories in 1967 and retain dual citizenship. Middle East historian Juan Cole wrote on his blog that an estimated one third of West Bank settlers (approximately 100,000) are “Americans.”  MENASSAT could not confirm this number, but was told by a leading Israeli NGO that monitors settlements that the information is “sensitive” and the Israeli government would never release it if requested. The NGO also confirmed that a number of settlers were “new immigrants” to Israel.

Eye-witnesses, including former settlers, have testified that Americans in the West Bank city of Hebron, home to 166,000 Palestinians  and some 500 hardcore Israeli settlers, have been involved in attacks against civilians.  “I have spent time with these American émigrés, who brag of their ability to ‘keep the Arabs in line.’ They swagger through the town, pointing their weapons at passers-by and laugh as their targets scurry out of their way,” Steven Zunes, a professor at the University of San Francisco, wrote. Dennis Fox, an American who immigrated to Israel in the 1970s but returned to the US, reported that settlers, who attacked American peace activists accompanying Palestinian children home from school in Hebron, allegedly “spoke English to each other while unleashing their blows, and then ran away.”

While this anecdotal evidence does not necessarily suggest that American settlers are the most radical, nor does it account for the number of Americans occupying Palestinian land, many Americans who move to settlements leave well-to-do lives in the US behind and are motivated by religious providence and Jewish claims to Greater Israel-- a position incompatible with the US' declared aspirations  for a two-state solution. Baruch Goldstein, who killed 29 Palestinians in a massacre at the Ibrahim Mosque in Hebron in 1994, was an American immigrant to Israel.

A study of Americans who occupy the West Bank conducted by David Newman in 1985 estimated that 10-15% of West Bank settlers at the time were Americans. The survey showed that most American settlers at the time were affluent, very well educated “ultimate suburbanites,”  overwhelmingly motivated by religious reasons.

Steven Zunes estimates that 1/3 to 1/2  of settlers in Hebron today are Americans, and that many of them, are involved with occupying Palestinian homes and constructing outposts that even the Israeli government deems illegal. If the current estimates by Zunes and other scholars are correct, then compared to the 1985 estimated population, American immigrants may in fact be contributing overwhelmingly in recent years to the expanding settler population, again in contravention of official US policy.

Active pursual of American immigrants

Indeed, Israel officially encourages North Americans to move into settlements. On its website for North Americans considering immigration, the semi-governmental Jewish Agency actively promotes—and offers financial assistance for—immigrants moving to West Bank settlements, such as Ariel:

“Amidst terraced hills and age-old olive trees in the heartland of Biblical Israel, is the blossoming city of Ariel. Established in 1978, it has taken Ariel just under thirty years to emerge as a city that demands to be noticed. […] Today known as the Capital of Samaria, and home to the largest college in Israel, her unprecedented growth, and the undeniable declaration that Ariel is in the consensus, all point to the fact that she is here to stay. Ariel is all about vision, built with every step planned. Its newest step, that of formally opening its doors to North American aliyah, is another dimension of that unbridled vision.”

US loans went to settlements prior to Oslo

The relationship between US charities and the Israeli occupation has been well documented since the 1980s. Prior to 1992, Israel was chanelling US loan guarantees to settlements, until then-Secretary of State James Baker ordered funds used for settlements to be deduced from the coming aid package. But the cuts didn’t amount to much, with loans and aid increasing steadily. According to USA Today, “In 2003, when Israel was granted $9 billion in loan guarantees over three years, the cut was $289.5 million. Officials familiar with the issue, and speaking on condition of anonymity, say that low figure was reached with the help of the influential pro-Israel lobby, the American Israel Public Affairs Committee (AIPAC).”

Lawsuit against charities failed

In 1984, a lawsuit was filed by Americans, Palestinians and Israelis challenging the tax-exempt status of six US charities—the Jewish National Fund (JNF), the Jewish Agency American Section (JA), the World Zionist Organization American Section (WZO), the United Israel Appeal (UIA), the United Jewish Appeal (UJA), and Americans for a Safe Israel. The plaintiffs  included Charles Fischbein, the resigned executive director of the Jewish National Fund in Washington, D.C, who had discovered that his contributions for the construction of a playground in Kiryat Shmona in northern Israel had in fact been used to build an Israeli army staging area for the occupation of southern Lebanon.

The lawsuit was dismissed on a procedural technicality because the judge denied the plaintiffs “standing,” ruling that the plaintiffs suffering wouldn’t be reversed or alleviated by shutting down the charitable donations.

In addition, the Institute for Research: Middle Eastern Policy (IRmep), a think tank focused on the intersection between US policy towards the Middle East and law enforcement, has documented the case that charities are engaged in violating both US policy and international law. IRmep filed Freedom of Information Act (FOIA) petitions to obtain information on the charities’ activities with the US Internal Revenue Services (IRS), and used the records, in addition to eyewitness accounts of what the funds were being used for, to brief both the US Departments of Justice and the Treasury. They also filed a formal complaint with a New York District Attorney in 2008, who has not yet responded to the legal move, claiming that the information provided is “under review.”

The IRS records and subsequent investigations obtained by IRmep also showed that money was being laundered to fund the occupation. For example, former high-profile lobbyist and conman Jack Abramoff, who was sentenced to four years in prison in 2008 on criminal felony charges, laundered money into Capital Athletic Foundation, which funds an illegal settlement called Beitar Illit, as well as weapons and sniper rifles for the settlers.

‘The elephant in the room’

IRmep showed that “not all illegal settlement funding flows from the US are the product of money laundering. A large number of organizations openly raise and disburse funds for the Israeli colonization of Palestinian territories. Although most misrepresent these activities to the IRS as ’educational’ activities, others, such as the One Israel Fund, Inc. of Cedarhurst openly tout their efforts to transfer, arm, and promote Jewish settlements in occupied territories.”

These charities included Christian Friends of Israel, American Friends of the College of Judea and Samaria, and the One Israel Fund, Inc. The One Israel Fund’s stated mission “is to provide essential humanitarian assistance to the over 225,000 men, women and children living in the 150 plus communities throughout Judea, Samaria and Gaza,” but included “$1.9 million in year 2003 to finance illegal settlements, arms, ‘Friends of the IDF’ organization, and ‘security equipment’," according to IRmep’s report, which was sent to “key American officials.”

Later, IRmep filed Freedom of Information Act requests with both the Treasury Department and the IRS to find out if  the agencies were cracking down on the charities. The Treasury Department rejected the request under the Bank Secrecy Act; the IRS cited privacy laws and refused to comment further.

“It is the elephant in the room in all discussions—the raw power of groups funding [the occupation] versus formal US policies,” Grant Smith, director of IRmep told MENASSAT.

So why isn’t the Obama administration doing more to reign in these donations?

Smith claims that this is an issue of political sensitivity. He says, the treasury department’s branch tasked with “terrorism and financial intelligence,” which was set up after 9/11 to crackdown on Islamic organizations, refuses to go after these Christian and Jewish charities that contribute to the Middle East conflict and is “un-transparent” in its dealings.

But with the mainstream media focusing more on housing demolitions in Jerusalem and the donors who fund these land grabs, it would seem timely for organizations opposed to the settlements to push for a crackdown on these charities.

US ‘pro-peace, anti-settlement’ groups mum

MENASSAT contacted two American organizations, Americans for Peace Now (APN) and J-Street, who  support the Obama administration’s policy to halt Israeli settlement construction. Both organizations replied that they preferred not to comment on American charities funding the continued annexation of Palestinian land. J-Street said they were “watching the issue closely,” and Ori Nir of APN said he “unfortunately know[s] very little about this topic,” (despite the fact that he had spoken to the Washington Post about the matter a few months earlier.)  Pressed by MENASSAT to explain why they weren’t pursuing this important issue, rather than only supporting the US’ calls for a settlement freeze, Nir replied, “Obviously, APN opposes any funding of settlement activity, coming from any source. Any dollar, Euro or shekel that goes to West Bank settlements makes Middle East peace that much harder to reach.” J-Street’s Vice-President replied that they “do sincerely appreciate your looking into this issue and hope  [MENASSAT] will send me a link when it is posted.”

If the Obama Administration is serious about reversing settlement policy or halting settlement growth, they might first address the illegal behavior of their own citizens—both abroad and in the US. Without reigning in the activities of Americans seeking to sabotage efforts at a settlement freeze, Obama’s efforts won’t amount to much more than mixed messages.

[Correction (7/8/2009): The statement “I have spent time with these American émigrés, who brag of their ability to ‘keep the Arabs in line.’ They swagger through the town, pointing their weapons at passers-by and laugh as their targets scurry out of their way,” was initially incorrectly attributed to Dennis Fox. Steven Zunes reported this observation. The current text has been corrected.]