In my last post, I touched on one of life's little mysteries: the designation, in such fond and foolish places as Australia, of Israel's global, quasi-governmental fundraising agencies (such as the United Israel Appeal) as charities and, hence, deserving of tax-exempt status. Predictably, this lurk has not gone legally unchallenged.
While researching the subject, I happened on the compelling story of one such challenge. With its cast of Palestinian victims of Zionist terror and dispossession, an Israeli dissident politician, an anti-Zionist rabbi, a Zionist defector and others, and the strength of its challenge to a clear and present injustice, the case of Kareem Khalaf et al. v. Donald Reagan et al. would have had all the ingredients for a rivetting courtroom drama - but for its wimpish denouement, yet another example of the law's capacity to be a total ass.
What follows is taken from an article dealing with the genesis of the challenge by Rex Wingerter, US Zionist Organizations: Their Tax-Exempt Status Challenged. It comes from the Fall 1984 edition of the Journal of Palestine Studies. Given the length of the article, I've decided to break it into two separate posts, with a third on the judgment itself from a later article by the same author. I've also abridged it, and added some data and comments of my own in square brackets. The headings and highlightings are mine:
"In October 1983, 10 Palestinians, 1 Israeli and 5 American citizens brought suit in the US Federal Court in Washington, DC calling on the Secretary of the US Departnent of the Treasury and the Commissioner of Internal Revenue to revoke the tax-exempt status of 6 Zionist organizations based in the US. The organizations are the World Zionist Organization American Section, Inc., also known as the Jewish Agency; the Jewish Agency American Section; the United Israel Appeal; the United Jewish Appeal; the Jewish National Fund; and Americans for a Safe Israel. If the plaintiffs succeed, their action could stop the flow of the millions of dollars that are transferred yearly to the state of Israel by American Zionists. The US government is the defendant in the suit, not the Zionist organizations, because it was the decision of the US Department of the Treasury to grant tax-exempt status to the organizations. Being granted tax-exempt status by the Treasury Department... can be the financial life line for many organizations. It permits individuals who donate money to a tax-exempt organizations to deduct the same amount from their yearly income taxes paid to the US government. Many, if not most donors, would not contribute to organizations if they could not 'write off' the contribution in their income taxes. Indeed, because of the way US tax laws are currently written, individuals with high incomes find their yearly tax burden reduced if they make substantial contributions to charitable, tax-exempt organizations. For many American Zionists, this tax deduction increases their willingness to give millions of dollars yearly to pro-Israeli organizations... Total charitable transfers from the US to Israel have been estimated at between $950 million and $1 billion for the last several years...
The Palestinian Plaintiffs
"The Palestinian plaintiffs include Karim Khalaf, Bassam Shaka'a, Ibrahim Tawil, Fahd Qawasmeh, Wahid Hamdallah and Ahmad Mustafa Sbeih. The first 5 were the elected mayors of Ramallah, Nablus, al-Bireh, Hebron and Anabta, respectively, located on the Israeli-occupied West Bank, who were dismissed from their positions by the Israel authorities. Mustafa Sbeih is the mukhtar of the village of Aqraba on the West Bank. The mayors bring suit, on behalf of themselves and their constituents, complaining that they suffered physical injury*, the denial of their basic human rights because they sought adequately to represent their constituents, the loss of their land and the diversion of water due to the oppressive actions of the Israeli forces. These were supported in substantial part by contributions, for which deductions have been claimed by US donors made to the [above] US-based Zionist organizations... Ahmed Mustafa Sbeih brings suit, on behalf of himself and as the representative of the 7,000 residents of Aqraba, complaining that tax-exempt US-based Zionist organizations have deprived him and his fellow villagers of their land... Altogether, some 80,000 dunums of [Aqraba's land] have been seized by the Israeli authorities for acquisition by the Jewish National Fund (JNF)... The four remaining Palestinians bringing suit are landowners in the West Bank... They have suffered the illegal confiscation of their land, and the destruction of their orange groves, olive trees, and wheat fields by the Israeli occupying forces for the purpose of establishing settlements... for the exclusive use of Israeli Jews... [*Karim Khalaf and Bassam Shaka'a were maimed by a car bomb rigged by Israeli settlers in 1980.]
The Israeli Plaintiff
"The one Israeli plaintiff is Charlie Biton, an elected member of the Knesset and a member of a minority political coalition, the Democratic Front for Peace & Equality. He argues that funds contributed through the tax-exempt Zionist oeganizations in the US go to their Israeli counterparts which are, in fact, departments of the Israeli government, and are utilized to support the policies and persons of the ruling Likud Party. This outside interference with the political process in Israel works to deny him and his colleagues an equal opportunity in the Israeli political arena and thwarts efforts for the establishment of a democratic structure and practice in Israel.
The American Plaintiffs
"The 5 American plaintiffs include include Moshe Hirsch, John Davis, Edward Keenan, Subhi Widdi, and Charles Fischbein.
"Rabbi Hirsch complains that the religious community to which he belongs has lived in Jerusalem for more than 200 years in peace with its neighbors, until the establishment of the state of Israel, which Rabbi Hirsch and his community, the Neturei Karta, believe to be an anti-Jewish state. Contributions raised by the tax-exempt American Zionist organizations are forwarded to the state of Israel and are used in part to oppress the Neturei Karta to the detriment of Hirsch and his family. The claimed damage to Hirsch and his family includes the arrest of his son for refusal to serve in the Israel armed forces.
"John Davis is the former Commissioner General of the United Nations Relief & Works Agency for Palestine Refugees in the Near East (UNRWA). He has served as the Assistant Secretary for Agriculture of the United States, as the Vice-Chairman and Director of the New York office for the American University of Beirut, and is the founder and past chairman of the board of American Near East Refugee Aid (ANERA), an organization which he presently serves as Chairman of the Board Emeritus. Dr Davis is also the author of The Evasive Peace: A Study of the Arab-Israeli Conflict. For the past 15 years, Dr Davis has labored in the private sector, through ANERA and in concert with other organizations and individuals, to create employment opportunities on the West Bank for Palestinians through economic development of the area, as well as to provide educational opportunities and vocational training for the young Palestinians who live there. The Israeli government has adopted a consistent and systematic policy to deny education and employment opportunities to residents of the West Bank because of their religion and national origin, and in order to coerce them to emigrate from the West Bank. These educational and charitable efforts made by Dr Davis... have been undermined, and to a large extent nullified, as a result of the funds contributed through the tax-exempt US-based organizations which go to their counterparts in Israel and are utilized to support policies which deny employment and educational opportunities and vocational training to residents of the West Bank due to their religion and national origin.
"Edward L Keenan is a full professor in the Department of Linguistics at the University of California at Los Angeles (UCLA)... Professor Keenan is presently president of the Committee in Solidarity with the People of Palestine (CSPP), an organization founded and registered as an independent campus organization at UCLA for the purpose of bringing to the attention of the American people the injustices done to the Palestinian people and the role the US has assumed in supporting these injustices... The CSPP prevents a viewpoint different from, and in many respects entirely contradictory to, the viewpoints expressed by the US tax-exempt Zionist organizations. The CSPP has not filed for recognition of tax-exempt status since it seeks to influence legislation and public opinion - as do the Zionist organizations named above - and seeks to work not merely in a charitable and educational framework but to function politically as well - as do the Zionist organizations named above - and is not therefore entitled to recognition as a tax-exempt organization, in the same way that the above-mentioned Zionist organizations are not entitled to such status.
"Subhi Widdi, a resident of Brooklyn, New York, is a naturalised citizen of the US and a native of Palestine from the village of Beit Hanina, a short distance north and west of Jerusalem. He owns land at Beit Hanina which has been in his family for at least 300 years... In 1970, after he had become an American citizen, approximately 10 acres of Widdi's land in Beit Hanina were confiscated by the Israeli authorities, over his objection and the objection of his family. Because of the proximity of Widdi's land to Jerusalem, it is worth approximately $100,000 per acre. The Israeli authorities have offered $16 per acre as compensation, but have not paid even that amount to the plaintiff or the members of his family. The seizure of his land and the construction of Ramot were substantially supported by funds raised through contributions - for which charitable deductions have been claimed by US donors - made to the US-based organizations, named herein.
"Charles Fischbein, until his resignation in March 1984, was the Executive Director of the Washington regional office of the JNF... where his official duties included fundraising. [And thereby, as they say, hangs a tale!] After his resignation, Fischbein founded the Institute for Middle East Conflict Resolution (IMECR), which has as its purposes the promotion of a dialogue and understanding among Americans, Israelis and Palestinians, and advocacy of a just and peaceful resolution of the Israeli-Palestinian conflict. As a result of the continued and improper recognition by the US government of the tax-exempt status of the JNF, despite its status as a foreign conduit, Fischbein claims to have suffered harm to his professional reputation as a fundraiser and therefore to his ability to earn a living... Fischbein swore in a signed affidavit that he had resigned his position as a fundraiser and executive for the JNF because he could no longer close his eyes to the legal and moral violations committed by these organizations. He described how he had chosen from a JNF Projects Manual the task of raising funds for the construction of a sheltered playground for children at the kibbutz of Kiryat Shmona in northern Israel, close to the Lebanese border, with a projected budget of $500,000. He obtained a number of gifts and pledges in the total amount of $275,000 in the first year. A husband and wife, prominent members of the Washington DC Jewish community, pledged $75,000, with approximately $20,000 donated immediately in cash. Because of the size of the pledge, it was arranged that the playground would be named after this couple... After 18 months, Fischbein had transmitted $270,000 in funds specifically earmarked for this project to the JNF national office in New York for transmittal to Israel. In the spring of 1982, the couple who had pledged the $75,000 told Fischbein that they planned to visit Israel that summer and they wished to visit 'their playground'. The previous winter, the JNF had given a dinner in their honor at which the playground project was officially dedicated to them. The couple did travel to Israel and to the site of the playground. Upon their return, they told Fischbein that when they arrived at Kiryat Shmona, they found no playground and no construction underway. Instead, at the supposed site of the playground, they found an Israel Defense Force staging area littered with garbage and beer cans. They told him that they were furious, and that the JNF had raised money under false pretenses. Also as a result of this, another contributor, the person who had pledged $50,000 and contributed $20,000 in cash, told Fischbein that he would not see him again and that he did not deal with people who do not keep their word. Fischbein subsequently learned that the money for the playground had gone into the general funds of Israel, and that there are no US controls with regard to the use of funds raised in the US for special projects. Because the couple has threatened publicly to expose the misuse of their contribution, Fischbein understands that the JNF in Israel plans to commence construction of the playground with other funds. Fischbein's disillusionment with the JNF deepened, he stated in his affidavit, when he took a trip to southern Lebanon in the summer of 1982 with other leaders of the JNF. The trip was arranged in order to bolster support in the US for the Israeli invasion of Lebanon. Immediately upon their arrival at Tel Aviv Airport, the group boarded buses and were taken to northern Israel and then into Lebanon to the area occupied by the Israel Defense Forces. Accompanying them were Moshe Rivlin, director of the JNF in Israel, and Dr Samuel I Cohen, Executive Vice-President of the JNF in the US. During the bus ride, Dr Cohen announced that JNF bulldozers were an integral part of the military effort since they had preceded the troops in forging the path of the invasion. Further, he boasted that the JNF was 'up to its ears' in the development of Jewish settlements on the West Bank. When the group arrived in southern Lebanon, they saw the devastation caused by the Israeli bombing. When some persons expressed dismay and horror at the destruction, Dr Rivlin stated that no-one must express any doubt or misgivings about the invasion when they returned to the US, or they would immediately be fired from their positions with the US-based JNF offices. Fischbein further swore that he had been deceived by the JNF, and misled as well by the US government, into believing that the JNF was a charitable organization. He now understands that the funds raised by the JNF in the US were not controlled by the JNF in the US; the JNF instead served as a conduit for a foreign state and thus became a foreign agent. In addition, the funds raised by the JNF in the US were not all used in Israel; indeed, much of the money was diverted instead into the West Bank and Lebanon for purely military purposes and for the continuation of the occupation of the West Bank, the Gaza Strip and Lebanon, and were used in a discriminatory fashion exclusively on behalf of some Israeli Jews, and specifically to the detriment of the Palestinian residents of these areas."
To be continued...