Follow-up on Ignatius and The Tax-Exmpt Staus Issuet

The JTA has a report on an issue close to my heart, and I'm quoted:

Flap over use of U.S. tax exemption to help settlements

Could a U.S. tax exemption be helping to hold back peace?

A top Washington columnist suggested that last week, and an Arab-American organization is asking the Treasury Department to investigate the tax-exemption status of U.S. organizations that financially support Israeli settlements in the West Bank.

Washington Post columnist David Ignatius pointed out in a March 26 column that while the U.S. bans the spending of government aid money on Jewish settlements, it also provides a tax exemption -- indirect government support -- to organizations that raise money “for the very activities that the government opposes.”

Ignatius emphasized that there's nothing illegal about the contributions, but noted that there were 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.

The day after Ignatius' column appeared, the American-Arab Anti-Discrimination Committee announced in a news release that it had filed “multiple administrative complaints” with the Treasury Department and the Internal Revenue Service requesting investigations into the activities of tax-exempt groups raising money for West Bank settlements, charging that the groups were using the income “in direct violation of their addressed purpose.”

An ADC spokesperson said the group found some “preliminary evidence” to suggest that funds raised in the United States were being utilized for security or settlement construction, and felt it was important to raise the issue of the tax exemption with the government.

Americans for Peace Now spokesman Ori Nir was quoted in Ignatius' piece, but said his organization was not planning or involved in any kind of initiative to yank the tax exemption for charities sending money to settlements, nor was he aware of a legislative effort to do so.

APN, he said, objects more generally to all the money going to support settlement activity -- the “very principle of funding settlements in the West Bank.”

“It's wrong for people to fund settlements,” whether it's the U.S. government, Israeli government or private individuals, Nir said. “Anyone who sends money for increased settlements is contributing to something that makes peace more difficult.”

Residents and supporters of settlements objected to the suggestion that U.S. donations to their cause were in any way blocking peace. They said that any attempt to change the rules would be unfair.

In his blog, Yisrael Medad of the Shiloh settlement wrote that “a lot of American taxpayers' money surely does go to the so-called 'occupied territories,’ actually, 'disputed,' as well as private charitable contributions, without complaint by Ignatius. It's just that the money goes to, well, Arabs” -- pointing to the $900 million of aid that the U.S. is slated to send to the West Bank and Gaza.

Medad, a former Knesset aide and media critic who describes himself as an unofficial spokesman for the Jewish Communities of Judea and Samaria, goes on to say that “What Ignatius seems to be promoting is that you can get tax-exemption for your donation if the money doesn't go to Jews. Or are there other areas around the globe where a similar thesis could be argued, that you can separate between peoples in the same territory?”

Morton Klein, the president of the Zionist Organization of America, offered similar arguments, saying it was discriminatory to single out the money Jewish settlers in the West Bank receive from U.S. groups as unworthy of tax-exempt status while permitting other organizations to raise funds for Palestinians in the area.

“The suggestion that a Jewish minority living among a West Bank Arab majority is harming peace is false,” he said.

And as a follow-up, I received this exchnage with David Ignatius from someone very involved in fundraising for Yesha enterprises:

To: davidignatius@washpost.com
cc:
Subject: funding of projects in Judea and Samaria
03/26/2009 09:37

David,

I read with interest your article in the Washington Post regarding IRS tax exemptions for contributions earmarked for helping projects in Jewish communities in Judea and Samaria. A few comments regarding issues that should have been addressed or noted as well:

1. You quote Ori Nir of American Friends of Peace Now. Are you aware that Peace Now is the trade name of a political group that does absolutely no work that can be considered charitable under 501 c3. In addition, the actual Israeli non-profit organization that they use to funnel their US based contributions is currently under investigation in Israel because it has represented itself as an educational organization, when, in fact, they have never funded anything educational.

2. While you mention the US objection to the so-called settlements, the issue at hand in determining whether a contribution fits under 501c3 is strictly a charitable measure. If, indeed, a donation is used to provide educational programming, build playgrounds, provide hot meals to needy families or similar charitable needs, the IRS never gets involved as to where these programs are located. By that logic, soup kitchens in Texas and southern California who feed illegal immigrants should be barred from tax-exempt status because they are feeding people who are acting counter to government immigration policy. Is this what you are advocating?

3. You refer to the listing of various towns in Judea and Samaria as having been misleadingly noted as being in Israel. While the US has the right to determine its own policies, it is the town or city in question that has the right to identify its own geographic location. The official address of all of the places mentioned is Israel. The Government of Israel recognizes them as being in Israel. When the US postal service handles letters addressed to Karnei Shomron, the correct way to note that address is Karnei Shomron, Israel. Are you going to ask the US postal service to stop sending these letters?

4. And one more thing to note – the name Land of Israel has been the name referring to the entire area from the Jordan to the Mediterranean for centuries, way before the State of Israel was even dreamed of. If you look carefully in the documents of the various organizations in question, they refer to supporting projects throughout the Land of Israel. And that includes Judea and Samaria, or Palestine, or West Bank or whatever name you want to put to it. You may want to change US policy but you can't change history.

5. And finally. Regardless of US policy, the Jewish people the world over consider the Land of Israel to be the ancient land of the Jewish people. Even those who contend that for practical reasons, it would be best to surrender some of that land, no one will deny that this is our heritage. And, given recent experiments which transferred vast areas of land to the Arabs and produced devastating results in the loss of innocent lives, terrorism in the Middle East and around the world, the overwhelming majority of the citizens of Israel have no interest in withdrawing from further territory any time soon.

and his response:

From: David Ignatius [mailto:ignatiusd@washpost.com]
Sent: Monday, March 30, 2009 4:28 AM
To:
Subject: Re: funding of projects in Judea and Samaria


I was addressing these issues in the context of US policy, as enunciated over successive administrations. You may view the settlements as being in Israel, but the US government does not; hostory may view Judea and Samaria as part of Eretz Israel, but the US government does not.

In any event, I thank you for taking the time to send me a clear and well-reasoned note. I suspect this issue will be under increasing discussion.

Yours,

David