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11/21/2005 Speech at the Russell Senate Office Building "US Charitable Contributions, Illegal Settlements, and Suicide Terrorism (Watch a video PowerPoint Presentation)

Grant F. Smith

Grant Smith, director of researchThank you for coming today.  My presentation is titled “US charitable contributions, illegal settlements and suicide terrorism.

The year 2005 has been remarkable for the number of insights that have become public through focused research projects.  New estimates place financial flows for illegal settlement construction in occupied Palestinian territories at US $50-60 billion. A stunning report, published by a fearless Israeli prosecutor, Talia Sasson, sheds new light on rampant, settlement expansion coordinated by the World Zionist Organization, Israeli government funding, and management by US tax exempt corporations.  The prosecution of Washington DC Lobbyist Jack Abramoff for diversion of Indian casino lobbying money to purchase arms for illegal settlers, revealed a new aspect of US Tax Exempt charitable organizations that conceal activity from the IRS in their transfer of money and arms.

All of this has consequences for the United States.   As we'll see when we review Professor Robert Pape's groundbreaking study of role occupation plays as the leading cause of suicide terrorism.   In the time allotted, I will draw some conclusions about how these affect US interests, and why US law enforcement agencies need to confront these problems.

A series of news reports this year, including these quotes from the newspaper USA Today, have revealed the quantity of funds flowing toward illegal settlement building while raising questions about where the funds came from, and how funds are deployed.

Vice Premier Shimon Peres estimated Israel saw about $50 billion flow to settlements since Likud took over in 1977, while others place the figure closer to $60 billion.

This investment has enabled a scattered network of 142 towns and quarter million settlers to thrive, As 10,000 acres of land confiscated by the military were doled out to settlers.

Although US tax laws, and as we'll see later, the criminal code, does not allow this, the World Zionist Organization has allowed donors to inject money into settlements without losing tax exemptions.

And all this in the face of consistent US foreign policy aims which formally discourages settlement activity.

Former Israeli state prosecutor Talia Sasson was chartered by the Israeli Prime Minister to investigate and submit a report about the status, funding, growth, and entities promoting illegal settlement growth in occupied territories.  Talia Sasson released a full report to the Israeli cabinet in March of 2005, a public summary of which is available online simply by searching for “Summary of the Opinion Concerning Unauthorized Outposts  The report removes a tight lid formerly kept on a massive criminal conspiracy involving government agencies and nonprofits.  And let's be clear that the illegality in this case is against Israeli law, as opposed to International law.

Sason compiled what she refers to as a partial list, of 150 communities with incomplete or nonexistent permits.  The four requirements Israel mandates for a settlement to be legal in accordance with Israeli law are: 

  1. Establishing a settlement must be made by the authoritative political echelon.
  2. Interests (title) in the land must be settled. After the High Court of Justice ruling in the case of Elon More, a 1979 Israeli government resolution states that Israeli settlements shall be established only on State land.
  3. The third condition is that a settlement shall be established only according to a lawful designed building scheme with a permit.
  4. The fourth condition is that the bounds of jurisdiction of such a settlement be determined in an order by the Commander of the area.

The lack of fulfillment of one of them makes the settlement illegitimate.  The 150 settlements she identified were illegal for lack of one or all legal requirements.

But more troubling, Sasson also found formal government support for illegal settlement building including the provision of free mobile homes, Defense Ministry coordination in the deployment of a settlement, electrical grid hookups, as wells as education ministry support for nurseries.

She found the central coordinator of illegal settlements is the World Zionist Organization, or WZO, which was involved in allotment of lands, construction finance, and seizure of Palestinian property or private lands, all of which fall outside of its legal mandate. 

The violations are focused on the WZO's settlement division, which is not formally part of the Israeli government, but shares facilities and budget with the Jewish Agency which oversees development within Israeli's internationally recognized borders.  The Settlement Division, and Jewish Agency came from the former Land Settlement Department of the World Zionist Organization, which has managed the creation of villages since the 1920's before it was separated into two bodies.  WZO is a complex organization, “funded mainly by philanthropies” according to a report from “The Forward” titled “Jewish Officials Profess Shock Over Report on Zionist Body” on 3/18/2005.  Again, WZO is not part of the government (source Forward) yet is in the corporate sense, an international organization tied to nonprofits in many countries, including the United States.

According to the article in “The Forward”, a number of US nonprofits control 30% of WZO, and are active raising funds and conducting tax exempt activities in the US.  Their direct and controlling ties to the WZO, and by extension, direct responsibility for its illegal activities, are undisputable.

The Zionist Congress is the supreme institution of the World Zionist Organization and highest legislative authority.  According to its website, its voting and associate organizations meet at least once every four years to vote on candidates and WZO institutions.  The United States sends 29% of the delegates to this Congress of a maximum of 500 delegates, making the US second in importance only to Israel, with 38% of delegates.

Included in the key WZO US organizations identified by “The Forward” are US division of B'nai B'rith International and Hadassah, the Women's Zionist organization, among others.

A review of publicly available IRS information available on the website of tax filings from Hadassah and B'nai B'rith reveal robust organizations.  Hadassah has multiple chapters in major cities and engages in many beneficial charitable activities. Hadassah, women's Zionist organization of the United States founded (1912) by Henrietta Szold. It has done important work in Israel in medical service, child welfare, and aid to refugees. Hadassah provides major support for the medical school of Hebrew Univ. and most of the budget for Youth Aliyah, the organization that transports children and youths to Israel and supports them there. Hadassah's principal activities in the United States are educational and charitable work.

But again, according to the Sasson Report, there is no getting around the fact that both are also directly tied through WZO to the settlement division which has broken numerous Israeli and International laws in the pursuit of vast settlement building across the West Bank.

This is not to say that organizations with WZO ties are the only US tax exempt “charitable” organizations involved in illegal settlement building.   They're not.  A vast number of tax exempt organizations, not necessarily coordinated, funnel tax exempt contributions from US donors toward activities considered illegal by the Sasson report.  Christian Friends of Israel in Colorado Springs, with an IRS recognized mandate to “Educate Christians about the land of Israel and biblical significance of current events in the Middle East” funneled $100k to an affiliate operating in the west bank to construct bus stops and playground equipment. 

American Friends of the College of Judea and Samaria of Brooklyn, Its nonprofit mandate is the “provide support for the expansion and furtherance of the needs of educational institutions in Israel." put a quarter of the million into establishing a college in the West Bank settlement of Ariel. The One Israel Fund of Cedarhurst is very open about its role.  The "mission 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 (YESHA).“  One Israel openly funneled $1.9 million into settlements, arms, training, and military equipment.

Not all settlement finance, particularly involving arms is so openly reported to the IRS. The nonprofit mission of the Capital Athletic Foundation is to “foster character development by promoting the American ideals of sportsmanship in all endeavors. These ideals include integrity, honor, brotherhood, morality, leadership and good citizenship. Sportsmanship is ethical behavior both on and off the playing field; both in athletics and in business; both as a youth and as an adult. “

CAF's 2003 form 990 filings with the IRS are not quite so ethical.   They refer to a transaction in which  $44k granted for “education, athletics and security”   but since the lobbyist who ran the foundation is under investigation for a range of criminal activities in a case involving defrauding Indian tribe tribes with casinos, we know that in multiple cases, Jack Abramoff had Indian tribe clients donate to CAF, which then purchased and shipped military gear, including night vision goggles, sniper scopes and other equipment to the Beitar Illit colony in the West Bank.

In one such case, according to Senate testimony and news reports in Newsweek and The New Republic, Abramoff sent a note to Ben-Zvi; one of the settlers saying "Thanks brother. If only there were another dozen of you the dirty rats would be finished."  He was referring to Palestinians living around Beitar Illit.  Payments were partially run through "Kollel Ohel Tiferet," an entity not publicly listed or traceable.

These details of this case of deception are available only as a result of a tangential criminal investigation and congressional subpoenas into influence peddling and misuse of 501 c 3 organizations, related to defrauding Indian tribes, and not specifically focused on the issues of illegal settlement financing.

But it is clear that the Abramoff transaction is a case of money laundering.  The Financial Action Task Force, a Paris-based multinational group formed in 1989 by the Group of Seven industrialized nations to foster international action against money laundering, has agreed to a "working definition" of money laundering that laundering also includes legitimate proceeds with the intent to promote unlawful activity.

I'd like to shift gears now and take a look at a ground breaking study that came out this year.  Consultant to the Department of Defense, and highly respected University of Chicago professor and author Robert Pape, created a database of all (315) suicide terror attacks from 1980 to 2003 and analyzed it relentlessly.  He uncovered a common denominator of suicide terrorism and the movements that engage in it.

The empirical, quantitatively derived results of this study have given analysts a deeper understanding of suicide terrorism in an arena normally dominated by hype, sloganeering, and simplistic catch phrases

Pape found “It is a strategic effort to compel target governments to withdraw forces from land that the so-called terrorists perceive as their national homeland.”

A review of statements issued by a range of leading terrorists reveals that the occupation of Palestinian land and efforts to dislodge occupiers is a major motivator of their various causes.  The reality of documented justifications from Osama bin Ladin, Abu Mussab al-Zarqawi, and Khalid Sheik Mohammed are impossible to ignore.

Khalid Sheik Mohammed was strongly motivated to attack the World Trade Center by illegal expansion of settlements and US involvement.  Although many pundits deny this as a factor motivating terrorism because it is easier to sell terrorist masterminds as simplistic monsters who “hate freedom”, if we examine their writings and calls for actions that continue to refer to occupation as the warrant for suicide terror, there is no sound basis to doubt their sincerity, and without excusing terrorism, or doubt the power of resistance to occupation as a rallying force.

This rallying force, in the eyes of the terrorist, is the final phase of a cycle, in which weak forces, rallied against occupiers strike back at soft targets they identify as part of a larger framework of occupation.

However, as a rationale for terrorist attacks, Bin Laden, Zarkawi, and others have placed their asymmetrical retaliation on record as a direct response to expansion activities. 

US policymakers can publicly deny it, you and I could choose not to believe it, but that makes it no less of a powerful motivator for terrorist attacks.

Sasson's recommendations, which would take some of the fuel out of fire, by simple law enforcement, have come to little in the intervening nine months.  According to her, the WZO has continued a pattern of being unresponsive and obstructionist. A special committee appointed by the Israeli cabinet to implement the recommendations has accomplished little.   Sason's current observation of the cause: overall lack of political will.

Within all of this, we should realize that the person who chartered Sasson's examination in the first place, was Ariel Sharon, who has now resigned from Likud, as stated in the news media today, to enter a party more willing to deal with territorial issues with the Palestinians.

In the US, there is also a lack of will, but in case motivated law enforcement.  Laws under Title 18 of US criminal code make it illegal to carry out expeditions or any type of property seizure with a nation with which the US is at peace.  The US is at peace with the Palestinians.  Even complicated, confusing financial operations carried against them by corporate entities with Byzantine corporate governance, can prosecuted with no need for acts of congress or the executive branch.

In addition to enforcing US laws already on the books, beginning with exempt organizations with controlling stakes in the WZO, IRmep believes that the IRS should revise form 990's so that nonprofit organizations like Jack Abramoff's Capital Athletic foundation can no longer hide illegal activity as stealth participants in settlement financing.  The US treasury Department's Office of Foreign Assets Control, members of which I specifically invited to this discussion, are effective at detecting and shutting any Muslim charity suspected of involvement in terrorism.  They should develop a similar sensitivity with respect to suspect financial transfers from US charities to Israel, or international financial centers that is funneled on to illegal settlement activity.  

Law enforcement in the US and investigative reporters should expect to encounter the same intransigence, obstruction, and obfuscation encountered by Talia Sasson.  They will be asked to believe that the financial flow of $60 billion to illegal settlements is simply ‘too complicated” to unwind.  That US tax exempt organizations are only tangentially linked to the WZO settlement division, that fungible offsets to settlement transactions are okay, that organizations can't respond, or are uninvolved, or can't be held responsible...

This is nonsense.

We've got to move beyond the smoke.  It is now clear that crimes have been committed, in Israel, in the US, in Palestine and internationally; that tax exempt organizations in the US are linked, and that a law enforcement initiative is warranted.  To ignore the hard work done by Sasson, and focus only on direct terrorism generators is no longer enough.

But believe me, there will be no short term reward for shining a light on this problem, nor will the future disasters confronting it now averts be readily obvious.  As Americans, we prefer to believe all terrorism is generated by dark and evil forces arrayed against the US.   Whenever we see our own involvement in aspects of the problem, the easy, and reflexive thing to do is at a minimum, deny, or more likely, lash out against the bearer of bad news.  But I am here to applaud Sasson's work, Robert Pape's analysis, and the efforts of all those who wish to play a productive role in shutting down this terrorism generator in the name of honesty, the law, and confronting the harsh new realities made obvious over the course of 2005.

Have a happy Thanksgiving.

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