The Honorable Janet Yellen
Secretary of the Treasury
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Secretary Yellen,
We write to express our extreme concern that U.S. charities are funding and providing direct support to Israeli organizations that are working to expand and perpetuate Israel’s illegal settlement enterprise in violation of international law, including supporting the dispossession and forced displacement of Palestinians from occupied East Jerusalem neighborhoods. We are concerned that these policies violate U.S. obligations under international law, as well as federal tax law.
Since Israeli forces occupied the West Bank, including East Jerusalem, and the Gaza Strip in 1967, Israeli authorities have pursued an unlawful settlement enterprise in occupied territory—an aggressive policy of seizing lands either privately owned by, or collectively used by Palestinia ns, and allocating them for the use and enjoyment of Jewish Israelis. Israeli authorities utilize discriminatory housing, land, and property legal regimes and impermissible military justifications to dispossess Palestinians of their lands, or destroy Palestinian homes, property, and essential civilian infrastructure. Israeli authorities and private Israeli settler organizations in collaboration with Israeli authorities have established some 200 Jewish -only settlements that house over 600,000 Israeli citizens.1
The broader settlement enterprise to create and sustain illegal settlements, pursuant to Israel’s policy of settling its civilians in the Occupied Palestinian Territory, is in direct contravention of international humanitarian law. This was reaffirmed by an advisory opinion from the International Court of Justice in 20042 as well as UN Security Council Resolution 2334, adopted on December 23, 2016, which reiterates previous Security Council resolutions calling on Israel to cease all settlement activities in the Occupied Palestinian Territory.3
The United States government, as a party to the Fourth Geneva Convention and under customary international law, has a duty to not encourage or recognize violations of international humanitarian law or peremptory norms and must also act to end violations of international humanitarian law.4 The United States government’s obligation prohibits not only explicit recognition of an illegal situation but also extends to actions that would simply imply recognition.5
Tax-exempt nonprofit status allows U.S.-based 501(c)(3) entities and their U.S.-based donors to receive an effective subsidy from the U.S. government to support serious breaches of international law and violations of internationally recognized human rights related to the expansion of the illegal Israeli settlement enterprise. Granting and sustaining 501(c)(3) status recognizes and supports this unlawful conduct that is contrary to existing U.S. obligations under international law and established U.S. public policy.
The Central Fund of Israel (CFI), a U.S.-based 501(c)(3) entity registered in New York State, is among several U.S.-based groups fueling the dispossession and displacement of Palestinians to make way for Jewish Israeli settlers. The groups’ tax-exempt nonprofit status means their donors receive a form of valuable support from the U.S. government in their efforts to bolster the settlement movement. For example, recent reporting shows that CFI provided funding for nearly the entire budget of the Israel Land Fund (ILF), an organization that is a driving force behind the forced evictions of Palestinian families in the Sheikh Jarrah neighborhood of occupied East Jerusalem.6
More broadly, CFI has distributed at least $75 million in funding since 2015 and it’s grantees are notable for their essential role in supporting and enabling the illegal Israeli settlement enterprise, including international crimes such as forcible transfer, the unlawful appropriation and destruction of property, and Israel's discriminatory military and housing, land, and property legal regimes, among other violations. The grantees include settler organizations whose mission is to identify and “redeem” land from Palestinians (the Israeli settlement movement’s term for transferring land from Palestinian possession to Jewish possession); organizations that support the erection of new structures and projects to develop new settlements and expand existing ones, or that develop activities for the purpose of preventing the Palestinian population from accessing properties or land for farming or for other purposes; and organizations that facilitate the Israeli authorities’ unlawful appropriation of Palestinian property.
CFI, however, is not alone in benefitting from U.S. tax exempt 501(c)(3) status to bolster illegal Israeli settlements and other violations of international law. From 2009 to 2013, U.S. charities reportedly funneled over $220 million to Israeli settler organizations, according to a 2015 Haaretz investigation.7 These organizations include American Friends of Beit El, a foundation headed by former U.S. Ambassador to Israel David Friedman that raised tens of millions of dollars for one of the most prominent, illegal settlements in the West Bank;8 extreme far-right groups like Qomemiyut, which advocated for the destruction of Gaza;9 the Hebron Fund, which is dedicated to supporting Israeli settlers and soldiers in the occupied West Bank city of Hebron by “keeping Hebron in Jewish Hands” and strengthening the security apparatus of settlements;10 and likely hundreds of other organizations fueling the displacement of Palestinians.
CFI and other private actors that fund the Israeli settlement enterprise are receiving concrete benefits and recognition from the Department of the Treasury and its largest bureau, the Internal Revenue Service (IRS), while acting in direct contradiction to the United States government’s long-standing public policy position opposing the development and expansion of Israeli settlements within occupied territory.11 Charitable purposes, by definition, cannot be unlawful or aid and abet serious breaches of international law or internationally recognized human rights, and U.S. -based entities must be prohibited from using federal tax law to help perpetrate violations against Palestinians in direct contravention of both international law and the basic principles behind U.S. charitable law.
We are seriously concerned that conferring the benefit of 501(c)(3) status to these entities is in violation of the United States government’s international law obligations to not explicitly or implicitly recognize violations of international humanitarian law or peremptory norms. As systemic discrimination inherent in Israeli government policies denying basic human rights to all Palestinians under its control are increasingly recognized as so severe that they amount to the crimes against humanity of apartheid and persecution .12 As such, we urgently request that the Department of the Treasury take all necessary measures to increase scrutiny and due diligence on organizations such as CFI to ensure that no U.S.-based entities receive the benefit of 501(c)(3) tax-exempt status where there is credible information their actions are supporting violations of international law. Accordingly, we call on you to answer the following questions by August 22, 2021:
1. Do you intend to examine the 501(c)(3) status of CFI and other charities that support illegal settlement activity in the occupied West Bank, including East Jerusalem? If so, please describe your plan to do so. If not, please provide an explanation detailing why this clear violation of U.S. law does not merit examination by your Department.
2. Will Treasury issue a clear statement or promulgate a policy regarding the permissibility of 501(c)(3) organizations to aid and abet unlawful conduct in occupied territory, including support to Israeli settlements, or illegal conduct under international law? If so, please provide a timeline for this action and share said statement or policy with our offices once it is made public.
3. Can you commit to making public IRS procedures around 501(c)(3) organizations where credible information exists of involvement in violations of internationally recognized human rights and serious breaches of international law in any occupied territory?
4. Can you commit to providing the members of the Foreign Affairs Committee of the House of Representatives and the Committee on Foreign Relations of the Senate with a comprehensive list of American charitable entities operating directly or indirectly in any occupied territory on a biannual basis?
5. Can you commit to assessing the compliance of 501(c)(3) organizations operating in any occupied territory with U.S. law to ensure that the U.S. government, by providing 501(c)(3) status to these organizations, is not recognizing or furthering violations of international humanitarian law or peremptory norms, including but not limited to activities supporting the illegal Israeli settlement enterprise in the occupied West Bank, including East Jerusalem? If so, to the extent further information is needed to assess the lawfulness of the conduct of a particular organization, will you commit to work with the Department of State and all relevant U.S. Embassies and Consulates to help the IRS acquire all necessary information?
We appreciate your urgent attention to this issue. We look forward to your response and working with you to enhance due diligence and compliance measures to ensure that U.S.-based entities supporting the illegal Israeli settlement enterprise are prohibited from obtaining 501(c)(3) status under federal tax law.
1 See Statistics on Settlements and Settler Population , B’TSELEM (Jan. 16, 2019), https://www.btselem.org/settlements/statistics.
2 The International Court of Justice, in its Advisory Opinion on the Legal Consequences of the Wall, concluded that settlements , coupled with the construction of the wall inside the occupied West Bank, were a breach of the right to self -determination, a peremptory norm that gives rise to third state obligations. See International Court of Justice, Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion (9 July 2004), https://www.icj-cij.org/public/files/case-related/131/131-20040709-ADV-01-00-EN.pdf.
3 U.N. Sec. Council Res. 2334, U.N. Doc. S/RES/2334 (December 23, 2016), https://www.un.org/webcast/pdfs/SRES2334-2016.pdf. Pursuant to Article 25 of the Charter of the United Nations, U.N. Security Council resolutions are legally binding onmember states.
4 International Committee of the Red Cross, Customary International Humanitarian Law, Vol I: The Rules, Rule 144, https://ihl - databases.icrc.org/customary-ihl/eng/docs/v1_rul_rule144
5 See International Court of Justice, Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion (9 July 2004), https://www.icj-cij.org/public/files/case-related/131/131-20040709-ADV-01-00-EN.pdf
6 Alex Kane, Tax-Exempt US Non-Profits Fuel Israel Settler Push to Evict Palestinians. The Intercept, May 14, 2021. Available at: https://theintercept.com/2021/05/14/israel-settler-evictions-jerusalem-nonprofits/
7 Uri Blau. Hareetz Investigation: US Donors Gave Settlements More Than $22 Million in Tax -Exempt Funds Over Five Years. Hareetz, December 7, 2015. Available at: https://www.haaretz.com/haaretz-investigates-u-s-donors-to-israeli-settlements-1.5429739
8 Judy Maltz. Fund Headed by Trump’s Israel Ambassador Pumped Tens of Millions Into West Bank Settlement. Hareetz, December 16, 2016. Available at: https://www.haaretz.com/israel-news/.premium-fund-headed-by-trump-s-ambassador-raised-millions-of-dollars-for-settlement-1.5474789; Josefin Dolsten, At NY Gala Supporting Israeli Settlements, Plenty of Love for Trump to Go Around. Times of Israel, December 5, 2018. Available at: https://www.timesofisrael.com/at -gala-supporting-israeli-settlement-plenty-of-love-for-trump-to-go-around/
9 Ron Kampeas. Charity Headed by David Friedman, US Envoy to Israel, Gave Money to Extremist Grou p. Jewish Telegraphic Agency, May 11, 2018. Available at: https://www.jta.org/2018/05/11/united -states/charity-headed-david-friedman-us-envoy-israel-gave-money-former-terrorist-group
10 The Hebron Fund, available at: https://hebronfund.givecloud.co/donate
11 For a collation of all the US Government positions outlined below, see: Churches for Middle East Peace ‘Statements from U.S. Government Officials Concerning Israeli Settlements’ available at: https://cmep.org/wp-content/uploads/2017/04/SettlementStatements.pdf
12 Human Rights Watch, A Threshold Crossed: Israeli Authorities and the Crimes of Apartheid and Persecu tion, (April 27, 2021), https://www.hrw.org/sites/default/files/media_2021/04/israel_palestine0421_web_0.pdf .