WASHINGTON — The largest Arab American civil rights organization is petitioning the government concerning the tax benefits going to organizations actively aiding the Israeli settlements in the occupied Palestinian territories. This came after an influential Washington Post columnist observed the irony that tax breaks to these groups were undermining the American position against the Israeli colonies that dot the West Bank.

A Jewish settler holds a weapon in the West Bank Jewish settlement of Bat Ayin, near Hebron April 2, 2009. REUTERS

The American-Arab Anti-Discrimination Committee “filed multiple administrative complaints” with the Treasury Department requesting investigations into the tax-exempt statuses of organizations “using assets and income in direct violation of their addressed purpose, and to support illegal and terrorist activities abroad.”
American non-profit organizations that contribute to the public good by conducting humanitarian, social, religious or educational activities can obtain what is called 501(c)3 tax status from the United States government to allow their donors to deduct donations for income tax purposes. These rules in the tax code provide an incentive to donors to support non-profit groups.

ADC notes that the settlements violate international law, which prohibits the acquisition of territory by force. International human rights groups such as Amnesty International and Human Rights Watch concur with that assessment.

ADC claims such tax breaks rub against American law. Similarly, “it is a central part of stated U.S. policy toward the Arab-Israeli conflict that settlement expansion and construction must stop,” its statement read.

American politicians and institutions have long stipulated that American aid cannot go towards the settlements. The Congressional Research Service reported in 2005, “The United States stipulates that U.S. aid funds cannot be used in the Occupied Territories.”

Days before the ADC complaints, David Ignatius penned a column in the Washington Post pointing out the inconsistency between American foreign policy and this indirect financial aid to American settlements. He reported that 28 U.S. charitable groups made “a total of $33.4 million in tax-exempt contributions to settlements and related organizations between 2004 and 2007.”

Tax-free donations are reaching settlers through multiple avenues, Ignatius reported. Some of them are quite explicit in their work and beneficiaries. One group, called Ir David, or City of David, raised nearly $13 million in three years to “benefit the Jewish people of the Old City of Jerusalem.” It offers “aid and assistance for education, housing and the rehabilitation of distressed properties,” according to its IRS filing. This is quite clearly intended to enhance the Jewish population colonizing the Palestinian quarters of Jerusalem — a population central to the American vision of a two-state solution.

Hebron, the largest Palestinian city, is home to some of the most violent and aggressive Israeli settlers who planted themselves and supporting Israeli soldiers in the middle of its urban core. Settler support groups also raise tax-deductible monies to benefit these groups.

Ignatius also pointed out that often “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.”

A few weeks ago, the journalist and blogger Philip Weiss reported on an event at a New York synagogue where “a leader of the Israeli settlers’ group ‘Women in Green,’ called for the assassination of Mahmoud Abbas, the president of the Palestinian Authority, as a way of bringing peace to Israel.” Afterwards, she asked the crowd to make tax-deductible donations to her group “by writing checks to the Central Fund of Israel.”

Settlement groups consider their work humanitarian, according to the JTA, a Jewish news service.

Morton Klein, the president of the Zionist Organization of America, argued that complaints targeting settlers were discriminatory since they were being singled out. He also questioned the rationale, arguing “The suggestion that a Jewish minority living among a West Bank Arab majority is harming peace is false.”