Does fundraising for settlers violate US law?

The New York Times article highlighting the tax-exempt status that American groups who raise funds for illegal settlements in the West Bank have reports that money that goes to “schools, synagogues, recreation centers and the like” are legitimate expenditures under U.S. law. What’s legally questionable, the Times reports, is “housing as well as guard dogs, bulletproof vests, rifle scopes and vehicles to secure outposts deep in occupied areas.”

But according to a American-Arab Anti-Discrimination  Committee statement,  all of the fundraising that goes to establishing settlements could be illegal. The group states:

Research by ADC has uncovered that these NGO’s are engaged in discriminatory practices by funding projects and activities which cannot be used by Palestinians.  Such discriminatory practices are against American public policy, and NGO’s are prohibited from engaging in such activity as described in the US Supreme Court Case of Bob Jones University v. The United States.

The Bob Jones Supreme Court case , decided in 1983, ruled that organizations may have their tax-exempt status revoked if their fund-raising goes to activities that contradict established public policy. Bob Jones University ‘s tax-free status was revoked because the school denied admission to applicants involved in interracial relationships.

In the case of groups raising money to fund illegal settlements in the occupied territories, the ADC argues that no matter where the money goes, whether it’s a school or a bulletproof vest, the funds are used to entrench discriminatory policies that exclude Palestinians for the sole reason that they are not Jewish. “Such discriminatory practices are against American public policy, and NGO’s are prohibited from engaging in such activity,” the ADC states.

The question is whether the Bob Jones precedent would apply to an issue that is deeply intertwined with American foreign policy. In addition, is it actually established public policy that the U.S. does not support settlements that, by default, engage in racially discriminatory policies? It’s a murky area. While it’s true that every American presidential administration has publicly opposed the construction of settlements on Palestinian land, that doesn’t necessarily make it established policy. Furthermore, the Bush administration undermined past presidents’ policies (minus Reagan, who said that settlements are “not illegal) on settlements in a private letter to then-Israeli Prime Minister Ariel Sharon that  “gave the Jewish state permission to expand the West Bank settlements that it hopes to retain in a final peace deal.”

In the end, though, what is needed is a law that bans fundraising for activities that violate international law.  Fat chance.

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