U.S. pro-Israel groups failed to disclose grants from Israeli government
Israeli Prime Minister Benjamin Netanyahu speaks to the Christians United For Israel (CUFI) summit in Jerusalem, hosted by US televenangelical pastor John Hagee on March 8, 2010. Image by GALI TIBBON/AFP via Getty Images
By Aiden Pink August 31, 2020
More than half of all American states have passed laws designed to combat the Boycott, Divestment and Sanctions movement against Israel. No advocacy group was more important to this push than the Israel Allies Foundation, an American non-profit that supports a network of pro-Israel legislators across the globe.
It was the IAF that in 2014 connected a South Carolina politician with an Israeli legal scholar who drafted the first bill to ban state agencies from contracting with entities that boycott Israel.
After that law passed in South Carolina in 2015, the IAF successfully lobbied for nearly-identical anti-BDS bills in 25 other states, including Florida, Pennsylvania and Arizona. Now the group is backing another bill, which has already passed in South Carolina and Florida and been introduced in six more states, which would change civil-rights codes to define antisemitism to include anti-Zionism.
Public records obtained by The Forward show that the Israeli government approved a grant of more than $100,000 to the Israel Allies Foundation in 2019. The IAF has not disclosed this or any previous Israeli grants to the United States government, in possible violation of laws requiring American political advocacy groups to disclose foreign-government contributions.
The IAF, which reported $1.4 million in revenue in 2018 and features a testimonial on its website from Vice President Mike Pence, did not respond to four emails seeking comment.
It is one of 11 American groups that received Israeli government funds, according to the documents, which show that the Israeli Ministry of Strategic Affairs and a quasi-governmental organization it created have given at least $6.6 million to U.S. organizations since 2018. These grants, along with millions more that went to groups in Europe, Latin America, Africa and Israel itself, were to further the country’s public diplomacy efforts, particularly against BDS.
The Israeli government’s gifts to pro-Israel American entities — including more than $1 million each to Christians United for Israel and Aish Hatorah’s Hasbara Fellowships — were publicly unknown until the last few weeks, after a politician not from Prime Minister Benjamin Netanyahu’s party took over the ministry and dropped its longstanding stance against releasing its public records.
According to the Israeli documents, most of the grants to the American organizations were intended to send those groups’ members — and selected guests — on chartered trips to Israel, which often included meetings with Israeli officials. Spending these funds abroad, rather than inside the United States, may have allowed them to avoid onerous federal disclosure requirements designed to thwart foreign influence campaigns.
But documents also suggest that some of those trips included instructions for pro-Israel advocacy back home — in statehouses and on college campuses — which legal experts say may expose not just the recipient groups but also anyone who went on their trips to fines and even prosecution for violating disclosure rules.
The documents, which include financial spreadsheets, government memoranda and the minutes of official meetings, were released after a Freedom of Information Act request by the Israeli Freedom of Information Movement and the Israeli news website The Seventh Eye , and shared with the Forward.
Many foreign countries try to influence U.S. policy and public opinion, and Israel is no exception. But lobbyists paid by foreign governments are required to register with the Department of Justice and disclose whom they work for, whom they meet with or write to, how much they’re being paid, even what’s printed on their pamphlets.
The law that governs this activity is the Foreign Agents Registration Act, or FARA. It was passed in the 1930s to thwart pro-Nazi propaganda conducted by Americans who were secretly supported by the Third Reich. It exists so that the public can know “whose benefit people are acting on behalf of,” said Amos Jones, a Washington lawyer who specializes in FARA cases.
Many American political advocacy groups reject foreign-government donations, both to avoid accusations of foreign influence and to avoid the cumbersome FARA disclosure process.
FARA — which experts said was designed to be intentionally broad — governs “any person who acts as an agent, representative, employee, or servant, or otherwise acts at the order, request, or under the direction or control of a foreign principal.” The law calls for up to five years in prison and fines up to $250,000 for failure to disclose.
While the law was once rarely enforced, there have been several prominent FARA cases in the past few years. As part of their plea deals, former Trump campaign chairman Paul Manafort and former National Security Advisor Michael Flynn both admitted to improper compliance with FARA.
Many of the payments that Israel made to the IAF and the other American groups were delivered through an organization that was set up, an Israeli official acknowledged in a Knesset hearing this summer, to mask the money’s source. But several experts said that the existence of such an intermediary does not remove the disclosure requirements.
“They can have all the shell companies they want or whatever you want to call it,” said Jones, one of three FARA lawyers who were interviewed for this article. “If that is a foreign organization or group of people, then they can be a foreign principal, thereby requiring persons acting under their direction inside the United States to have to register.”
The other two FARA lawyers concurred with Jones’ assessments.
The ministry’s workaround: a company called Concert
Israel’s Ministry of Strategic Affairs was once a backwater agency with unclear purpose. That changed in 2015, when it was placed under the control of the hard-charging, hawkish Gilad Erdan, who convinced Netanyahu, a fellow member of the Likud Party, to quintuple the ministry’s budget and add fighting BDS to its portfolio.
Ever since, the ministry has been tasked with waging war in the battle of public opinion against Israel’s critics, especially on social media. It has fought in court to keep some of its activities classified, but it has also published dossiers on pro-BDS activists and hired an Israeli influencer popular on the U.S. college-lecture circuit as a consultant.
But as the Forward previously reported, Erdan found that when the ministry offered money to Jewish-American groups in 2017, it was often rebuffed — out of concern about the FARA disclosure requirements, that they’d be accused of “dual loyalty,” or that the grants would complicate their claims that they represent American Jewish interests, which are often similar but not identical to Israeli ones. Such refusals included several prominent American Jewish groups like the Jewish Federations of North America and the Jewish Council of Public Affairs. A spokesperson for the Anti-Defamation League said this month that it, too, had turned down a grant. One official whose organization was solicited, speaking on the condition of anonymity, said that the Israelis were “anxious and frustrated” by the rejections.
A ministry spokesperson declined to answer questions for this article. Instead, the official sent a three-sentence statement saying that its activities “are done in a legal and professional manner, including informing the relevant authorities on issues such as FARA, and is conducted according to the letter of the law.”
By December 2017, the ministry largely stopped trying to directly give money to major Jewish advocacy organizations. Instead, it helped create a “public-benefit company” to fight BDS — and put a buffer between itself and the American groups. The company was originally called Kela Shlomo, or Solomon’s Sling, but less than a year later, its name was changed to Concert. In keeping with their penchant for secrecy, officials in the ministry and the company refused to explain the name change to journalists.
The ministry pledged to match private donations to Concert, up to $37.5 million over four years. The company’s sole purpose was to provide grants to Israeli and Diaspora advocacy groups. It had an independent board, but its steering committee was chaired by the ministry’s director-general.
This approach meant potentially doubling the amount of money available for the cause, by consolidating private and public funds, and creating an entity much nimbler than the Israeli government to quickly respond to BDS victories or social media spats.
Ronen Manelis, the ministry’s new director, also said this summer that the strategy was designed in part to make it easier for American groups to accept the grants, because Concert’s ties to the Israeli government, while not secret, were also not well known.
“The understanding was that it would be easier for them to come to terms with a public-benefit company than with an action that the Israeli government is behind,” Manelis testified in July at a Knesset oversight hearing. “In the end, you see a bank transfer from a non-profit organization, and not a bank transfer from the Israeli government. That’s the idea.”
Gilad Erdan, seen observing a military drill in 2013. Image by Ilia Yefimovich/Getty Images
In the end, Concert granted around $10.5 million, a little more than half of which went to American groups. Several groups got more than $1 million each; the smallest grant was $15,000.
A spokesperson for Concert also refused to answer The Forward’s questions, but said in a statement that the organization “conducts all of its activities with its partners according to FARA regulations and the law, and as such reports to the relevant authorities and entities.”
The company’s internal documents identify some organizations it funded, but others are redacted. The language describing those beneficiaries’ activities is vague: “defensive and offensive” campaigns, research on “corporate responsibility,” “amplification units” that would provide “support for organizations in a pro-Israeli network.”
But Concert’s internal communications also show frustration that many American pro-Israel groups still refused to take its money, seeing it as essentially a pass-through for government funds.
That refusal made sense to several lawyers interviewed who help clients comply with FARA. “That entity would count as a foreign principal,” said Jones, using the language of the disclosure law.
None of the American organizations known to have taken money from Concert, or from the ministry directly, have filed FARA paperwork with the Department of Justice. At first glance, most are able to avoid this disclosure because the payments were designated for activities outside the United States — but in some cases, the details raise questions.
There is also one unusual situation, in which a well-known pro-Israel group, StandWithUs, was apparently granted Concert funds unknowingly — and now plans to reject the money rather than potentially be exposed to a FARA investigation.
That situation began in June 2019, when Robert Kraft, the owner of the New England Patriots, won the $1 million Genesis Prize, which honors individuals for their “accomplishments and commitment to Jewish values.” Kraft, who at the time was fighting charges of soliciting prostitution, said that he would donate the money to organizations fighting antisemitism and BDS.
Robert Kraft gives a speech on stage during the Genesis Prize ceremony at The Jerusalem Theater on June 20, 2019 in Jerusalem, Israel. Image by Lior Mizrahi /Getty Images for Genesis Prize Foundation
The Genesis Prize Foundation solicited applications and, in June 2020, announced 26 groups to receive part of the prize, including StandWithUs, which is based in California. The Seventh Eye, the Israeli journalism outlet, reported that Concert had added $1.6 million to Genesis’ $1 million to expand the pie.
Told of Concert’s involvement, Roz Rothstein, chief executive of StandWithUs, said earlier this month that the group might have to turn down its grant, which it had not yet received.
“We thought the funds were coming from Robert Kraft, so we will need to look into it,” Rothstein said in a statement. “We have not accepted any funds from the Israeli government so there is no reason for us to register” under FARA.
Delegations to Israel
One of the most prominent beneficiaries of Concert funds — and of the foreign-travel disclosure loophole — was Christians United for Israel, the largest pro-Israel group in America, which was awarded nearly $1.3 million in February 2019 for 10 week-long pilgrimages to the Holy Land, each containing 30 of what Concert documents call “influential Christian clerics from the U.S.” Concert’s board also approved hundreds of thousands in subsidies for trips run by smaller groups, such as the America-Israel Friendship League.
CUFI did not respond to a request for comment. AIFL executive director Wayne Firestone said that Concert had given them approximately $33,000 for one of its trips — around a third of the amount the Israeli company approved. Firestone also said that he didn’t know Concert was a subsidiary of the ministry, that no amount of the grant was spent inside the United States, and that his group didn’t believe it needed to register under FARA.
FARA experts said those groups needn’t have disclosed the grants if they were indeed solely for travel. But minutes of Concert’s board meetings suggest that some groups’ activities in Israel were closely tied to the politicking on American soil that is the heart of FARA.
For example, in discussing the Israel Allies Foundation in January 2019, Concert’s board noted with approval that the group “has many achievements in promoting pro-Israel policy and legislation,” specifically citing the anti-BDS state laws. The board then approved a grant of $118,000 for the foundation to hold a conference in Israel “with the organization’s top lobbyists to enable the concentration of efforts and the construction of a common strategy among all members.” Attendees would also meet with Israeli leaders, from whom they would be “expanding and deepening the relevant knowledge, creating and strengthening ties.”
FARA experts consulted by the Forward said that if such knowledge-expanding involved Israeli leaders telling IAF staff or American lawmakers what strategy Israel preferred, it could leave the group and perhaps the individuals liable for FARA registration. The fact that a request was made outside the United States would not matter if it was related to activities back home, they explained, especially since the Israeli government had helped pay for the trip.
In December 2019, the IAF indeed held a conference in Jerusalem, convening 24 lawmakers from 21 countries, including one American: state Rep. Alan Clemmons, the original sponsor of the IAF’s anti-BDS law in South Carolina.
The attendees met with several Israeli leaders, including Netanyahu; the opposition leader, Yair Lapid; and a member of Knesset named Orit Farkash-Hacohen, who five months later became Minister of Strategic Affairs. They also met with Eugene Kontorovich, the Israeli lawyer who wrote the anti-BDS law that Clemmons and the IAF had helped get passed back in 2015.
Clemmons, who was first elected in 2002, is also on the board of the American Legislative Exchange Council, a group that creates and disseminates “model legislation” to a network of conservative politicians around the country. After the success of his anti-BDS campaign, Clemmons was focused on getting colleagues in other states to pass bills equating anti-Zionism with antisemitism, as he had already done in his state.
In the two months after the IAF conference in Jerusalem, legislators introduced such bills in eight statehouses. In five of them, the bill’s primary sponsor is, like Clemmons, involved with ALEC.
Clemmons abruptly resigned in June, a month after winning his party primary, saying he wanted to spend more time with his family. In July, he was appointed to the board of the state’s Revenue & Fiscal Affairs Office. He did not respond to a request for comment.
Campus advocacy
Documents also show that Concert in May 2019 gave more than $1 million to support Hasbara Fellowships, the program run by the Orthodox group Aish Hatorah that takes college students to Israel and trains them to advocate for the Jewish state on campus. Concert’s subsidy followed a similar grant, of $882,000 from the Strategic Affairs Ministry to Aish in 2016.
“The ministry is satisfied with the activities of the organization that creates the necessary infrastructure for pro-Israel activities on U.S. campuses and with the training of students for this activity,” Concert said in a May 2019 memo, making clear the connection between Hasbara’s Israel tours and their participants’ campus activism, as well as the ties back to the Israeli government.
Aish Hatorah and Hasbara Fellowships did not respond to requests for comment.
A review of Hasbara’s website does not show any indication that it is backed by the Israeli government (unlike, say, Birthright Israel, which is open about the subsidies it receives). Nor has Hasbara, or its parent group, Aish Hatorah, filed FARA disclosures.
If the trips were solely to educate students about Israeli history, culture, and even politics, Hasbara Fellowships would not need to register under FARA. But if those trips contained instructions for how participants should conduct pro-Israel campus activities, lawyers interviewed for this article said, they could be investigated as unregistered agents of a foreign principal.
Public records and politics
The reason so much about Concert’s activities are coming to light is that the Ministry of Strategic Affairs’ leadership changed once Israel finalized its new coalition government in May. Erdan of the right-wing Likud, who had run the ministry since 2015, was given the much higher-profile role of representative to the United Nations, with a promise to be the next ambassador to the United States. He was replaced by Farkash-Hacohen, of the centrist Blue and White alliance.
Erdan had argued that the ministry should be exempt from the country’s public-records laws, and spent years fighting activists and journalists seeking information on its activities. Soon after Farkash-Hacohen took office, she dropped the ministry’s objections, allowing years of Erdan-era documents to be released.
Among the things they show is that Concert never quite lived up to its promise.
Finding private donors proved difficult, in part because of FARA concerns, so Concert only ever got $5.2 million in matching grants from the ministry, about 15% of the originally allocated $37.5 million.
Concert’s performance was “unsatisfactory,” Manelis, the ministry’s new director-general, told the Knesset oversight hearing this summer. Concert’s activities are thus expected to be revamped, Haaretz reported.
Still, the combined public and private funds gave Concert a total of around $10.5 million – at least $6 million of which was given to American groups. Whatever the group’s future, the ministry maintains the portfolio of fighting BDS and the delegitimization of Israel around the world.
“The ministry will continue to work with the pro-Israel network in tackling some of the biggest issues facing the Jewish People and the Jewish State through legal means and partnerships wherever possible,” it said in a statement.
But if more funding of American groups is brought to light – whether via Concert or the ministry itself – questions will likely continue about their legality under American law.
“The U.S. and Israel are two different countries,” said Jones, the FARA attorney, adding that the fact that they’re allies is “not supposed to” change the enforcement of the law.
Molly Boigon contributed reporting.
Aiden Pink is the deputy news editor of the Forward. Contact him at pink@forward.com or follow him on Twitter @aidenpink
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