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Will lawsuit against New Israel Fund chill progressive fundraising?

A case currently pending in the New York District court has the potential to undermine fundraising for progressive causes and intensify polarization within the American Jewish community.

At issue is a complaint filed with the Internal Revenue Service by New York attorney David Abrams, a self-described “passionate pro-Israel Zionist” and founder and president of The Zionist Advocacy Center (TZAC). Abrams alleges that the New Israel Fund (NIF), one of the largest U.S.-based non-profits providing grants to progressive Israeli civil-society organizations, has committed fraud and violated its tax-exempt [501(c)(3)] status because at least six of its grantees have engaged in “electioneering,” which is a violation of this tax status.

The American Civil Liberties Union (ACLU) has signed on to represent the NIF pro bono, because, staff attorney Brian Hauss said in a Zoom-interview, “Abrams’ far-fetched interpretation of the Internal Revenue Code would bankrupt non-profits for their work defending the ground rules of democracy.”

Abrams brought his suit as qui tam action, in which a private party, in this case acting as a whistleblower, may bring an action on the government’s behalf. Abrams is seeking $100 million in damages from the NIF. If his suit is successful, he could be entitled to as much as 30% of that sum.

Hauss contends that Abrams’ case is “loopy” and little more than a SLAPP suit — an acronym for “strategic lawsuits against public participation” — which are often used to intimidate and silence criticism by creating expensive baseless legal proceedings.

The complaint is currently in various rounds of motions to dismiss and reply briefs, the last of which the ACLU filed in late September. The State of New York has filed a statement of interest in which it expresses views regarding the proper application of the New York False Claims Act that can be interpreted, according to Hauss, as consistent with the positions taken by the ACLU.

According to both Abrams and Hauss, no ruling on dismissal of the case is expected before the beginning of November, and perhaps much later.

But the case, Hauss said, could damage the NIF and set “dangerous precedents” even if Abrams loses in the long run.

“If the court does not dismiss the case outright,” he explained, “then the NIF will be forced to proceed with discovery, which is costly and invasive to its privacy. Cases like these create a chill factor, causing progressive organizations to pull back from their ideologies and the important work that they do and dissuading donors from contributing.”

Indeed, Abrams’ suit against the NIF has already raised concerns within the Jewish philanthropic community, said Andres Spokoiny, president and chief executive officer of the Jewish Funders Network. “Historically, Jews have sued each other over property, ownership, governance, and that is legitimate. But on both the left and the right, we should not fight ideological battles in court. I’m all for a vigorous debate about the legitimacy of the NIF or any other organization, but it is more productive that this debate take place in the community’s public square of ideas.”

“When ideological battles are fought in court,” Spokoiny warned, “the debate is constricted and all sides lose.”

Abrams insisted that he is not motivated by the money, but rather by commitment to the law. “I am not making any out-of-court statements about whether NIF or anyone else has violated the law,” he said. “As an American citizen, I do not believe that any organization should be meddling in Israeli elections.”

However, in an article published in the journal Justice, the International Association of Jewish Lawyers and Jurists, Abrams pointed to other, ideological, reasons for this and similar lawsuits that he has brought in the past, writing “…there is a serious problem among some so-called ‘humanitarian organizations’ of anti-Israel bias and anti-Israel activities…I support the right of everyone to criticize Israel. Unfortunately, among many of these NGOs – perhaps most – such criticism has drifted into double-standards, demonization, and/or outright support of the various terrorist organizations that make up most of Israel’s enemies.”

Daniel Sokatch, chief executive officer of the NIF, said the court case is meant to silence legitimate criticism, even among those who support Israel.

“There is a perverse irony that Abrams is targeting NIF,” he said, “which is made up of people who love and care for Israel. Someone is not anti-American if they oppose the direction that the United States is taking now, any more than they were anti-American if they opposed the directions that Barack Obama was taking the country. These are ideological issues, but he wants to delegitimize any ideology except the right-wing, ethno-nationalist vision of Israel that he supports.

The case raises the question of whether, in the current polarized atmosphere in the American Jewish community, there can be any agreement as to the meaning of terms such as “pro-Israel” and “pro-Zionist.”

According to Dov Waxman, professor of Israel studies at UCLA, where he also directs the UCLA Y&S Nazarian Center for Israel Studies, there cannot.

“Activists like Abrams are trying to define these terms according to their own ideology,” he said. “They are trying to say that since their positions are ‘pro-Israel,’ then, they try to claim, individuals and groups that don’t agree with them, such as the NIF, are anti-Israel and therefore they are traitors. They are attempting to make this into a moral issue within the American Jewish community.”

Since its inception, the NIF has contributed over $250 million to progressive Israeli NGOs, said Sokatch.

“Neither the supporters of the NIF nor I will be lectured to regarding what it means to be a pro-Israel Jew,” he said. “We will not be labeled as anti-Israel because we recognize that the fate of Israel as a democratic and Jewish state is being threatened both from without and from within the Jewish community.”

Abrams founded TZAC in 2015. According to its FB page, TZAC “seeks to advocate on behalf of Israel in the Courts and before agencies.”

Through TZAC, Abrams has filed suit against a variety of organizations that he deems anti-Israel. These have included, among numerous others, the Norwegian People’s Aid, which paid a $2 million settlement rather than challenge Abrams’ claim that it had spent money on democracy training in the Gaza Strip and mine clearing in Iran in association with banned terrorist groups; to unlock listings in the West Bank Jewish settlements (which it did); and a case against former President Jimmy Carter’s nonprofit organization, The Carter Center, for providing physical support for terrorist by serving refreshments at a conflict resolution workshop in which representatives of Hamas and the Popular Front for the Liberation of Palestine, both US-designated terrorist organizations, had participated. (The complaint was dismissed.)

According to the FB page, Abrams is also currently engaged in action against UCLA regarding a 2018 Students for Justice in Palestine Conference.

These activities can be seen as part of a wider movement, including organizations such as Shurat Hadin, Lavi, and others, that use what is commonly known as lawfare, that is, use of legislation and courts, to cripple the activities of causes and organizations that they see as threatening to Israel. The efforts of the Israeli government to direct at least some of these organizations has recently been detailed in investigative reports published in Haaretz, the Seventh Eye, and The Forward.

Indeed, TZAC is registered with the Foreign Agents Registration Act (FARA) a U.S. law passed in 1938 that requires that agents representing the interests of foreign powers in a political or quasi political capacity disclose their relationship with that foreign government base well as information about finances and other activities. Acknowledging this, Abrams said he is registered with FARA because he “does volunteer work for Israel. If an Israeli organization asked me to help by presenting information to the authorities, I could be engaged to do this. And for this, I would need to register with FARA.”

“No one gives me instructions and no one is pulling my strings,” he said.

Abrams refused to state which organizations he has specified in his case and why he chose these among the hundreds of organizations that the NIF has funded since its inception in 1979.

According to an NIF representative, the organizations named in the complaint are: IRAC, the Israel Religious Action Center, which, according to its site, advances religious diversity, defends freedom of religion and works to create a broadly inclusive Israeli democracy; Tag Meir, a coalition of over 50 organizations from across the religious-secular spectrum that combats hate crimes; Zazim, which mobilizes social-political action through online campaigns; Adalah, which conducts litigation and advocacy efforts by and for Arab citizens of Israel; Mossawa, which promotes the economic, socio-political and collective rights of the Palestinian Arab citizens in Israel, and Adam Teva V’din, an environmental group.

According to the NIF’s financial report for 2019, IRAC received a grant of $100,000; Tag Meir received $75,000; Adalah received $70,000; and Zazim received $100,000. Mossawa received a grant of $40,000 in 2017 but has not received grants since; and Adam Teva V’din received $13,000 in 2014, but has not received any funding since then. In addition, these organizations received varying amounts of donor-advised groups, details of which appear in the financial reports only through 2017.

A review of the activities published by these organizations reveals that none directly supported any candidates for election, although most have issued statements of praise or condemnation for candidates’ stands on the issues they represent, and most have taken stands critical of governments’ policies over the years.

IRAC, for example, has initiated numerous appeals to the Supreme Court over women’s and religious rights, including representation of Women of the Wall, and Adalah appealed to Israel’s High Court of Justice to overturn a decision taken by the elections committee to bar certain candidates from running for office.

Hauss insisted that these activities are routine for NGOs and that “Abrams is confusing politics in its broadest sense with partisan electioneering. In fact, the tax laws actually support advocacy for values and civil and human rights, which are tax-exempt activities. In the context of the polarization between progressives and conservatives, this can be presented as partisan, but that is fundamentally wrong.”

Abrams acknowledged that the line between activities that comprise electioneering and those that do not is “blurry.”

Sokatch explained that its funding criteria do not require it to agree with every action taken by a grantee, but it does adhere to strict standards.

“We will not support any organization that calls for Israel to lose its democratic or Jewish character,” he said, “and we will not support activities that call for support for BDS (Boycott-Divestment-Sanctions). Beyond this, our philanthropy is intended to build bridges in Israeli society, even with groups that we do not necessarily agree with.”

Eliezer Yaari, a former executive director of the NIF in Israel, said that the attempts to delegitimize and limit the effectiveness of progressive NGOs are not unique to Israel. “Whatever their position, NGOs are good for society because they create thousands of jobs. However, from the point of view of governments, these NGOs also create a strong electoral base that could be a threat to the central source of power. Governments with anti-progressive tendencies leaning towards authoritarianism or totalitarianism want a single voice that supports their policies and values.”

Yaari warns that attacks on the NIF and similar organizations “are ultimately damaging to both American and Israeli society. The variety and differences of opinion in Israel are what make the society so interesting and compelling to American Jews. They are completely at one with the American ethos, which has always valued the inclusion of all voices in the public sphere. It is crucial to leave the way open for all Jews to see that they have a partner in Israel and that they can support Israel in a way that matches their values.”

lawsuit against New Israel Fund fundraising

Author

Eetta Prince-Gibson

Eetta Prince-Gibson

Eetta Prince-Gibson, who lives in Jerusalem, previously Editor-in-Chief of The Jerusalem Report, is the Israel Editor for Moment Magazine and a regular contributor to Haaretz, The Forward, PRI, and other Israeli and international publications.

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