June 5, 2003

Commissioner Mark W. Everson
Internal Revenue Service
Washington, DC 20224

RE: Request for injunction and investigation against Americans for Peace Now for illegally utilizing U.S. charitable contributions for matters of Israeli politics, violation of Internal Revenue Service Code 501(c) and other matters.

Dear Mr. Everson:

I am writing to you to request an immediate injunction and investigation of the activities of Americans for Peace Now [hereafter referred to as APN], a front organization for the Israeli based Peace Now [hereafter referred to as PN] political organization.

APN is a non-profit Internal Revenue Code (IRC) 501(c)(3) tax-exempt charity organization located at 1815 H Street, NW Suite 920 Washington, DC 20006. Entities organized under this section of the IRC receive preferential tax status so that their income is either totally or partially exempt from federal taxation. In order to qualify for this preferential tax status, this organizations must abide by specified limitations on their political activity. According to fillings with your agency, their mission is one of “education.” However, both the APN and their Israeli based sister group PN, have a long history of pro-Arab political activism, and they work hand-in-hand to bring about their political message. PN is a political activism group whose propaganda is directly focused on influencing Israeli political candidates, as well as swaying voters of the State of Israel through United States tax deductible funds raised and provided by APN.

The United States Federal Election Campaign Act (FECA), as well as the regulations and rulings of the Federal Election Commission, set limits for certain kinds of activities. FECA prohibits both for-profit and nonprofit organizations from engaging in campaigns for political candidates. Both federal tax law and FECA law and regulations prohibit nonprofit organizations from engaging in political activity that supports a candidate for public office, even nonpartisan office. What APN is doing is funding an organization outside of the United States which is advancing its political agenda through lobbying, and public persuasion. If it is prohibited in the United States, how much more so should it be when an American nonprofit group facilitates it in a foreign country?

According to APN, its purpose is to “Educates Americans about the Middle East peace process to create an informed and empowered pro-peace American public.” Conversely, what APN is actually doing is acting as a front for PN activities, and funneling United States charitable dollars for political activism to a foreign country. The APN clearly states in their official charter that their cause is to “support the activities of Shalom Achshav [Peace Now].”

The United States government is directly assisting the funding of PN in Israel, through their Federal Employee Campaign-Overseas (CFC-O). This is a program which allows U.S. government employees to donate funds to APN which is listed on their official documents “Americans for Peace Now (0438).” This is a program of the Department of Defense approved and endorsed by both Richard B. Myers, Chairman of the Joint Chiefs and Donald H. Rumsfeld, Secretary of Defense.

It has recently been widely reported in the Israeli media that APN was a major illegal source of funding for the campaign of former Israeli Prime Minister Ehud Barak. Yossi Sarid, a member of the Israeli Knesset himself–and Peace Now joined forces with “Ehud Barak, and became an integral part of his election campaign in 1999.” Only after he was elected did the close connection between Peace Now and Barak’s election headquarters become known, in the context of the nonprofit organizations affair. They had a dilemma of how to prepare their books to demonstrate funding was legal, so Musi Raz, then the head of Peace Now and now a Knesset member for Meretz, suggested that Haim Mandel Shaked solve the funding problem by raising funds from “American Friends of Peace Now”. “Everything remained confidential because Peace Now was prohibited from any involvement in party politics. Immediately afterwards, Haim Mandel Shaked told the poster campaign operations people, “We have the funding. Ask Musi Raz.” “The amount was about $100,000,” Musi Raz confirmed to me. A source in Barak’s 1999 election headquarters says, “The campaign funded by Peace Now was Ehud Barak’s campaign.”

These PN activists have had multiple conflicts with the Israeli police, and violence has been known to break out on more than one occasion at events where PN was expressing its political opinion. Using money funneled from the United States, they are able to seek permission to cross into the United Nations “Green Line” of Israel, in the disputed territory, and launch strong political rallies which may have an impact on peace in the Middle-East. These rallies which are being illegally funded by American dollars have the potential to damage President Bush’s Road Map to peace.

In Israel, PN facilitates their propaganda at large meetings and massive political rallies, many times led by elected Israeli politicians and party leaders. These are not educational activities. What APN is doing is financially backing political activism in Israel bent on swaying the Israelis voters to vote for specific political parties and agendas. Many of these rallies, some which have had upwards of 150,000 people in attendance, are endorsed and attended by partisan members of the Israeli government. The actions of APN are thus a clear and illegal violation of the IRC 501(c)(3) which states:

“no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation.and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”

Over the last five years APN has collected tax deductible donations from United States citizens and provided the Israeli PN organization at least $3,830,295 USD to be used for political means. The money is accepted in Israel by Shalom Achshav [Peace Now in Hebrew] and used for its “Education” fund. Donations sent to Israel are as follows:

2001 $452,833 USD. (IRS Form 990 Part II, Line 22).
2000 $763,750 USD. (IRS Form 990 Part II, Line 22).
1999 $1,041,374 USD. (IRS Form 990 Part II, Line 22).
1998 $695,500 USD. (IRS Form 990 Part II, Line 22).
1997 $876,838 USD. (IRS Form 990 Part II, Line 22).

High ranking officials of the Israeli Knesset (government) have been apprehensive of PN for many years. Knesset member Ophir Pines-Paz, wrote an op-ed piece in Ha’aretz newspaper calling PN, “a small extremist movement.” It was reported in the Israel press that Knesset member Kleiner accused the PN organization of advancing the Arab agenda by offering incentives for Jews to accept monetary compensation to leave their homes. Kleiner added the PN activists were in essence assisting terrorism by bringing about the transfer of Jews from their homes. One Israeli report recently made reference that the American based AFP was not a “support group” for the Israeli PN movement-but was its “home office.” In reference to another American based front group who was funneling American charitable dollars out of the country, New York Attorney General Eliot Spitzer wrote to the IRS in October of 1999 stating: “The misuse of charitable status to funnel money to a non-charitable organization is illegal and abhorrent.”

Under U.S. law, any person or group may establish an organization with charitable purposes, and the creators of the organization are free to choose any charitable endeavor they wish to pursue. If the organization applies to the IRS for recognition of tax-exempt status, and shows that it meets the requirements of Section 501(c)(3) of the IRC, it will be recognized exempt until it ceases to exist or until the IRS determines it no longer meets the requirements and revokes exempt status. A charity may have its Section 501(c)(3) application denied or its existing tax-exempt status revoked by the IRS if it does not comply with these standards. A “revocation” means that the organization becomes taxable and that donors will receive no tax benefits from contributions to the organization. As a citizen of the United States I am writing this formal complaint to inform you of APN’s violation of the IRC 501(c)(3). It is quite apparent that U.S. charitable dollars are being misused to finance PN’s internal political agenda in Israel, using APN as a front group to raise money. I am requesting an immediate suspension of APN’s assets, and a full investigation. I ask that your office follow up with me on this matter which is in the public interest.

Respectfully yours,

Sent via email and registered U.S. mail

[Name withheld]

Internal Revenue Service
Criminal Investigation Division
Philadelphia, PA 19255

The Honorable Congresswoman Eleanor Holmes Norton
2136 Rayburn House Office Building
Washington, D.C. 20515

Assistant Director in Charge
Van A. Harp
Federal Bureau of Investigation
601 4th Street, N.W.
Washington, D.C. 20535-0002

The Honorable Thomas F. Hogan
Chief Judge, U.S. District Court for the District of Columbia
E. Barrett Prettyman U.S. Courthouse
333 Constitution Avenue, NW
Washington, DC 20001

The Honorable Congressman Tom Feeney
323 Cannon House Office Building
Washington, D.C. 20515-0924