Oct. 16 (JTA) — With hundreds of millions of dollars being pumped into
Palestinian non-governmental organizations by numerous private
foundations here and in Europe, government and Jewish communal
officials are raising significant questions about transparency.
is the money being used? And do major Palestinian activist funders such
as the Ford Foundation — which granted $35 million to Arab and
pro-Palestinian organizations in 2000 and 2001 alone — exercise proper
What’s more, federal agencies concerned with fighting
terrorism are increasingly asking: When money goes into one NGO’s
pocket, where does it wind up?
Earlier this year, Washington’s
fears over the loosely controlled millions streaming into Palestinian
organizations from foundations turned into action. The State Department
and the U.S. Agency for International Development began applying
President Bush’s Executive Order 13224 to American organizations
working in Palestinian areas.
Executive Order 13224 recognizes
“the pervasiveness and expansiveness of the financial foundation of
foreign terrorists” and regulates financial transactions that may end
up in the hands of those that either commit or even “advocate”
In May and June of this year, USAID informed
American tax-exempt charities it funds that if they partnered with any
Palestinian NGOs, those NGOs would be required to sign a Certification
Regarding Terrorist Financing. The certification pledges that no funds
have made or will make their way into organizations to “advocate or
support terrorist activities.”
The Palestine NGO Network, or
PNGO, an umbrella group of 90 Palestinian organizations that is funded
in part by the Ford Foundation, was outraged.
On July 12, PNGO
published a statement declaring: “Some donor agencies in the West Bank
and Gaza Strip are setting unacceptable conditions for providing
financial support to Palestinian NGOs. Such conditions include a pledge
titled ‘Certification Regarding Terrorist Financing’… stipulating that
Palestinian NGOs pledge not to ‘provide material support or resources
to any individual or entity that advocates, plans, sponsors, engages
in, or has engaged in terrorist activity…’ based on the U.S. Executive
PNGO program coordinator Renad Qubaj complained in
a telephone interview, “Who defines what is terror? All funds received
by the NGOs should be unconditioned — no political conditions.”
Another Palestinian NGO railing against the terrorist certification was
the Al Mezan Center for Human Rights, which has received three Ford
Foundation grants totaling $350,000, according to foundation records.
In late August, Al Mezan’s director was quoted in the Arabic press as
stating: “There is no legal basis for this document. This document
should be boycotted, including the local authorities, political parties
and universities. These institutions should reject this document
completely, as it puts them in great danger. We should publicize a list
of any institutions that agree to the conditions in the document.”
A spokesman for the State Department’s Near East Affairs bureau, Greg
Sullivan, said he sharply disagreed with the Palestinian groups’
“This should come as no surprise to the NGOs,” he
said. “We want to see accountability and results. The money going into
the Palestine area is a problem. That is why the Executive Order
He added: “We know terror acts when we see them, and we call them terrorism consistently.”
PNGO steering committee member Allam Jarrar said that although many of
the umbrella group’s members depend upon USAID for funds, PNGO itself
gets much of its money from Ford, and “Ford does not make us sign this
He added, “For us, Ford is a very credible organization.”
Palestinian sources said they would pressure the American government to waive Executive Order 13224.
But Sullivan of the State Department insists the order is necessary and said, “I can’t see us budging on this requirement.”
Interestingly, at the same time the State Department started tightening
control on NGO funding, it began shifting monies directly to the
Palestinian Authority. In May, the U.S. government granted $50 million
in aid to Palestinian areas, channeling the first $30 million through
traditional Palestinian NGOs.
However, on July 12, the State
Department suddenly announced the last $20 million of that original sum
would be granted directly to the Palestinian Authority.
there was an “unspoken linkage” in shifting financial transactions away
from NGOs to genuine government structures, a State Department
spokesman asserted, “Not unspoken at all — but loudly spoken.”
“The bottom line,” the spokesman said, is that “we here in Washington —
this department, as well as Treasury and the FBI — are deeply concerned
about the fungibility of money to NGOs that can go in one door and out
the back door, and then finance terrorist activities.”
the latest $20 million,” the spokesman said, “it is strictly
controlled.” He said the State Department is holding the Palestinian
Authority and its finance minister “strictly accountable.”
State Department spokesman added, “We want to be confident that our
monies do not finance anti-Semitic Palestinian textbooks and other
The spokesman indicated that the accounting firm of Deloitte & Touche had been engaged “to monitor those funds.”
Just as the State Department was tightening up policy on NGOs earlier
this year, the IRS began demanding far greater accountability and
transparency from American foundations engaged in Palestinian areas.
The Treasury Department recently published voluntary “Anti-Terrorist
Financing Guidelines” to tighten the lax funding procedures employed by
Among Treasury’s recommendations: Charities
should “determine whether the foreign recipient organization is or has
been implicated in any questionable activities.”
Adding to the
pressure on foundations, the multinational Financial Action Task Force
on Money Laundering has spotlighted “non-profit organizations [that]
collect hundreds of billions of dollars annually from donors and
distribute these monies” to a gamut of beneficiaries.
Council of Foundations, a representative association of philanthropies,
recoiled from the Treasury Department’s suggestion that it obtain
Certification Regarding Terrorist Financing. In a June 20, 2003, letter
to Treasury, Council President Dorothy Ridings, a former Ford trustee,
challenged the guidelines as inappropriate and unnecessary.
formal statement by Interaction, the largest American alliance of
international humanitarian organizations, asked Treasury to withdraw
the guidelines altogether. Interaction specified that West Bank
grantees would regard certification requests as “unduly intrusive.”
Sources at Treasury indicate they want more than accountability; they
want transparency — that is, the ability to review activity reports and
monitoring, all of which are currently secret at organizations such as
“The days of opaque financial transactions are over,” a
State Department official said when asked about the millions of
foundation dollars pouring into Palestinian NGOs. “Yes, we would like
to see transparency, accountability and internationally acceptable
standards on all their monies.”
Lack of transparency is indeed
the question facing the government and foundations engaged in
Palestinian areas. At the Ford Foundation, other than a one-sentence
description of a grant published in its annual reports, Web databases
and IRS filings, mounds of documents relating to the original grant,
activity reports, monitoring and audits are all held secret for 10
years after the grant concludes.
For example, in the case of
LAW, the Palestinian Committee for the Protection of Human Rights and
the Environment, those files would not become available for public
inspection until 2015 — and even then only after a cumbersome
academic-style review of any request.
LAW was instrumental in
organizing the anti-Israel debacle at the September 2001 U.N. World
Conference Against Racism in Durban.
When asked about its policy
of keeping documents secret, Ford issued a statement, saying: “We
protect grants and documents within the last 10 years to guard the
confidentiality of ongoing relationships with grantees.”
Officials of Jewish organizations found that policy troubling.
“It is not only a sad comment on philanthropy running amok, but
outrageous and irresponsible,” commented Abraham Foxman, national
director of the Anti-Defamation League.
“The Ford Foundation, in
its efforts to address evil, has — because of the lack of oversight and
monitoring, and establishing serious criteria as to the recipient
—wound up aiding and abetting extremists and political movements that
border on anti-Semitism and anti-Americanism,” he said.
incumbent on the trustees of the Ford Foundation to provide
transparency about their funding, including the audits,” Foxman added.
Malcolm Hoenlein, executive vice chairman of the Conference of
Presidents of Major American Jewish Organizations, called for a
congressional investigation of Ford Foundation grants to Palestinian
“At a time when government and society are demanding
transparencies on the part of corporations and charities,” Hoenlein
said, “it is hard to justify the apparent exemption of the Ford
Foundation, which uses tax-free dollars to fund what is at best
questionable organizations and causes — and at worst organizations
undermining the interest of the United States and its allies.
“It is now incumbent on Congress and federal agencies to conduct their own examination,” he said.
Yehudit Barsky, director of the American Jewish Committee’s division on
Middle East and international terrorism, said, “We need two kinds of
accountability from Ford — not just where did the money go, but how was
“Ford owes the public not only a financial accounting, but also a moral accounting,” she said.
A written statement issued by Ford, in response to questions, asserted,
“The Ford Foundation takes the threat of possible misuse of grant funds
for terrorism very seriously. We share the concern of the U.S.
government to minimize the risk that grant funds might be diverted for
terrorist purposes. We comply fully with all legal requirements
established by U.S. law and regulation.”
The statement added,
“We have no reason to believe that Ford Foundation grant funds have
been used to benefit terrorist organizations.”
investigation has not identified any instances of Ford monies being
linked to terrorism. However, despite more than two dozen attempts, in
writing and by phone, over a several-week period, Ford officials
responsible for external communications refused to answer any questions
regarding specific Palestinian NGOs, or past or present investigations
regarding the misuse of specific funds.
David Harris, executive
director of AJCommittee, said it is “unfortunate” that Ford “is
unwilling to go on the record, to explain or clarify its policy”
regarding specific grantees.
With no product to sell, no
stockholders, no customers, no need for outside fund-raising and no
need to answer to the public, the financial independence of the Ford
Foundation, estimated to be $10-billion strong, makes the organization
impervious to the type of criticism it appears to expect for financing
activism and agitation.
In a recent speech, the foundation’s
president, Susan Berresford, acknowledged, “Addressing root causes [of
injustice] often means making new kinds of arrangements in public
policies, community and power relationships …It is different from
traditional charity — feeding the hungry, sheltering the homeless.”
“Social justice philanthropy requires risk-taking, experimentation,
managerial oversight, patience, long-term commitment and a thick skin.
Being a social justice philanthropist or activist isn’t always
comfortable or easy,” she said.
The Ford Foundation has spent billions to fight for transparency in government and create a better world.
But Harris of AJCommittee makes this point: “Transparency begins at home.”
Black is the author of the newly released “War Against the Weak:
Eugenics and America’s Campaign to Create a Master Race” (Four Walls
Eight Windows), which investigates corporate philanthropic involvement
in American and Nazi eugenics. In May 2003, he won the American Society
of Journalists and Authors’ award for best book of the year for his
previous book, “IBM and the Holocaust” (Crown Publishing, 2001).
FUNDING HATE Series
Part 1: Ford funded Durban activists
Part 2: Fordīs Mideast money trail
Part 3: U.S. worries about transparency
Part 4: Case study of a Ford grantee