FORD FOUNDATION DRAWS SCRUTINY AS TERRORISM RULES BEGIN TO BITE
Does Funding Trickle Down to Terrorists?
By EDWIN BLACK Jewish Telegraphic Agency
WASHINGTON
— 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.
How
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
controls?
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” terrorism.
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 Order 13224.”
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’
position.
“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 exists. 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
agreement. For us, Ford is a very credible organization.”
Palestinian sources said they would pressure the American government to waive Executive Order 13224.
But Mr. Sullivan 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.
On July 12, the
State Department suddenly announced the last $20 million of that
original sum would be granted directly to the Palestinian Authority.
Asked
if 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.
“As
for 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.”
The
State Department spokesman added, “We want to be confident that our
monies do not finance anti-Semitic Palestinian textbooks and other
anti-Semitic materials.”
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
some foundations.
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 “nonprofit organizations [that] collect
hundreds of billions of dollars annually from donors and distribute
these monies” to a gamut of beneficiaries.
The
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 letter to
Treasury, Council President Dorothy Ridings, a former Ford trustee,
challenged the guidelines as inappropriate and unnecessary.
A
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 secret at organizations such as Ford.
“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 find 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.
“It
is incumbent on the trustees of the Ford Foundation to provide
transparency about their funding, including the audits,” Mr. 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 NGOs.
“At
a time when government and society are demanding transparency on the
part of corporations and charities,” Mr. 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
it spent.
“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.”
This
investigation has not identified any instances of Ford monies being
linked to terrorism. But 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
fundraising, and no need to answer to the public, the financial
resources of the Ford Foundation, estimated to be $10 billion, 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 Mr. Harris of AJCommittee makes this point: “Transparency begins at home.”
FUNDED
BY THE FORD FOUNDATION? Anti-Zionists demonstrating at a rally against
Israel before the start of the United Nations Conference against Racism
in Durban, South Africa, in 2001. AP /THEMBA HADEBE
