Israeli Settlements; Illegal but Still Subsidized by the American Taxpayer

by Ruqyah Sweidan

Israel is an expansionist state. Based on its history of forced Palestinian dispossession and relentless settlement activity, it can be easily discerned that Israel is adamant about pursuing this policy. Israel currently has total authority over the entire land of Palestine. Gaza is totally controlled, and the West Bank and East Jerusalem are under military occupation. Land expropriation and settlement expansions have not stopped since these areas were occupied in 1967. This article will specifically address the beneficial tax incentives given to American donors supporting the illegal settlements in the West Bank and East Jerusalem.

It has long been established by the numerous resolutions passed in the United Nations General Assembly and Security Council that Israeli settlements built in the occupied territories are illegal. But of course, the Israeli government continues their colonization. Every year, hundreds of new settlements units throughout the West Bank including East Jerusalem are approved for construction, becoming de-facto annexations fully supported by the government. The Gaza Strip was also subject to the same ruthless policy before the Israeli unilateral redistribution of troops (from inside the strip to its perimeter) and the blockade, which began in 2007.

Although the United States has acknowledged that Jewish settlements in the occupied territories jeopardize the peace process and has long considered them illegal, Americans are openly encouraged to donate to the development of the settlements and re-location expenses for the settlers. Regardless of the blatant show of support for illegal activity, pro-settler groups defend their tax-exempt status by describing their work as humanitarian, not political.

This argument does not hold true. The intentions of the settler groups are to profiteer from exploitation of Palestinian land. For instance, twice a year, a Tennessee-based charity called HaYovel takes their supporters, mainly American evangelicals, on a trip to Israeli settlement wineries to participate in a much adhered biblical prophecy, assisting Jewish winemakers in the Holy Land to bring about Christ’s second coming.

Moreover, the American Friends of Ateret Cohanim outline in their mission statement their intention to “re-unite Jerusalem”, i.e. support the expulsion of Palestinians from East Jerusalem and incentivizing settlers to move into the units built there. All donations to these preceding charities are one hundred percent tax deductible.

A third US-based charity that supports settlement activity came directly in the middle of one of the most widely broadcast fights for Palestinian existence in Jerusalem in modern history, the summer 2021 clashes which led to the Eleven Day War on the Gaza Strip. The Central Fund of Israel (CFI), a US registered corporation, contributed more than 36 million dollars to various Jewish charities and causes in 2019. The Israel Land Fund (ILF), a real estate company that buys up land in East Jerusalem has immense backing from prominent Jewish American donors, including .including Cherna Moskowitz, the widow of the late Irving Moskowitz, an American billionaire businessman who was one of the leading funders of Israeli settlements in East Jerusalem and the West Bank.

The ILF was founded in 2007 by Aryeh King, deputy mayor of Jerusalem and settler who lives in the Palestinian neighborhood of Ras al-Amud. At the height of the summer 2021 ethnic cleansing campaign, King mocked the Palestinian activist Mohammed Abu Hummus after he was shot by Israeli forces, pointing at his head and saying, “it’s a pity it didn’t go in here.”

According to Diala Shamas, an attorney with the Center for Constitutional Rights, “American organizations are taking advantage of so-called charitable designation to perpetrate violence on the ground, and a situation of apartheid in the West Bank goes contrary to the basic principles laid out in the U.S. Tax Code, and other provisions of U.S. law.”

At its heart, Zionism is an ideology of annexation, expropriation, demographic replacement and racial supremacy. The so called Two State Solution continues to be a failure simply because Expansionist Zionism is incompatible with a peace resolution. Thus, the settlements we see today, made of concrete and stone and dominating the richest lands of Palestine, are the embodiment of the Zionist vision.

Palestinians continue the struggle to defend their land not only in the face of the most powerful and brutal army in the region, but also at extreme imbalance of power. Although there are many organizations in the US that support the Palestinians, they are regularly subject to scrutiny and, in some cases, sanctions. Thus, as the US government claims that it supports the establishment of a Palestinian state, the American Treasury is an active accomplice in sustaining the settlements through tax breaks on donations to support them. And it will continue to do so without major policy change.

This article has been written by Ruqyah Sweidan, who is the Assistant Director of the Jerusalem Fund/Palestine Center.

The views in this article are those of the author and do not necessarily reflect those of The Jerusalem Fund.