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Can tax-deductible donations fund settlement construction?

By Ben Harris · January 7, 2010

That's the question the Forward is asking. 

The notion that tax-exempt groups cannot oppose American policy is based on a 1983 decision by the U.S. Supreme Court in a case involving Bob Jones University, an evangelical Christian school in Greenville, S.C. The university’s not-for-profit status had been revoked by the Internal Revenue Service over a school ban of interracial relationships, and the university had sued. In its decision, the Supreme Court upheld the IRS’s finding, stating that “an institution seeking tax-exempt status must… not be contrary to established public policy.”

Critics of the settlements, including the ADC, point out that the State Department and the Obama administration are opposed to settlement construction, a position that has been shared by previous administrations. “The United States is opposed to settlements, period,” said Darby Holladay, a spokesman for the State Department.

Although most settlement expansion is temporarily on hold in the West Bank, religious nationalist organizations and the Israeli government continue to build in East Jerusalem, which Palestinians hope to make the capital of a future Palestinian state. The major East Jerusalem settlement organizations, including Elad and Ateret Cohanim, each have American auxiliaries that accept tax-deductible donations. While American Friends of Ateret Cohanim, which sent $1.6 million to the Israeli group in 2007, claims in American tax documents to fund education, a Haaretz report last August quoted an Israeli Ateret Cohanim official saying that all money raised through the American group is used for “land redemption.”

Full story here.