Canadian Jewish Groups Investigated for Funding Israeli Settlements

by Faisal Kutty

“Toronto Jews are one of our biggest supporters, they’re tremendous,” proclaims Judy Grossman, overseas fund-raiser for the Hebron Fund in the West Bank. In fact, the Toronto-based Press Foundation, which has been linked with fund-raising activities for Jewish settlements on the Golan Heights and in Hebron, raised more than $5 million during the fiscal year ended June 30, 1995, though it is unclear how much of this went to the settlements.

Further, Israel’s largest settler group, One Israel/Canadian Friends of Yesha, has on its own raised more than $700,000 a year from Canadians. Under Canadian tax laws, it is not illegal to send money to the settlements, but it is unlawful to claim a charitable tax deduction for the contribution. But this is exactly what many contributors are doing.

A recent investigative report in the Toronto Star revealed that a number of Jewish organizations are using their charitable status to issue receipts for such contributions. These receipts then are used by the donors to claim a deduction pursuant to the charitable contributions provisions of the Income Tax Act. Canadians can write off part of their charitable contributions and thereby reduce their taxable income by as much as 20 percent.

“Arab Canadian groups have been harping on this for a long time,” says Jehad Al-Iweiwi, spokesperson for the Canadian Arab Federation (CAF). He told the Washington Report that a great deal of money has been “going from Canada to fund illegal activities, build settlements on confiscated Arab lands.”

The deduction provisions, aimed at encouraging private contributions to charities, appear to have been used quite successfully by supporters of the estimated 155,000 settlers living on Israeli-occupied lands. In part due to the deduction, according to Israeli settlers and their fund-raisers, Canada’s Jewish community contributes more on a per capita basis than even their American counterparts.

“There’s a cartel of Canadian millionaires who give massive amounts of money,” says David Drache, an Ottawa-based lawyer specializing in the charity field.

Mainstream Jewish charities claim that they don’t violate Canadian tax laws. In fact, the largest Jewish fund-raising outfit, the United Israel Appeal of Canada (UIAC), formally refuses to fund projects in the occupied territories. Victor Yagoda, a director of the charity, says that UIAC activities are restricted to internationally recognized borders to ensure that Canadian laws are respected.

Those calling for tighter controls point to the ease with which these laws are violated. Al-Iweiwi of CAF cites the example of Ariel Sharon’s last visit to Canada. Sharon left with more than $1 million in tax-deductible funds, with no secret as to the destination.

Revenue Canada appears finally to have caught on. The Charities Division presently is investigating a number of organizations for allegedly funneling funds to support the Jewish settlements in the occupied territories. These settlements are considered “contrary to international law and unhelpful to the peace process,” according to Revenue Canada.

Contributors interested in aiding the settlers can get information on how to assist by phone and even the Internet. According to the Star report, Canadian callers to the New York-based Hebron Fund Inc., the North American fund-raising arm for settlers in Hebron, are provided with step-by-step instructions on how to funnel their funds through the Canadian-registered Press Foundation in return for a tax-deductible receipt issued by the Foundation.

In fact, another settler group, the Golan Residents Committee, uses its Internet Web site to request supporters to “contribute whatever you can by sending your tax-deductible contribution to our offices abroad.” Visitors to the site are then instructed to direct their donations through the Press Foundation in Toronto. When the Washington Report tried to contact the Foundation for this article, it was discovered that the telephone number recently had been disconnected.

The Press Foundation and Yesha are not the only Canadian groups breaking the law. Conservative estimates put the number of registered Canadian charities connected to Israel at more than 300. And, according to Drache, “there are hundreds of organizations…that are supporting organizations directly or indirectly beyond the Green Line [in the West Bank].” He adds that “those are all technically in breach of this [Canadian government] policy.” Earlier this year the government revoked the charitable status of the Toronto Zionist Council after it was revealed that the Council channeled funds to the settlements.

According to the Department of External Affairs, the settlements in the occupied West Bank, Gaza Strip and Golan Heights are an obstacle to peace in the Middle East. By funding settlements, “the charities are subsidizing the state infrastructure,” says Carl Juneau, acting director of Revenue Canada’s Charities Division.

Revenue Canada does not plan retroactively to challenge receipts that have been issued improperly, but the directors of charities issuing such receipts could face prosecution under the Income Tax Act. As for the Arab Canadians who first raised the misuse of tax exemptions, Al-Iweiwi of CAF spoke for them all when he said, “We are pleased to see that something is finally being done to look into this problem.”