Israeli NGOs on Both Sides of the Political Divide Are Trading Accusations About Shady Funding

A heated battle between NGOs in Israel ratcheted up another gear on Monday as leftwing not-for-profit Peace Now accused nine of its rightwing counterparts of concealing the origin of some $147 million in funding from the public.

The 53-page Peace Now investigation, which looks at the financial records of nine NGOs between 2006 and 2013, claims nine rightwing NGOs have failed to publicly disclose the source of around 95 percent of their funding, and that local Israeli councils have transferred $25 million in tax revenue over the seven-year period. Among those investigated are Im Tirtzu, a far-right Zionist organization, and the City of David Foundation, an organization that has bought up homes in Silwan, a predominantly Arab neighborhood in East Jerusalem, on behalf of settlers.

The allegations come in the wake of what some argue is a years-long campaign against leftwing not-for-profits that culminated in a 2011 piece of legislation requiring organizations receiving funding from foreign governments or organizations -- like the European Union and United Nations -- to adhere to vigorous reporting standards. The law is widely recognized as predominantly affecting  left-wing organizations such as  Peace Now; which receive large portions of their funding from western embassies and foreign ministries for work on issues such as settlement monitoring and human rights for Palestinians.

"What we are seeing [now] is a battle for legitimacy in the civil sector," Amir Fuchs, a researcher on democratic principles at the Israel Democracy Institute, told VICE News. "The left-wing NGOs came under heavy attack in the last Knesset [Israeli parliament]… There have been attempts to delegitimize, shame them, brand them as foreign traitors as part of the BDS [Boycott Divestment and Sanctions] movement; so in some ways, this is a response to that. They are saying: 'You ask for transparency from us, look at yourselves.'"

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According to the 53-page 'Peace Now' investigation, published Monday, the source of some 95 percent of funding received by the investigated NGOs over a seven-year period was effectively untraceable. Peace Now classified around 4.5 percent of donations as "allegedly transparent" and 93.8 percent as "entirely confidential."

Among the issues highlighted in the report are substantial sums given via 'conduits' or 'umbrella' organisations that have tax-exempt status in the US. The set-up acts to obscures the true origins of donations because, although amounts over 20,000 shekels ($5,100) have to be declared to a special committee under Israeli law, NGOs can list the conduit rather than the actual identity of a person or company giving the money.

These findings are supported by a recent report by Israeli newspaper Haaretz that identified at least 50 US-based 'conduits' which transferred some 850 million shekels ($220 million) in "private donations" to settlements and organizations operating beyond the 1967 Green Line between 2009 and 2013. The investigation also found that several of these not-for-profits that collected money on the behalf settlements gave only "partial names of donors who are almost impossible to identify without further information" and that overall there was a "low standard of transparency."

The Peace Now report doesn't just criticise money coming in from foreign sources, however. It also notes a severe opacity surrounding the system of designating public funds to right-wing NGOs by the Israeli government. As in most countries the government can allocate funding to not-for-profits carrying out social and community work, but under Israeli law the particular bodies or individuals overseeing the allocation of money do not have to be named in publicly available documents. According to 'Peace Now' six out of nine NGOs it investigated received government funding of unclear origin; totalling some 100 million shekels ($25 million) over the seven-years.

Private and conduit funding can also be redacted from public documents with permission from the state under certain circumstances, a privilege left-wing and pro-democracy NGOs allege is given nearly exclusively to right-wing organizations.

"We're talking about big, big, sums, that we just don't know the source of," Yariv Oppenheimer, Head of Peace Now, told VICE News. "We're talking, mainly, about money from private foreign donors and money from the Israeli government via local municipalities; large amounts of money."

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Treading the middle ground, Eli Sulam, Director of the Movement for Quality Government in Israel, said that the ferocious debate only highlighted the need for greater transparency among not-for-profits across the board.

"With NGOs, as with everything in Israeli politics there is growing divide between 'lefties' and 'righties,' but from our viewpoint, we hope this is a battle they both win," he told VICE News. "Because everyone is attacking each other we hope this will lead to more transparency from everyone. The simple way for everyone to solve this is to be honest with people, and let them decide."

But the fight looks far from over. In a Machiavellian response to the Peace Now report's criticism, NGO Watch, a pro-Israel NGO that monitors and critiques policy makers, not-for-profits and journalists, said Monday that it was glad that, "after years of complaining that transparency legislation and research are 'McCarthyite' and 'fascist', political NGOs… including Peace Now, have recognized the importance of funding transparency and accountability for what are ostensibly non-government organizations, but receive much of their money from governments."

Meanwhile, the left also faces further challenges in the form of a bill being tabled by Israel's Justice Minister Ayelet Shaked, a prominent member of the right-wing Jewish Home party. The law, which has not yet been voted on, would require representatives from NGOs receiving money from "foreign entities" to wear a special tag when interacting with government officials and institutions, effectively acting as an extension of the 2011 law by singling out predominantly left-wing NGOs as lobbyists.

Commenting on the proposed bill, Peace Now's Oppenheimer said it was "partisan" and aimed at stifling criticism of the government. "Every donor, private and state, every NGO has an agenda," he told VICE News. "But this law is useless, its only aim is to shame left-wing organizations."

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