A Wall Street Journal editorial notes the Obama administration gave special scrutiny to the tax-exempt status of certain pro-Israel organizations and cites a front-page, 5,000 word article in the New York Times published July 6, 2010 as a possible signal to the IRS:
“Why the special scrutiny for pro-Israel groups? A New York Times article in July 2010 provided a clue: Tax-exempt groups were donating to West Bank settlers, and State Department officials wanted the settlers out. ‘As the American government seeks to end the four-decade Jewish settlement enterprise and foster a Palestinian state in the West Bank,’ the Times wrote, ‘the American Treasury helps sustain the settlements through tax breaks on donations to support them.’
“Did the T-men take their political cues from such stories, or did Administration officials give them orders? Either explanation would be a violation of public trust.”
At the June 16 meeting, Erekat said Benjamin Netanyahu’s June 14 Bar-Ilan speech had sought to put the Palestinians on the defensive. Netanyahu endorsed a two-state solution and stated that in the meantime, “we have no intention of building new settlements or of expropriating additional land for existing settlements,” but would “enable the residents to live normal lives.” He urged the Palestinians to engage in immediate negotiations, without preconditions. Erekat wanted to respond to the speech with a letter to the U.S. that would cite the number of individual housing units under construction. Dr. Mohammed Shtayyed made an additional suggestion to Erekat:
“We should also focus on the government incentives to settlers: loans without interest, land for free, agricultural subsidies in the Jordan valley. We can’t stop a pregnant lady from having a baby, but look at what we can do. We should look at the 501(c)(3) organizations in the States that make donations to settlers. Let the US administration investigate this.” [Emphasis added].
Shatayyed was wrong about Israeli government incentives, which had been terminated by Israel during the Bush administration, as part of a negotiated arrangement (detailed by Elliott Abrams in Tested by Zion) allowing new construction only within already built-up areas, which permitted normal growth without an increase in the Israeli “footprint” in the territories. Given our evolving knowledge of how the IRS operated under Obama, however, it seems possible the Palestinians followed through on Shtayyed’s other suggestion, asking the administration to investigate pro-Israeli groups.
It would have been at a time when the administration was already reneging on the previously negotiated arrangement with Israel; telling American Jewish leaders that daylight between the U.S. and Israel was an administration goal; and refusing to state whether it considered itself bound by Bush’s April 14, 2004 letter to Israel. Perhaps a Palestinian request to “investigate” 501(c)(3) entities found a welcome response at the highest levels of the U.S. government, even before the New York Times article appeared a year later.