One of the biggest controversies in Israel today is over the role of foreign-funded NGOs in influencing the country’s domestic politics. As always, you need to follow the money.

Non-governmental organizations (NGOs) are very big business in Israel. Various NGOs—most of them from the Left and claiming to promote human rights and democracy—are very active in the Knesset, in filing lawsuits with the Supreme Court that seek to overturn government policies, and in the media. They receive hundreds of millions of shekels from large foundations and foreign governments—primarily European. While the activities of these NGOs are criticized by the Israeli Right, much of the mainstream Israeli media supports them. As a result, the “halo effect” that protects these NGOs from independent investigation is particularly strong.

But that halo was shattered recently when the popular Israeli television news program Uvda featured a hidden-camera expose of a little-known “peace group” known as Ta’ayush, led by activist Ezra Nawi. The footage showed Nawi, along with Nasser Nawaja, a Palestinian employee of the NGO B’Tselem, plotting against an Arab who was negotiating to sell private land in the West Bank to Jews. They were trying to lure the Palestinian into a trap where he would be captured by the Palestinian Authority’s security services. As Nawi coldly noted in the video, under PA law, the sale of Palestinian land to Israelis is punishable by death.

The broadcast became headline news and the fallout continued for weeks. Nawi was arrested at Ben-Gurion Airport when he tried to flee the country. A few days later, a follow-up program aired more hidden-camera footage, this time showing Nawi with officials from two other prominent “human rights” NGOs—Breaking the Silence (BtS) and Rabbis for Human Rights (RHR). Both groups were shown giving money to Nawi, who then handed out checks to Palestinians, apparently for taking part in violent demonstrations. RHR claimed that Nawi was paid for providing transportation services. BtS denounced everyone involved in the program as “Stasi,” a reference to the notorious East German intelligence service.

The report was particularly explosive because Nawi had been an iconic hero to the far-Left in Israel and beyond—a gay Sephardi peace activist and pacifist who embodied Western orientalist myths. Prominent leftists like Noam Chomsky and Naomi Klein described him as “one of Israel’s most courageous human rights activists.” David Shulman, who writes highly critical articles on Israel in The New York Review of Books and happens to be a member of Ta’ayush, referred to Nawi as an Israeli Gandhi. In 2009, after Nawi was convicted of assault following a demonstration, he became the focus of an international campaign, including a sympathetic portrayal in Time magazine. The fiercely anti-Zionist Jewish Voice for Peace claimed to have collected 20,000 signatures on a petition to save him from jail. But in 37 minutes, the Channel 2 program destroyed Nawi’s image.

In a wider context, the timing of the reports was damaging to the entire NGO establishment in Israel. It came in the middle of an intense controversy over the role of Israeli NGOs in the worldwide campaign to demonize Israel through the use of terms such as “apartheid,” the rise of the boycott, divestment, and sanctions (BDS) movement, and the use of “lawfare” to charge Israeli officials with war crimes and other supposed transgressions of international law.

Prior to the Uvda broadcasts, BtS and its patrons were the particular focus of growing anger among many Israelis on the Right, center, and even the center-Left. This anger followed a major jump in the visibility of BtS, which reflected the group’s million- dollar budget. BtS events in churches, universities, and national parliaments around the world featured “anonymous testimony” that alleged systematic immorality by IDF soldiers, with no corroborating evidence.

In response, hundreds of IDF reserve officers petitioned the Minister of Defense, demanding that BtS activists be barred from speaking on military bases. In parallel, relatives of terror victims and fallen soldiers demanded that Education Minister Naftali Bennett prohibit BtS from speaking to high school students. NGOs like B’Tselem were also criticized. On Israel’s popular Saturday night satire program Gav Hauma, host Lior Schleien did a ten-minute routine based on the issue, primarily lampooning BtS and related NGOs.

Clearly, Uvda’s revelations amplified a larger controversy surrounding Israel’s NGO establishment. Conspiracy to murder was a smoking gun, which even the Israeli center-Left understood to be entirely incompatible with any principles of human rights. Since then, terms like hypocrisy and duplicity have been used with greater frequency, and not only by right-wing critics.

This backlash was a long time in coming. Over the years, political NGOs in Israel have accrued a great deal of power, without the checks and balances provided by the democratic process. This power was often used to oppose the policies of the elected Israeli government, primarily through activism outside of Israel. NGO activists often employed terms such as “apartheid” and accused Israeli leaders of war crimes, systematic violations of international law, and the suppression of human rights.

It is important to understand that such activities are part of a much larger international campaign against Israel. The infamous NGO Forum at the UN’s 2001 World Conference Against Racism in Durban, South Africa, in which 1,500 groups participated, produced a detailed strategy for demonizing Israel based on the anti-apartheid model. This marked the beginning of the BDS movement and various “lawfare” campaigns. Although most Israeli NGOs did not attend the Durban forum, many became closely involved in these efforts.

As the participation of NGOs in BDS and other campaigns became more visible, criticism in Israel increased, particularly with the publication of the UN’s defamatory and now-discredited Goldstone report on Operation Cast Lead in 2009. The report was based on hundreds of NGO allegations, including from B’Tselem and BtS, many of which were shown to be false or unverifiable. These allegations, which now had the UN’s imprimatur, were cited in attempts to arrest Israelis as alleged “war criminals,” including former Foreign Minister Tzipi Livni and a large number of military officers.

In response, politicians on the Right of the Israeli political spectrum introduced legislation to limit NGOs’ ability to influence Israeli policy. Information on the scale of funding for these groups was published by my organization NGO Monitor, demonstrating the process through which the European Union and individual states were using these NGOs as instruments of their own policies.

Over the years, political NGOs in Israel have accrued a great deal of power, without the checks and balances provided by the democratic process.

This activity is unique in relations between democracies. If Europe sought to similarly influence American policies, politics, and society, it would involve the annual transfer of billions of dollars to American NGOs focusing on controversial issues, such as abortion, gun control, race, or immigration. Even a small-scale campaign on such issues funded by foreign governments would draw immediate and widespread American opposition.

The Israeli debate flared again after the 2014 Gaza war, when the cycle of NGO attacks and UN reports was more or less repeated. Then, in November 2015, the European Union issued an “interpretive note” to its import guidelines, which recommended that member states require labels on products from the occupied territories (meaning the West Bank, eastern Jerusalem, and the Golan Heights). This gesture, known as “BDS lite,” had been pushed for many years by an NGO network that is very active in Brussels, such as a 2012 report headlined “Trading Away Peace,” sponsored by 22 major groups, many of which receive funds from the EU and individual states. As Steven J. Rosen wrote in The Tower in January, these NGOs work closely with “the complex bureaucracy of the EU and its member states—the officials known colloquially as the ‘Eurocrats.’ It focuses on incremental measures rather than advocating a complete boycott of Israel, and it has proven far more successful than its radical counterpart.”

These events put the NGO issue back at the top of the Israeli agenda and, at the end of 2015, Justice Minister Ayelet Shaked announced a new effort, focused primarily on foreign funding of NGO campaigns. If approved, the legislation—according to the published draft—would require NGOs receiving more than 50 percent of their budgets from foreign governments to disclose it in their publications, letters to government officials, and protocols of Knesset statements.

It should be clear that the impact of these measures would be largely symbolic. In Israel, however, this symbolism is highly significant, reflecting the importance attached to national sovereignty and self-determination, which are central to Zionist ideology. Many Israelis resent efforts by foreign and particularly European governments to manipulate Israeli civil society and politics. NGO activists believed that under the guise of transparency, the foreign agent label would inherently limit the power and legitimacy of their organizations.

For these reasons, Shaked’s initiative triggered a flood of headlines in the Israeli media and numerous urgent Knesset sessions, some in support and many in fierce opposition. NGO officials and their allies attacked Shaked and supporters of the legislation as “McCarthyites” and “fascists” intent on destroying democracy. In op-eds and public statements, NGOs and their supporters compared the proposed law to measures taken in Turkey and Putin’s Russia.

Shaked, of course, hit back. Rejecting the analogy with Russia and Turkey, she argued that the proposed legislation was entirely compatible with democratic principles. In particular, she compared her proposal to the U.S. Foreign Agents Registration Act (FARA), adopted by Congress in 1938. FARA’s objective was to provide information on efforts by foreign governments to influence the U.S. Congress. According to Shaked, her law is “less stringent than those imposed by the United States upon similar types of activity under the Foreign Agents Registration Act.”

This claim opened up another front, and the comparison was widely rejected and denounced by the NGO officials and a U.S. State Department spokesman. Then, in a highly unusual statement, U.S. Ambassador to Israel Daniel Shapiro rejected the FARA analogy. He claimed that, unlike the Israeli proposal, which deals only with NGOs, “U.S. law imposes no limits, restrictions, or transparency requirements on the receipt of foreign funding by NGOs operating in the United States, other than those generally applicable to all Americans. … As a result, it does not create the chilling effect on NGO activities that we are concerned about in reviewing the draft Israeli NGO law.” But Shapiro’s retort avoided the most important point—in Israel, the threat is not from German spies or Soviet agents, but from foreign-funded organizations that use the language of human rights to demonize the Jewish state. Shaked’s comparison to FARA was not meant to be literal—it was used as an analogy regarding foreign state interference.

In addition, Shapiro claimed that, unlike the Israeli situation, FARA applies to U.S. entities who “engage in certain specified activities at the order, request, or under the direction or control, of a foreign principal.” In other words, there is a difference between FARA and the NGO law because Israeli NGOs are not required to act according to the policies of their donors. But the evidence often shows close links between the agendas of Israeli NGOs and the policy goals and interests of their patrons. As noted above, these NGOs perform specific services for foreign governments, providing legitimacy for their opposition to Israeli government policies. For example, reports written by Israeli NGOs funded by European governments are regularly quoted in EU policy statements on issues such as the status of Jerusalem and the West Bank.

In this sense, Israel’s proposed NGO law is similar in spirit and purpose to the rules adopted last year in the U.S. House of Representatives, which requires witnesses who testify before a committee in a “nongovernmental capacity” to disclose “the amount and country of origin of any payment or contract related to the subject matter of the hearing originating with a foreign government.” These regulations were adopted following an article in The New York Times that revealed countries like Qatar and Norway were donating millions of dollars to American think tanks like the Brookings Institution. The reports these groups produced were then used to lobby for the policies of their government financiers. The new regulations clearly intended to prevent foreign governments from secretive and undue influence over democratic processes. No Washington Post editorial to date has compared Congress to Putin’s Russia.

Shaked’s proposed law also promotes much-needed transparency on the part of Israeli NGOs. In most cases, the decision-making processes for foreign grants are highly secretive, and there is little if any parliamentary review or public discussion in Israel or the donor countries. The names of the people involved, their expertise and professional qualifications, potential conflicts of interest, and other aspects are hidden from the public. Similarly, any evaluations made at the end of a grant period are unavailable, even through freedom of information requests. This secrecy, which is incompatible with transparency norms in democratic societies, protects the small group of officials, such as the EU’s Christian Berger, who are reportedly behind the use of Israeli NGOs to promote European objectives.

These efforts are of long standing. Large-scale European government funding of Israeli NGOs began in the late 1990s, facilitated by the Euro-Mediterranean (Euro-Med) framework inaugurated in 1995 at the EU’s Barcelona conference. The two primary, if unstated, objectives of the Euro-Med program were 1) to develop economic programs in North Africa to prevent large-scale migration to Europe (a complete failure), and 2) to compete with the U.S. in the realm of Israeli-Palestinian peace negotiations. To reach the second goal, the EU created a funding mechanism initially known as the People to People program, which later became the Partnership for Peace (PfP) framework, with annual budgets of between 5 and 10 million euros. Funding was provided to between 20 and 40 NGOs.

The secrecy behind NGO funding, which is incompatible with transparency norms in democratic societies, protects a small group of officials who use Israeli NGOs to promote European objectives.

For many years, all PfP grant details to NGOs were secret, and the only information came from a leaked summary of a 1999 meeting of the “Ad hoc selection committee for People to People/Permanent Status Issues projects in support of the Middle East peace process, budget line B7-4100, European Commission, Directorate General External Relations.” Among other causes, the committee allocated 400,000 euros to the Israeli leftist group Peace Now with the objective of convincing Israeli Jews from Russia to change their political views. 250,000 euros (each) were allocated to The Four Mothers Movement to Leave Lebanon in Peace, and to a fringe NGO calling itself the Israeli Committee Against House Demolitions (ICAHD) for a “joint Israeli-Palestinian public awareness campaign and concrete action against the practice of land expropriation and house demolitions by the Israeli army in the West Bank.” In his travels around the world, Jeff Halper, the head of ICAHD, frequently refers to Israel as an “apartheid state.”

These revelations did not lead to any action, either in Israel or Europe, and the practice continued and expanded, far from public scrutiny or debate. In 2004, during a meeting in Jerusalem with a delegation from the European Parliament, I cited the leaked protocols regarding PfP funding. The EU ambassador to Israel at the time, Gianne Carlo Chevelard, jumped to his feet and tried to block the discussion.

At the same time, another EU framework—the European Instrument for Democracy and Human Rights (EIDHR)—also began to disburse millions of euros to Israeli and Palestinian NGOs, including grants to groups that were also PfP recipients. Here too, the decision-making process was entirely secret, and a highly disproportionate percentage of the funds went to the politicized Israeli NGO network. In justifying the lack of transparency, EU officials referred to dangers to “public security” without providing any details.

These and other EU mechanisms, as well as parallel frameworks in individual countries, funneled large sums to Israeli NGOs whose activities include BDS, promoting the “one-state solution” in which Israel itself would be dissolved, “anti-normalization with Israel” campaigns, and clogging courts with “war crimes” cases.

The combination of the massive European funding of NGOs, the role of these groups in promoting political warfare against Israel, and the secrecy in which they are enveloped added to Israeli concerns and criticism. This increased further with the recent revelations that in August 2015, the EU provided BtS with another 250,000 euros, while a related framework, the European Endowment for Democracy, gave B’Tselem 30,000 euros explicitly for “combating anti-democratic laws aiming to silence opposition.” As in the past, the EU and the individual governments involved refused to discuss these Israeli concerns, further increasing support for the proposed NGO legislation.

Among the most prominent opponents of the NGO bill is the New Israel Fund (NIF), a powerful U.S.-based funding framework with an annual budget of $30 million, which provides seed money and ongoing support for many of the NGOs under discussion. The NIF has no official standing in Israel, is not registered as a non-profit, and the proposed law would not affect it. But European government funding is a very important amplifier for the NIF’s work in Israel, which is increasingly political. Groups such as Breaking the Silence, B’Tselem, Rabbis for Human Rights, the Public Committee Against Torture in Israel, and many more are part of the NIF network and receive millions of dollars from Europe.

In many ways, the NIF is an NGO-based shadow government. It was created in response to the 1977 Israeli elections, when right-wing leader Menachem Begin became prime minister, ending an era of left-wing domination. Over the years, the NIF has built a wide network of Israeli NGOs, empowering them to oppose government policies inside Israel and outside, including in the United Nations and foreign capitals. Two NIF-based NGOs have offices or branches in the U.S.—Adalah and B’Tselem. The officials in charge of both U.S. offices wrote articles attacking the proposed NGO law.

As a result, the NIF has been very active in opposing all legislation related to NGO funding, fearing that it will hamper its ability to influence politics and policies. In 2009, they referred to a proposed law requiring recipients of foreign government funding to report it every three months as “McCarthyism” and anti-democratic. The law was passed in 2011 and the NGOs continue to receive grants with no visible harm to Israeli democracy.

Leaders of the NIF are playing a central role in the campaign against Shaked’s proposal. Naomi Paiss, who is in charge of public relations for the NIF, wrote an op-ed published by the Jewish Telegraphic Agency headlined, “Proposed Israeli NGO law is hypocritical attack on left.” CEO Daniel Sokatch sent out numerous emails attacking the legislation, writing, “The hardliners currently in power in Israel want to silence or sideline any Israelis who challenge their agenda of more settlements and an entrenched occupation.”

Sokatch has proven particularly hysterical on this subject. When the offices of B’Tselem caught fire on January 11, 2016, Sokatch immediately wrote that “arson seems to be the likely cause” and charged that “Ultranationalist groups … are creating a climate where terrible things can happen. Government officials at the highest levels have not simply refused to condemn this incitement, they have joined the fray.” The fire was caused by an electrical problem. And after a fringe-Right organization, Im Tirtzu, posted a video attacking NIF-linked officials as “moles,” the NIF countered with an attack video falsely portraying Im Tirtzu as responsible for assassinating Prime Minister Rabin twenty years ago.

The intense rhetoric of the NIF reflects their genuine concern that, by highlighting the massive European funding for its associated NGO network, the organization will lose standing and influence on the Israeli center and center-Left. From this perspective, the stakes are even higher than the question of foreign funding for NGOs. They and their patrons believe the NGO bill threatens a political structure they have built up over almost four decades.

For Israel itself, however, the stakes are even higher. In question is Israel’s right to reassert its national sovereignty in the face of foreign manipulation, demand transparency from unelected groups that campaign intensely against the policies of its elected government, and counter an international campaign of hate and defamation that potentially threatens Israel’s very existence.

Ironically, the NGOs and their patrons have made this controversy inevitable. They are answerable to no one but themselves, keep their own internal affairs completely secret in a manner they would condemn if the Israeli government did the same, and resort to hysterical and often slanderous rhetoric almost reflexively when anyone questions their activities or ideology. In the face of this, the rising anger and mistrust directed toward them is completely understandable.

Finally, and perhaps most importantly, the proposed NGO law is, contrary to the claims of many inside and outside Israel, entirely compatible with democratic norms. It does not restrict these groups’ freedom of speech or assembly in any way. Countries like the U.S. and India have similar laws that are observed without controversy. Comparable laws have been passed in Israel that have left NGOs and their activities undamaged. And there is no reason for organizations to fear simple transparency; in fact, if they support democracy and open government, they should welcome it.

The NGO wars will undoubtedly continue, as both the Israeli people and the NGOs escalate their rhetoric and entrench their stands. The sight of Ezra Nawi conspiring to murder a Palestinian was a hammer blow to the NGO network, but there may be more revelations coming, and the network will unquestionably keep fighting against its critics. But the debate should be based on the facts, not on wild and unjustifiable accusations of McCarthyism and government suppression. The NGO law would be an asset to Israeli democracy, and those groups that claim to care so much about precisely that should embrace it.

Banner Photo: Maksym Yemelyanov / 123rf