State funding for Israeli companies and pro-Israel politicized textbooks: VIAB (now VIAA) is a pilot for how Israel can quietly obtain taxpayer funding and official status for entities that advance Israel from within key state governments. The organization quietly operates as a taxpayer-funded lobbyist for a foreign country…

By Grant Smith, reposted from Antiwar.com

The Virginia-Israel Advisory Board VIAB has one key difference with scores of privately funded state chambers of commerce created to foster closer economic integration between the United States and Israel while supporting the Israeli government’s policy agenda.

Originally created by an uncodified act in 2001, VIAB has been funded by Commonwealth of Virginia taxpayers. Its charter is to “advise the Governor on ways to improve economic and cultural links between the Commonwealth and the State of Israel, with a focus on the areas of commerce and trade, art and education, and general government.” VIAB is a pilot for how Israel can quietly obtain taxpayer funding and official status for networked entities that advance Israel from within key state governments.

According to emails recently released under Virginia’s Freedom of Information Act, VIAB’s lofty claims about creating Virginia jobs and mutually beneficial business opportunities faced growing skepticism inside the governor’s office. VIAB also uses state resources to fight Boycott, Divestment and Sanctions. BDS is a nonviolent movement to pressure Israel to stop violating Palestinian human rights. VIAB faced intense scrutiny over its handling of funds by the Virginia State Attorney General. Resistance to public scrutiny and oversight led VIAB to lobby for more “independence” from the governor in early 2018. This move sounded alarm bells at another Israel advocacy organization which feared that VIAB could face public backlash.

VIAB’s charter severely restricts who can exercise power on its board to the state Israel advocacy community. By law 13 of the 29-citizen members of the VIAB board had to be drawn from four Virginia-based Jewish community federations. Like other such federations across the nation, Virginia’s are heavily involved in advocating for Israel, fundraising and hosting candidate forums. In 2017 tax filings, the four federations that provide board members to VIAB raised a combined $20 million in tax exempt funding. Like other federations, these charities uniformly claimed to the IRS that they did not engage in any lobbying activities.

Jewish Federations try to change Virginia textbooks

Early in 2018, the federations that staff VIAB (PDF) attempted to ram through a series of controversial changes to Virginia K-12 textbooks with the help of an outside Israel advocacy organization, the “Institute for Curriculum Services.” The proposed edits to McGraw Hill, Prentice Hall, National Geographic and other publisher textbooks demanded they teach that Israel does not occupy any foreign territory and that Arabs alone were responsible for all crisis initiation in Middle East conflicts, among other dubious claims. When the stealth campaign was disclosed, it provoked an immediate “campaign for textbook accuracy” from the Virginia Coalition for Human Rights alongside prominent state educators. VCHR is a coalition of 16 organizations representing 8,000 Virginians.

VIAB makes aggressive claims about the return on investment it brings to Virginia’s economy, which are then trumpeted and celebrated by the local federations. One 2010 claim asserted “VIAB has added approximately 1,134 new jobs Virginia’s workforce that in turn have generated an estimated $38.4 million in state tax revenues over the past 10 years,” while complaining about a cut that brought VIAB’s state budget “below $130,000.” However, few of VIAB’s major initiatives have panned out.

VIAB’s work to bring Israeli airline El Al Dulles-to-Tel Aviv nonstop flights produced nothing after a decade of announcements, online petitions and $300 million investment infrastructure forecasts. In May of 2018, VIAB lamented that despite a visit by Governor McAuliffe to El Al headquarters in Israel, Dulles airport had been passed over in favor of San Francisco and Miami for El Al’s “next direct flights.” VIAB lobbying campaigns, meetings, state visits and petitions could apparently not overcome lack of market demand.

Veil of secrecy

VIAB maintains a veil of secrecy over some of its projects. In 2013, the VIAB board gave an aquaculture project the code name “Project Jonah” stating that “All Board members are asked to refer to the project by this code name. Leaked information could jeopardize funding opportunities from the State.”

Obtaining massive state and other local funding for Israeli projects is undeniably VIAB’s principal objective. VIAB boasted in 2015 that “Project Jonah has secured a $10 million grant conditional on meeting certain benchmarks including matching private funds. Other funds of at least $1 million have also been awarded in Tazewell County and additionally Virginia Tech was involved in securing $500,000 from Federal and local sources for R&D.” Documents reveal some VIAB board members have business ties to the Israel projects for which funding is sought. However, the profile of Israeli activity in Virginia also reveals the success of BDS. Few Israeli companies risk boycotts through greenfield foreign direct investment in Virginia by operating subsidiaries under their own Israeli parent organization. Instead, most attempt to license technology or engage in joint ventures with U.S. companies

VIAB thrived during Governor Terry McAuliffe’s administration (2014-2018). Among McAuliffe’s most generous out of state campaign contributors were Israel boosters Haim Saban and J.B. Pritzker. McAuliffe was a regular at off-the-record “no press allowed” appearances before Israel advocacy organizations where he was encouraged to talk about “the Virginia Advisory Board and its successes” But internal emails reveal how VIAB chafed under open meeting and sunshine laws and the commonwealth’s financial reins even under McAuliffe. After the governor’s office became skeptical about VIAB’s operations, VIAB deployed a strategy used for decades by Israel affinity organizations in crisis such as the Jewish Agency for Israel, the American Israel Public Affairs Committee (AIPAC) and the Zionist Organization of America (ZOA): a complete reconstitution.

Before stepping down at the end of the McAuliffe administration in January, Virginia Secretary of Commerce Todd Patterson Haymore complained in a private email (PDF) about VIAB’s job creation claims. “I can’t argue with the short annual report where they stated they helped create 127 jobs/$436k tax dollars; however, the annual report is likely the most inflated without merit that I’ve seen in my decade here.”

VIAB’s taxpayer funded anti-BDS lobbying inside the governor’s office blossomed. At a July 26, 2016 meeting at the state capitol, VIAB worked to implement a legislative version of the State of New York’s anti-boycott executive order. The Virginia General Assembly subsequently passed resolution HJ 177 which claimed that the BDS movement was hampering peace and preventing negotiations while claiming boycotts are not a legitimate accountability tactic. Across the nation, such Anti-boycott laws and resolutions have similarly passed with few organizations or entities claiming any financial role in lobbying for their passage. There may be a reason for the stealthy approach. Polling indicates most Americans oppose new US laws banning boycotts as a response to Israel’s human rights abuses.

Virginia Israel Foundation check to VIAB director

The VIAB came under the scrutiny of the Virginia Conflict of Interest and Ethics Advisory Council, when in July of 2017 VIAB handed departing executive director Ralph Robbins a check from the Virginia Israel Foundation. VIAB claimed the cash was not unlawful outside compensation or a bonus for a job well done, but rather a “farewell gift.” (PDF)

The Virginia Office of the Attorney General issued on May 22, 2017 a secret letter to the VIAB “regarding the selection and appointment of the position of Executive Director of the Virginia-Israel Advisory Board .” The VIAB apparently considered the letter a challenge to its authority to pick and install its own executive director without the governor’s interference. VIAB had already begun searching for a “suitable” successor executive director to Robbins by posting job descriptions on Israel advocacy organization websites.

In early 2018, VIAB shaped (PDF) and monitored HB1297, a new law designed to “keep the VIAB independent” by transferring funding and oversight of VIAB from the office of the governor to Virginia’s legislature and reducing the number of gubernatorial appointments from 13 to five.

After passage, the VIAB hoped it would gain the authority to hire its own staff (under the old authorizing law, the Office of the Governor served “as staff to the Board.”) VIAB would also no longer be subject to the governor’s oversight via control of the purse strings. VIAB chairman Norm Chaskin explained in a January 25, 2018 email (PDF) that the bill “adds back the requirement that the Governor and all other agencies shall assist the [VIAB] Board upon request…We believe this will accomplish what we have been talking about in our Board meeting for the last couple of years….Adding the word ‘independent’…shows that we are not part of any other agency or government office, which was the original idea in establishing the board.”

This VIAB independence did not include severing its state funding, since the legislation as proposed by VIAB (PDF) required, “all members shall be reimbursed for all reasonable and necessary expenses incurred in the performance of their duties…”

“May draw negative attention”

The VIAB’s move worried the Jewish Community Relations Council for Greater Washington’s executive committee, which warned via email (PDF) that “the request to grant Virginia’s Israel development activities special status, status that no other economic development group enjoys, may draw negative attention to VIAB and result in VIAB’s dissolution and absorption into Virginia’s greater economic development activities.”

However, the bill reconstituting VIAB passed Virginia’s House and Senate on March 20, 2018. VIAB felt liberated and quickly filed to cover with state funds the expenses of its handpicked executive director and committed anti-BDS evangelist Dov Hoch’s travel amounting to”$1,500-$2,000″ as he journeyed through Virginia to discuss VIAB with Virginia “Legislative Services” on his way back to Israel.

VIAB quietly operates as a taxpayer-funded lobbyist for a foreign country in the fifth most economically important state of the union. Whether VIAB ever faces the backlash feared by a fellow Israel advocacy organization may depend on the actions of vastly more representative Virginia-based grassroots organizations dedicated to conditioning state support for Israel on improving its deplorable human rights record.

Note: VIAB rebranded itself as the Virginia-Israel Advisory Authority as part of in its recent legislative reconstitution.

Grant F. Smith is the director of the Institute for Research: Middle Eastern Policy in Washington and the author of the 2016 book, Big Israel: How Israel’s Lobby moves America now available as an audiobook.