Washington Report on Middle East Affairs, December 2010, Pages 24-26

Two Cases

Holding AIPAC Accountable

Year-Long Drive to Regulate AIPAC as a Foreign Agent Continues

Grant F. Smith

On the morning of Nov. 4, 2009 I headed a four-person delegation to meet with the chief and top officials of the U.S. Department of Justice (DOJ) Foreign Agents Registration Unit. We had one hour to present a 387-page filing about why the American Israel Public Affairs Committee (AIPAC) should be required to register under the Foreign Agents Registration Act (FARA) as Israel's foreign agent in the U.S. While not a difficult case to make, we stayed an extra hour as the FARA enforcement team asked penetrating questions and took notes. The matter is still unresolved—but in the year since that meeting the case for regulating AIPAC has only grown stronger.

Under FARA, individuals and organizations who act in a political capacity for foreign principals are required to file regular public disclosure statements. Any American is entitled to review agent programs, receipts and disbursements in order to fully determine and even challenge foreign activities in the United States. They won't find any reports from AIPAC, however—despite the fact that tracing AIPAC's history by following the footsteps of its founder, Canadian-born Isaiah L. Kenen, leads straight to the Israeli Ministry of Foreign Affairs.

In 1948, Kenen was a charter member of the Ministry of Foreign Affairs' New York-based "Israel Office of Information (IOI)," where he worked in public relations. In that capacity he did indeed file FARA disclosures for the IOI and himself, detailing his expenditures for pamphlets, bulletins, statements and press releases. All of Kenen's public relations output had to be stamped with an official disclosure that they represented the policies and views of the State of Israel.

From the very beginning, however, the Justice Department cited IOI for deficiencies, including failure to disclose the existence of a separate branch operating out of the Israeli consulate in Los Angeles. The FBI later notified the FARA Section that the IOI was circulating literature without the required disclosures.

According to his book Israel's Defense Line, Kenen soon tired of the onerous FARA disclosure requirements. He wrote, "Israelis began looking for a lobbyist to promote the necessary legislation [on U.S. foreign aid to Israel]...would I leave the Israeli delegation for six months to lobby on Capitol Hill? There were other questions. Should I continue my registration as an agent of the Israel government? Was it appropriate for an embassy to lobby? Embassies talked to the State Department, and American voters talked to their congressmen."

On Jan. 17, 1951, Kenen visited FARA Section chief Nathan Lenvin, telling him frankly that he planned to leave IOI but continue public relations for the Israeli government. Lenvin told Kenen to keep filing FARA disclosures and even passed him the appropriate forms.

But Kenen never again filed as a foreign agent. Instead, the following month he set up a Washington, DC-based division within the American Zionist Council (AZC)—a New York umbrella organization whose members included Hadassah, the Zionist Organization of America, and other groups that worked in the U.S. for the creation of the state of Israel—and registered with Congress as a domestic lobbyist. On his disclosure forms to Congress Kenen declared that his lobbying for foreign aid to Israel would last for only six months.

Kenen's move from Israeli foreign agent to Washington, DC lobbyist attracted official notice. Comparing Kenen's memoranda circulating on Capitol Hill with those emanating from the Israeli Embassy, the U.S. State Department concluded that he should still be registering as a foreign agent.

In December of 1953, Kenen learned that the Eisenhower administration was looking into the AZC's use of tax-exempt charitable relief donations to lobby for a foreign government. So he staged yet another "reconstitution," advising the clerk of Congress that he was terminating his AZC work as of March 14, 1954 to run a "separate" and "new" organization called the "American Zionist Committee for Public Affairs" which would exist only "until adjournment of the 83rd Congress" (1953-55). Kenen continued to receive a quarterly $5,000 retainer from the AZC public relations division, however, which forwarded Kenen's payments to him on the direct order of the Jewish Agency in Jerusalem, a quasi-Israeli government organization.

In part because contributions dedicated for lobbying were not tax-exempt, meaning donations to the new organization were hard to come by, AZCPA was perennially cash-strapped. "Many [potential donors] could not understand why the Israeli government could not subsidize this modest undertaking," Kenen noted in Israel's Defense Line. "They did not realize that foreign agents were limited in expression and activity."

So the AZCPA soon began taking donations from less-than-legitimate sources. Aaron Weisberg, an associate of mobster Meyer Lansky who was Lansky's straw buyer of the Sands Casino, made several $500 contributions. Mobster John Factor, known as "Jake the Barber" for his stock frauds shaving investors in the United Kingdom, donated $1,000, as did arms smuggling associate Zimel Resnick. But it wasn't enough. So Kenen launched a new funding and lobbying vehicle, a newsletter he privately owned called the Near East Report—which today is published under AIPAC's roof by an associated nonprofit, Near East Research.

The Jewish Agency, the Israeli consulate in New York, and the AZC all poured funding into Kenen's Near East Report (NER). The subsidized newsletter was sent free of charge to influential publishers, opinion leaders, sympathetic allies, and all members of Congress. In his many NER articles, Kenen demanded that the U.S. back away from plans to restore some Palestinian refugees to their homes and properties in Israel.

NER was only the tip of a propaganda iceberg, however. A much broader seven-year, $5 million ($36 million in today's dollars) campaign fundamentally altered journalism about the Middle East in this country. AZC pressure tactics killed unfavorable coverage of Israel before it could be published in such newspapers as the Christian Science Monitor. The AZC and Kenen wrote, subsidized, and planted stories in the Saturday Evening Post, Reader's Digest, Life Magazine, women's magazines and even the Atlantic Monthly. The AZC public information division rallied support to pressure independent chains and newspapers to alter their Middle East coverage or face the consequences.

A secret 1962 AZC Magazine Committee report to the Jewish Agency conspiratorially gushed, "We cannot pinpoint all that has already been accomplished by this Committee except to say that it has been responsible for the writing and placement of articles on Israel in some of America's leading magazines...."

In order to give a more patriotic slant to his AZC lobbying, in an August 1959 letter to the congressional clerk's office Kenen renamed his operation the "American Israel Public Affairs Committee." According to AIPAC's lobbying disclosure statement, it was a "non-profit organization interested in foreign policy" and declared its duration would now be "infinite." As will be seen, however, he did not incorporate it as a separate entity until January 1963.

In 1961 a confidential Senate Foreign Relations Committee report urged investigating how "grey" foreign agent activities, such as a 1954 Israeli false flag terror attack on U.S. installations overseas, might be harming U.S. policy. In 1962 the committee launched a sweeping investigation of foreign agents active in the United States, delivering subpoenas and seizing documents at the Jewish Agency's New York offices, where it gathered up stacks of AZC lobbying and media progress reports as evidence of foreign money laundering through "conduits."

An original subpoena executed by Sen. J. William Fulbright, ordering Kenen to deliver all of his private Israel lobbying documents and testify under oath to the Senate Foreign Relations Committee, is among thousands of investigation documents contained in 67 boxes unsealed by the National Archives and Records Administration on July 23, 2010. Kenen had gotten wind of the impending investigation, however, and promptly absented himself from the United States, making an extended trip to the shah's Iran and Africa. Upon his return to the U.S. he was interviewed by the FBI, but the Senate subpoena was never served.

On Nov. 11, 1962 the Justice Department's FARA section, under then-Attorney General Robert F. Kennedy, ordered the AZC to begin registering as an Israeli foreign agent. On Nov. 29 the AZC centralized all of Kenen's former public relations activities under the control of one Ernest Barbarash, and finally ceased paying Kenen as a public relations consultant. On Dec. 10, an AZC memo ordered the immediate cessation of all Jewish Agency-subsidized purchases and mass distribution of the Near East Report.

Adrift and penniless in the lobbying division of an organization now targeted by the DOJ, Kenen quickly went into action. Two months after the Dec. 10 FARA order, he incorporated AIPAC as a separate entity for the first time in Washington, DC. In March of 1965, after nearly three years of intense resistance, the AZC filed a single compulsory FARA declaration with the Justice Department—then shut down. Under the authority of new Attorney General Nicolas Katzenbach, the FARA division kept the AZC's disclosure segregated from publicly accessible filings, only declassifying and releasing the "nonpublic" FARA filing in 2008. Today the AZC's most powerful constituent organizations (the Zionist Organization of America and Hadassah), along with 50 others, make up AIPAC's executive committee.

During our November 2009 meeting with the DOJ we demonstrated how this history inevitably led to AIPAC's espionage abuses against the U.S. investigated by the FBI in 1985 and 2005. It soon became clear, however, that the FARA unit will not enforce the law until more members of the public demand it. In the 1960s, the Senate revealed in detail how lax FARA enforcement was corrupting U.S. governmance at all levels. This pressure forced the reluctant DOJ to take action against not only the Israel lobby but against covert operatives for assorted Latin American dictators. When FARA was still young, the DOJ successfully shut down stealth fronts for Soviet Communists and Nazis. The Israel lobby's reconstituted ability to influence America's mass media and strike back covertly by pulling the strings of political campaign contributions is more insidious. AIPAC has proactively insinuated itself across many nodes of influence within America in a bid to make itself "too interconnected" to regulate.

Today most Americans know stunningly little about the Israel lobby's cost to the U.S., even after publication of such highly popular books as Paul Findley's They Dare Speak Out and the more recent The Israel Lobby and U.S. Foreign Policy by Professors John Mearsheimer and Steven Walt (both available from the AET Book Club). The AZC's declassified media manipulation strategies—now available online at <www.irmep.org/ila/azc>—not only are still in active use, but are more sophisticated and widespread than ever.

FARA is one of the most noble and sensible transparency laws ever passed. It codifies the right of all Americans to observe and challenge the true origins of propaganda and coordinated lobbying aimed at promoting foreign interests over those of the commonwealth. It embodies George Washington's farewell address warning against the inevitable outcome of foreign "passionate attachments." But FARA has repeatedly collapsed when pitted against the lobby's demonstrated ability to reconstitute itself in order to avoid accountability.

But new pressures to regulate Israel's lobby are building. It is now clear to many Americans that they have unwittingly impoverished themselves by engaging in unnecessary war promoted by the Israel lobby's purposeful deceptions and influence over government. The U.S. tax base has long been distorted by massive aid and tax-deductible donation outflows used illegally overseas in sordid ways that blow back on America. The U.S. economy has been slowly diverted away from trillions in productive opportunities with willing, natural, and qualified trading partners in the Arab world. The lobby demands ever more wasteful production of weapons and services of no economic or developmental utility, while Congress continues to subsidize Israel's competing high-tech and weapons sectors.

Americans have been the losers in FARA's failed battle to regulate Israel's American lobby. As AIPAC again pushes us toward war and waste in the name of Israel, we must all demand restoration of the rule of law in America—starting with FARA—before it is too late.

Grant F. Smith is director of the Washington, DC-based Institute for Research: Middle East Policy, Inc. (IRmep).

"Fiddlesticks!" Federal Judge Dismisses Case Against FEC

Janet McMahon

In a Sept. 6, 2010 decision, U.S. District Court Judge Richard J. Leon brought to an end the "case against AIPAC" filed on Jan. 12, 1989 by former ambassadors, congressmen or government officials James E. Akins, George Ball, Richard Curtiss, Paul Findley, Robert J. Hanks, Andrew Killgore and Orin Parker. In the intervening two decades three of the plaintiffs—Akins, Ball and Hanks—have died.

In his opinion, Judge Leon seemed exasperated that the seven men who brought the lawsuit against the Federal Election Commission (FEC) had not packed up their bags and gone home long ago, instead of pursuing their case all the way to the Supreme Court. "Unfortunately, this appellate odyssey had only just begun!" he wrote in describing a 1992 challenge to the FEC's ruling that AIPAC was not a political committee—and hence not required to reveal its membership, funding sources and expenditures.

"The FEC has sole jurisdiction to civilly enforce the Federal Election Campaign Act of 1971," Judge Leon noted, the purpose of which is "to limit spending in federal election campaigns and to eliminate the actual or perceived pernicious influence over candidates for elective office that wealthy individuals or corporations could achieve by financing the 'political warchests' of those candidates."

The FEC maintained that AIPAC is a "membership organization" rather than a political committee. Coincidentally, the above act specifically exempts "any communications by any membership organization...to its members...if such membership organization...is not organized primarily for the purpose of influencing the nomination for election, or election, of any individual to federal office" (the "major purpose" requirement).

The Supreme Court heard the case on Jan. 14, 1998, and issued its ruling, written by Justice Stephen Breyer, on June 1, 1998. As former Rep. Paul Findley described it in the July/August 1998 issue of the Washington Report on Middle East Affairs:

Breyer's decision avoided the [political committee] definition issue because FEC was "currently considering a new rule that could make the decision irrelevant to AIPAC's status." Speculating that a proposed rule change by the FEC would view most AIPAC expenditures as "membership communications," Breyer's decision concluded that, if approved, the proposal would exempt AIPAC from the campaign law and the controversy over FEC's "major purpose" test would no longer have importance.

Under normal circumstances, the court would be expected to rule that, under present law and existing FEC rules, the "major purpose" test is invalid. Therefore, following the normal logic of judicial decision-making, until such time as the law and/or rules are changed, AIPAC must make the required public disclosures. Instead, the court simply told the FEC how to duck the issue....

The decision, of course, left AIPAC officials smiling broadly. Indeed, although not a party in the case before the court, AIPAC filed a friend of the court brief which suggested the precise course Breyer's decision cited. Thomas G. Hungar, an attorney for AIPAC, said the high court "did exactly what we asked." Under the proposed changes in FEC operations, AIPAC would "clearly qualify" as a membership group exempt from public disclosures of financial operations.

The Supreme Court sent the case back down to the lower court, which then sent it back to the FEC, which proceeded to adopt new membership rules. As Judge Leon writes in his opinion, "The FEC found that 'the issue of AIPAC's political committee status during the period covered by the complaint...has, as anticipated by the U.S. Supreme Court, become effectively moot" [italics added].

Toward the end of his 25-page ruling, Judge Leon writes, "the plaintiffs argue that the combination of communications urging AIPAC members to support unidentified candidates with 'Campaign Update' reports that include information identifying which candidates rate best on issues relevant to AIPAC [that would be Israel] are, in effect, express advocacy. Fiddlesticks!"

We're willing to bet that, were the judge to avail himself of the opportunity to peruse the FEC reports filed by the nearly 30 pro-Israel PACs active in the 2010 election, he'd be hard put to explain how they magically seem to give to the exact same candidates. Fiddlesticks, indeed.

Janet McMahon is managing editor of the Washington Report on Middle East Affairs.

SIDEBAR

From Pro-Israel PACs to Pro-Israel Foreign Nationals?

Barely six weeks after Judge Richard J. Leon dismissed Akins vs. FEC, the Federal Election Commission was sued by Canadian Benjamin Bluman and Canadian-Israeli Dr. Asenath Steiman. Both foreigners live in New York City, where Bluman is an attorney who will be sworn into the New York Bar on Nov. 22, 2010 “and intends thereafter to join the American Bar Association,” and Steiman is a medical resident at Beth Israel Medical Center and a member of the American Medical Association. Bluman currently has non-immigrant TN status, which is good for three years but can be renewed indefinitely. Steiman is in the U.S. on non-immigrant J-I status, also good for three years but subject to extension to a maximum of seven years.

The lawsuits describe both plaintiffs as “politically active,” Bluman’s causes being “protecting the environment, recognizing same-sex marriage, and ensuring that ”˜net-neutrality’ is enshrined into law.” Steiman, who was a member of the Conservative Party of Canada, “is particularly passionate about preventing a government-takover of the health-care system in the United States. She also strongly supports tax reductions and policies that encourage entrepreneurship by increasing economic liberty.” No mention is made of her position on U.S. policy toward Israel, but one rather doubts that an Israeli citizen would be indifferent to that.

Bluman and Steiman desire to “express [their] views...by contributing money to candidates for political office and by independently advocating for such candidates.” Both also expect that “over the coming years, while [they reside] in the United States, [they] will want to make...contributions and expenditures in support of other candidates for local, state and federal office.” However, the Alien Gag Law currently prevents any foreign national other than a permanent resident from making contributions to candidates or to political party committees, or from making any independent expenditure in connection with a local, state or federal election.

Bluman and Steiman argue that the Alien Gag Law violates their rights to free speech under the First Amendment to the (U.S.) Constitution.

One liberal and one conservative? From our friendly neighbor to the north? What could be the harm in that? A final question: How many Israeli citizens currently reside in the U.S.? —J.M.

From Pro-Israel PACs to Pro-Israel Foreign Nationals?

Barely six weeks after Judge Richard J. Leon dismissed Akins vs. FEC, the Federal Election Commission was sued by Canadian Benjamin Bluman and Canadian-Israeli Dr. Asenath Steiman. Both foreigners live in New York City, where Bluman is an attorney who will be sworn into the New York Bar on Nov. 22, 2010 “and intends thereafter to join the American Bar Association,” and Steiman is a medical resident at Beth Israel Medical Center and a member of the American Medical Association. Bluman currently has non-immigrant TN status, which is good for three years but can be renewed indefinitely. Steiman is in the U.S. on non-immigrant J-I status, also good for three years but subject to extension to a maximum of seven years.

The lawsuits describe both plaintiffs as “politically active,” Bluman’s causes being “protecting the environment, recognizing same-sex marriage, and ensuring that ”˜net-neutrality’ is enshrined into law.” Steiman, who was a member of the Conservative Party of Canada, “is particularly passionate about preventing a government-takover of the health-care system in the United States. She also strongly supports tax reductions and policies that encourage entrepreneurship by increasing economic liberty.” No mention is made of her position on U.S. policy toward Israel, but one rather doubts that an Israeli citizen would be indifferent to that.

Bluman and Steiman desire to “express [their] views...by contributing money to candidates for political office and by independently advocating for such candidates.” Both also expect that “over the coming years, while [they reside] in the United States, [they] will want to make...contributions and expenditures in support of other candidates for local, state and federal office.” However, the Alien Gag Law currently prevents any foreign national other than a permanent resident from making contributions to candidates or to political party committees, or from making any independent expenditure in connection with a local, state or federal election.

Bluman and Steiman argue that the Alien Gag Law violates their rights to free speech under the First Amendment to the (U.S.) Constitution.

One liberal and one conservative? From our friendly neighbor to the north? What could be the harm in that? A final question: How many Israeli citizens currently reside in the U.S.? —J.M.