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Last update - 09:45 17/08/2009
U.S. group invests tax-free millions in East Jerusalem land
By Uri Blau, Haaretz Correspondent
Tags: Irving Moskowitz 

American Friends of Ateret Cohanim, a nonprofit organization that sends millions of shekels worth of donations to Israel every year for clearly political purposes, such as buying Arab properties in East Jerusalem, is registered in the United States as an organization that funds educational institutes in Israel.

The U.S. tax code enables nonprofits to receive tax-exempt status if they engage in educational, charitable, religious or scientific activity. However, such organizations are forbidden to engage in any political activity. The latter is broadly defined as any action, even the promotion of certain ideas, that could have a political impact.

Financing land purchases in East Jerusalem would, therefore, seem to violate the organization's tax-exempt status.
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Daniel Luria, chief fund-raiser for Ateret Cohanim in Israel, told Haaretz Sunday that the American organization's registration as an educational entity stemmed from tax considerations.

"We are an umbrella organization that engages in redeeming land," he said. "Our [fund-raising] activity in New York goes solely toward land redemption."

Although Ateret Cohanim also operates a yeshiva, Ateret Yerushalayim, in the Muslim Quarter of Jerusalem's Old City, fund-raising for the yeshiva is handled by a different organization: American Friends of Yeshivat Ateret Yerushalayim."

American Friends of Ateret Cohanim was founded in New York in 1987. Like all tax-exempt organizations, it must file detailed annual returns with the U.S. Internal Revenue Service. An examination of them reveals that the organization describes its "primary exempt purpose" as: "[to] provide funding for higher educational institutes in Israel."

"That's because of the tax issue," Luria said, explaining that due to American law, the American Friends organization "has to be connected in some fashion with educational matters."

He also estimated that 60 percent of Ateret Cohanim's money is raised in the U.S.

The Friends organization's most recent return, filed in 2008 for fiscal 2007, shows that it raised $2.1 million in donations that year. Of this, $1.6 million was transferred to Ateret Cohanim in Israel.

The remainder was used to cover administrative overhead, including fund-raising expenses and an $80,000 salary for Shoshana Hikind, the American organization's vice president and de facto director, whose husband Dov is a New York state assemblyman and well-known supporter of the Israeli right.

The organization also raised substantial sums in previous years: $1.3 million in 2006, $900,000 in 2005 and about $2 million in 2004.

By comparison, American Friends of Yeshivat Ateret Yerushalayim raised only $189,000 in 2007.

In its IRS returns, American Friends of Ateret Cohanim said its purpose is to "promote," "publicize" and "raise funds for" Ateret Cohanim institutions in Israel. These institutions, it continued, "encourage and promote study and observance of Jewish religious traditions and culture."

In reality, Ateret Cohanim in Israel focuses mainly on purchasing Arab property in East Jerusalem. Since its founding in the 1970s, it has bought dozens of Arab buildings for Jews to reside in. Just this April, for instance, it moved Jewish families into an Arab house it purchased in the Muslim Quarter.

One noteworthy donor to its Friends organization is casino magnate Irving Moskowitz, a well-known supporter of rightist causes, who also owns the Shepherd Hotel in East Jerusalem. That hotel made headlines recently when Moskowitz obtained a permit to build 20 apartments for Jews there, sparking angry protests from the U.S. government.

In response, Ateret Cohanim chairman Mati Dan insisted that the Friends organization "is an independent organization that decides for itself whom to fund." Moreover, he added, "we engage in education constantly ... I don't know what Daniel Luria told you, but we are active in the field of [educational] institutions."

As of press time, no comment had been obtained from the Friends organization.

Nir Hasson contributed to this report.

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      1.   Good job Haaretz! 09:38  |  Reut 17/08/09
      2.   What`s your point? 09:52  |  fedup 17/08/09
      3.   Good News 09:58  |  Chaim Ben Kahan 17/08/09
      4.   If it Walks Like a Duck 10:04  |  Mark of Lewiston 17/08/09
      5.   Daniel Luria 10:13  |  Yaakov 17/08/09
      6.   The point is that this organization is committing fraud! 10:27  |  Umm Einav 17/08/09
      7.   Just as if the Obama administration didn`t know 10:46  |  Chanalau, Tova 17/08/09
      8.   It`s not about politics. 11:44  |  Gilad 17/08/09
      9.   Please keep investing in a UNITED Israeli controled Jerusalem 12:07  |  zionist forever 17/08/09
      10.   Its better to let the Arab OIl Sheiks Buy Israel 12:16  |  Lemmings Hotline 17/08/09
      11.   #1 Reut 13:30  |  Filipe 17/08/09
      12.   So what? 13:45  |  Swiss Racoon 17/08/09
      13.   #3Chaim Ben Kahan 13:46  |  Abd Mutalip bin Abdu 17/08/09
      14.   Islamic Group and Double Standards 14:33  |  Abe 17/08/09
      15.   One Day These Organizations Will Purchase the Property of Leftist 15:05  |  Monitor 17/08/09
      16.   Let`s continue this 15:24  |  Christopher 17/08/09
      17.   # 12 swiss 15:28  |  Axel 17/08/09
      18.   Universities? 16:11  |  College Student 17/08/09
      19.   shifting the argument 16:43  |  lior 17/08/09
      20.   Haaretz writer`s comical misrepresentation of US tax laws 17:05  |  Dr. L. Brnd 17/08/09
      21.   To 18 - No they will not 17:18  |  Dan 17/08/09
      22.   Since there is no such entity as "East Jerusalem", the title of 17:32  |  Amihai 17/08/09
      23.   If illegal - take them to court 19:19  |  David 17/08/09
      24.   It`s Not Illegal for Non-profit Org. to Buy Land 22:06  |  Jane 17/08/09
      25.   # 22 amihai 22:07  |  Axel 17/08/09
      26.   #22 GO BACK TO SCHOOL 22:24  |  Naftali Neuberger 17/08/09
      27.   Ameerican investments in the occupation 23:10  |  Iman Heijstek 17/08/09
      28.   Mark of Lewiston & check the Saudis investments in Israel also. 23:39  |  petra 17/08/09
      29.   I`d like them to explain what land redemption is? 00:03  |  Marc Leb 18/08/09
      30.   That`s some fine investigative reporting Haaretz... 00:55  |  BBSNews 18/08/09
      31.   How about an article on where Peace Now gets its funding from 02:58  |  Zev 18/08/09
      32.   Who`s Land is it Anyway?? 02:59  |  Suzy 18/08/09
      33.   Excellent Journalism 03:35  |  liz benard 18/08/09
      34.   Olive oil busines upturn 03:44  |  ky 18/08/09
      35.   Audit them, fine them, and seize their properties 04:05  |  binny 18/08/09
      36.   #24: Laughable 04:48  |  Ariel 18/08/09
      37.   ariel 25 06:50  |  Anthony 18/08/09
      38.   zionist forever 08:16  |  D.Hussey 18/08/09
      39.   in all IRS fairness 17:23  |  Larry Cohen 18/08/09
      40.   Petre - Saudi CharitiesTax Deductions 17:23  |  Mark of Lewiston 18/08/09
      41.   Lies 22:47  |  Mike 18/08/09
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