I recently wrote about how the U.S. tax-code grants tax-exempt status to American groups fund raising to aid illegal Israeli settlements on the West Bank; advancing goals in violation of international law and the American government’s stated policy of opposing settlements.

The work that these organization do is no small chicken. “IRS records identified 28 U.S. charitable groups that made a total of $33.4 million in tax-exempt contributions to settlements and related organizations between 2004 and 2007,” Washington Post columnist David Ignatius reported.

It is clear what needs to be done. If Obama is serious about stopping Israeli settlements and bringing about peace, then a good first step should ban any American donations towards settlements. And I mean that they should be banned outright not just have tax-exemption revoked. The United States government should declare donations to be contrary to U.S. goals and interests, and contrary to international law. Because such donations prop-up illegal behavior they should be banned. The United States governments bans donations to terrorist groups and it also banned American aid, private or public, to reconstruction efforts in Lebanon after Israel’s war because, it states, aid would probably filter to Hezbollah. If the U.S. can ban aid to help the Lebanese rebuild all because the aid may filter to Hezbollah, then the government can and should ban aid to illegal, violent and apartheid-based Israeli settlements.

And now the American-Arab Anti-Discrimination Committee has filed a motion with the U.S. Treasury Department to investigation these organizations. The organization stated in their press release:

Today, the American-Arab Anti-Discrimination Committee (ADC) filed multiple administrative complaints with the US Department of the Treasury, including the Internal Revenue Service (IRS), requesting investigations into the activities of organizations claiming tax-exempt status under section 501(C)3 of the US Tax Code yet allegedly raising funds for the development of illegal settlements in the occupied West Bank. Among other allegations, the ADC complaints allege that these organizations are using assets and income in direct violation of their addressed purpose, and to support illegal and terrorist activities abroad

They added,

The construction of settlements in occupied territory is illegal under international humanitarian law. The use of tax-exempt status to raise funds for these types of activities is also illegal under US law. Further, it is a central part of stated US policy toward the Arab-Israeli conflict that settlement expansion and construction must stop. In filing its complaints, ADC seeks to ensure that US tax laws are not being exploited, and violated, by certain organizations which are allegedly using their tax-exempt status contradictory to stated US policies on this issue.

Now the question is will anything come out of this? Will the American government end the tax-exempt status or better still band fund raising for illegal activity all together?

I doubt it. The Israel lobby would strongly protest. Further, why would the U.S. government enforce a private restriction on aid when the U.S. government is itself giving Israeli aid and loans that have been used for West Bank settlements?

And, yes, Virginia there is an Israel lobby.