1963: The Year The Israel Lobby Transcended US Law

By Grant Smith

Fifty years ago this May, the Senate Foreign Relations Committee opened a series of unprecedented hearings investigating the clandestine activities of foreign agents active in the United States. The investigation focused most intensively on the operatives and financing of key Israel lobbying organizations such as the American Zionist Council, the American Israel Public Affairs Committee, and the American Section of the quasi-governmental Jerusalem-based Jewish Agency. Thanks to a secret memo only declassified in 2010, the public may now know what fears motivated the hearings.

The March 17, 1961 staff report expressed concerns that “indigenous groups based on racial or national origins have been organized in the United States, and have often concentrated on influencing United States foreign policy in directions designed primarily to promote the interests of other states.” The Senate was particularly – though not exclusively – concerned about Israel-coordinated overseas provocations intended to tripwire the United States into action. “Operation Susannah,” an all-but-forgotten 1954 Israeli false flag terror attack on U.S. facilities in Egypt designed to keep international forces stationed in the Suez Canal zone is mentioned twice as a reason for investigating “how they do it.” Although such a line of inquiry was clearly “explosive” the Senate proposal included having “testimony on the Lavon Affair, and similar ‘gray area’ activities.”

The Senate and a parallel Justice Department investigation uncovered a massive money-laundering scheme by which the Jewish Agency – using its access to Israeli government funding and tax exempt donations from the United States – illegally funneled tens of millions into public relations and lobbying efforts conducted by the top U.S. lobby – the American Zionist Council. Isaiah Kenen, the leader of the AZC’s unincorporated lobbying division called the American Israel Public Affairs Committee – also received Jewish Agency funding, laundered through his privately-owned lobbying newsletter.

The Justice Department ordered the AZC to begin registering under the 1938 Foreign Agents Registration Act. The AZC fought the order before finally shutting down, but it was a pyrrhic victory. The AIPAC lobbying division split off six weeks after the order, incorporating in Washington and applying for IRS tax-exempt status in 1967.

The Jewish Agency’s American Section, forced by the Justice Department to reveal its secret Israeli government funding and legislative powers in the Knesset, also slipped the bonds of registration. In 1971 the New York branch told the Justice Department it wasn’t an agent of the Jewish Agency in Israel after all, but rather yet another foreign sister organization, the World Zionist Organization. The Justice Department thought the paper reorganization, which didn’t change staff, executives, or even office space “sketchy.” (PDF) But according to a recent Congressional Research Service report(PDF) by 1973 the Jewish Agency began receiving $25 million a year in U.S. taxpayer funding for its settlement and other activities – totaling $460 million by 1991. CRS reveals that between 2000 and 2013 the Jewish Agency will have received another $534 million ($41 million per year) in funding from Congress – none of it easily auditable by U.S. taxpayers.

But – as might now be expected – the Jewish Agency has never stopped trying to influence Americans even as tax dollars flow and the Justice Department’s FARA division sits idly by. Between 2002-2009 the Jewish Agency funded the perennial “peace processor” Dennis Ross at an Israeli “think tank” called the Jewish People Policy Planning Institute. The U.S. taxpayer-funded Jewish Agency has more recentlyissued a formal demand that President Barack Obama commute the sentence of Israeli spy Jonathan Pollard.

A half-century after the attempted regulation of Israel lobbies under FARA failed, it is productive to image what might be different today if AIPAC in particular had been properly registered under the Act. When AIPAC director Morris Amitay was caught red-handed mishandling classified missile secrets in 1975, he could have been prosecuted under FARA. When AIPAC and an Israeli diplomat purloined the entire 300-page book of classified trade secrets compiled from 70 U.S. industry groups opposed to unilateral trade concessions for Israel in 1984, they could have been prosecuted for failing to report their clandestine subversion of due process. When in 2005 Steven J. Rosen and Keith Weissman met with Israeli diplomats during efforts to pass classified information to the press they thought could trigger a U.S attack on Iran, FARA consequences would have awaited them all.

However, because the U.S. Department of Justice has unilaterally abrogated its responsibility to enforce FARA, people, ideas, money and propaganda campaigns continue to secretly slosh freely between Tel Aviv and Israeli fronts in America with taxpayer funds thrown into the toxic brew. It is hard to imagine the intense and growing drumbeat for yet another unnecessary war in the Middle East on false premises would be sounding at all if the Justice Department spent as much time upholding FARA as it did prosecuting justified whistle blowers, entrapping hapless would-be “Islamist terrorists” and formulating immoral legalese justifying ever more outrageous new executive powers.