Jewish settlements constitute a grave threat to US national interests and to American policy objectives in the Middle East. Funding of settlement projects in the West Bank and East Jerusalem by domestic organizations harms our security and moral standing. Furthermore, these domestic settler organizations are subsidized by US taxpayer money. However, they are subject to US anti-discrimination laws and the US Criminal Code. Congress, the Obama administration and the Treasury Department should implement existing US laws against these organizations.

Settlements Pose a Threat to US Security

Americans are slowly coming to the realization that the Israeli-Palestinian conflict is harming America’s national interests. . General Petraeus’ March 2010 statement to Congress is one shining example of this realization:

The enduring hostilities between Israel and some of its neighbors present distinct challenges to our ability to advance our interests in the AOR [Central Command's "area of responsibility"]… The conflict foments anti-American sentiment, due to a perception of U.S. favoritism for Israel. Arab anger over the Palestinian question limits the strength and depth of U.S. partnerships with governments and peoples in the AOR and weakens the legitimacy of moderate regimes in the Arab world.

The Obama administration, like its predecessors, views the settlements as the biggest obstacle to an Israeli-Palestinian peace. Settlement building challenges the very premise of a two-state solution as endorsed by the Quartet of the United States, Russia, the United Nations, and the European Union. It also flies in the face of the Arab Peace Initiative whose basis is also a two-state solution. Hillary Clinton has called the settlements “an obstacle to peace”, rendering the US-sponsored peace process dead on arrival. Similarly Joe Biden condemned the building of settlements in East Jerusalem, which “threatened to undermine US efforts for peace in the region.” Moreover, the discriminatory policies underlying settlement building, housing and roads for Jews only, flies in the face of American core values of freedom of movement and equality of treatment.

Depth and Breadth of Settlement Enterprise

According to both, B’Tselem, an Israeli human rights organization, and the CIA factbook, 500,000 Israeli Jews, nearly 10% of Israel’s Jewish population lives in the West Bank and East Jerusalem, in lands constituting 42% of the occupied territories. This large population transfer of Israeli Jews renders a two-state solution impossible, as the settlers are unlikely to acquiesce to live as Palestinian citizens once a Palestinian state is established. Even proponents of a one-state solution oppose settlements, citing the illegality of their ethnically and religiously segregated nature.

A recent New York Times article presents evidence of American organizations providing large amounts of funds to promote settlements in the West Bank, in effect, increasing  the size and depth of the settlement project.  This runs counter to America’s stated foreign policy as well as America’s national security interests. What’s more the Jewish-American and Evangelical-American organizations are listed as tax-exempt non-profits whose contributions are tax deductible, effectively forcing the United States government to finance initiatives counter to the United States’ policy objectives.

US Laws Prohibit Settlement Funding

While the New York Times contends that US laws do not prohibit the building of schools and synagogues outside the US, there are in fact laws that would amount to prohibiting the use of federal money to promote a project such as that of settlements in the West Bank and East Jerusalem.  For one, all tax-exempt and tax-deductible organizations are subject to anti-discrimination laws in employment and the provision of services. The financing by such organizations of Jewish-only roads and Jewish-only settlements in a majority Palestinian territory flies in the face of such laws, which should jeopardize their tax- exempt status. If these laws are applied, the IRS should work immediately to withdraw the tax-exempt status of these organizations.

Furthermore, as noted by the Institute for Research in Middle East Policy, existing laws prohibit Americans from engaging in any activity that harms the people or the property of a friendly nation. Title 18, Section 960 of the US Criminal Code states clearly that Americans who fund the occupation of a friendly nation can be fined or imprisoned or both.  The Palestinian Authority, which is internationally recognized as the representative of the Palestinian people, is at peace with the United States. The law is expanded to include the killing, maiming or the damage to property of any nation in Section 956 of the same Title in the US Criminal Code.

Finally, as Yousef Munnayer recently pointed out in Foreign Policy magazine, Executive Order 12947 states that acts that "disrupt the Middle East peace process constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States" and funding of these acts is illegal and prohibited. This Clinton era Executive Order provides the Department of Treasury with the impetus and obligation for monitoring funding to Jewish settlements in the West Bank and East Jerusalem under the Patriot Act, much as it has drained the funding of terrorist organizations.

It is time for Congress, the Obama administration, and, specifically, the Treasury Department to act where Prime Minister Netanyahu has failed to do so. Nothing less than America’s security, legal legitimacy, and moral authority is dependent on their swift action.