Funding Hate

Oct–Nov 2003

Part 1: Ford Funded Durban Activists

In August 2001, thousands of human rights activists from around the globe gathered in Durban, South Africa, for a United Nations conference that participants hoped would address racial injustice plaguing humanity, from Rwanda to Sri Lanka to the United States. But after more than a year of preparatory conferences held in Iran, Switzerland, Chile, France and Senegal, it became clear to Israeli officials and Jewish organizational leaders that Palestinian non-governmental organizations, or NGOs, and their allies, had manipulated the agenda of the U.N. World Conference Against Racism into a focused indictment of Israel as an illegitimate apartheid, colonial and genocidal regime.

Moreover, the proposed language of conference resolutions would deny or dilute the Holocaust and espouse an openly anti-Semitic stance.

Many Western leaders, including U.S. Secretary of State Colin Powell, declined to attend what U.S. Rep. Tom Lantos (D-Calif.), a member of the American delegation to the conference, termed “a transparent attempt to de-legitimize the moral argument for Israel’s existence.”

As expected, anti-Israel agitation, anti-Zionist propaganda and blatant antisemitism permeated the eight-day Durban affair. Posters displaying Nazi icons and Jewish caricatures, anti-Israel protest marches, organized jeering, inciting leaflets and anti-Jewish cartoons were everywhere, as was orchestrated anti-American agitation.

A virulent resolution drafted by non-governmental organizations at the Durban conference declared Israel a “racist apartheid state” guilty of “genocide and ethnic cleansing.” The spectacle was so noxious that Powell withdrew the American delegation.

Who financed a number of the groups at Durban that printed and distributed these materials, purchased advertising and conducted workshops?

“No one knew where the money was coming from to fund all these NGOs,” remembers Judith Palkovitz of Pittsburgh, Hadassah general secretary and a delegate to Durban. “I assumed it was a foreign group — say Saudi Arabia.”

When asked, one Jewish communal leader after another, and several State Department officials, also guessed: Saudi Arabia.

They were wrong.

The Ford Foundation, one of America’s largest philanthropic institutions — and arguably the most prestigious — was a multimillion-dollar funder of many human rights NGOs attending Durban.

That is the conclusion of a two-month JTA investigation, involving interviews with dozens of individuals in seven countries, as well as a review of more than 9,000 pages of government and organizational documents.

Ford — which was endowed with funds donated by Henry and Edsel Ford but no longer maintains any ties to the Ford Motor Company — has long been known as a funder of Palestinian causes.

But most observers did not suspect the extent of the foundation’s involvement in funding of groups that engage in anti-Zionist, anti-Semitic and pro-Palestinian activities both inside and outside the Middle East.

With hundred of millions of dollars being pumped into Mideast NGOs by numerous private foundations here and in Europe, government and communal officials are raising significant questions about transparency, how the money in Palestinian areas is being used and whether funders such as the Ford Foundation are exercising proper controls.

Increasingly, federal agencies concerned with fighting terrorism are asking: When money goes in one NGO’s pocket, where does it go and whom does it benefit?

The Jewish representatives at Durban “didn’t understand the efforts, the financing and the organization that went into hijacking the conference,” recalls Reva Price, Washington representative of the Jewish Council for Public Affairs and a Durban delegate.

“We knew we were walking into problems because of what happened in the early meeting in Teheran,” Price said. “But we didn’t understand how organized the opposition and what a well-financed campaign it was.”

Many Jewish organizational officials who participated in the long process complained that a key organization responsible for the methodical hijacking of the conference was the Palestinian Committee for the Protection of Human Rights and the Environment, which operates under the acronym LAW.

LAW officials took leadership positions on the Durban conference steering committees, conducted workshops and even sponsored a pre-conference mission to the West Bank and Gaza Strip for South African delegates, to convince them that Israel was an apartheid state.

“LAW was instrumental in creating the anti-Zionist and anti-Semitic focus at Durban,” confirmed Andrew Srulevitch, executive director of U.N. Watch, a Geneva-based group that monitors the world organization.

But it was not just LAW. The Palestinian NGO Network, or PNGO, an umbrella organization of some 90 Palestinian NGOs, as well as many of its constituent groups, diligently became embedded in the conference bureaucracy that created the hostile environment at Durban.

PNGO led the move to craft an NGO resolution that would “call upon the international community to impose a policy of complete and total isolation of Israel as an apartheid state,” including “the imposition of mandatory and comprehensive sanctions and embargoes, [and] the full cessation of all links (diplomatic, economic, social, aid, military cooperation and training) between all states and Israel.”

Durban was not a one-time investment for the Ford Foundation — a major funder of LAW and PNGO.

Indeed, through its Cairo office, Ford has extended more than $35 million in grants to some 272 Arab and Palestinian organizations during the two-year 2000-2001 period alone — the most recent years for which data is available — plus 62 grants to individuals that total more than $1.4 million, according to Ford’s Web site, as accessed in mid-October 2003.

Since the 1950s, the foundation’s Beirut and Cairo offices have awarded more than $193 million to more than 350 Middle East organizations, almost entirely Arab, Islamic or Palestinian.

Ford’s Web site, at www.fordfound.org, offers detailed information about its Middle East grants. On the site as of mid-October, “Palestine” is frequently mentioned on its Mideast pages, but Israel’s name is absent. Moreover, the Web site’s shaded map of the geographical region from Egypt to Lebanon and Jordan blanks out over Israel’s territory, even though Ford does make grants to both Jewish and Arab organizations in Jerusalem.

Initially, despite more than two dozen requests by phone and in writing over a period of several weeks, the Ford Foundation’s communications vice president Alex Wilde, deputy media director Thea Lurie and media associate Joe Voeller refused to answer any questions or clarify any issues regarding the foundation’s funding of groups engaged in anti-Israeli agitation and anti-Semitic or anti-Zionist activity.

However, after this investigation was completed, Wilde did send a six-page written statement, declaring, “We have seen no indication that our grantees in Durban or elsewhere engaged in anti-Semitic speech or activities. The Foundation does not support hate speech of any kind.”

Wilde added: “Some of our human rights and development grantees have certainly been critical of policies and practices of the Israeli government insofar as these discriminate against Palestinians or otherwise violate their rights, according to internationally agreed human rights standards and international law.”

“We do not believe that this can be described as ‘agitation,’ ” the statement asserted.

Both LAW and PNGO confirmed that their Ford funds were pivotal.

“Ford has made it possible for us to do much of our work,” a senior LAW official in Jerusalem said in an interview.

Since 1997, LAW has been the recipient of three Ford grants, totaling $1.1 million, to engage in “advocacy” and participate at international conferences, according to LAW officials. A Ford Foundation official’s check of the charity’s confidential computer databases confirmed the information.

Reached in Ramallah on her cell phone, PNGO program coordinator Renad Qubaj recalled her coordination of activities in Durban.

“In Durban, for sure we published posters saying, ‘End the occupation,’ things like that,” Qubaj said, “and we published a study, had a press conference, organized our partners and protest marches.”

Asked about finances, she added, “Unfortunately we are very dependent on the international funds. Not just PNGO but all the Palestinian NGOs — 90 of them in our group. We get very little money from the Arabs — just needy family cases. Ford is our biggest funder.”

Allam Jarrar, a member of the 11-person PNGO steering committee network, and one who helped organize the events at Durban, explained that Ford money allows PNGO to have a global scope.

“We do lots of international advocacy conferences and regional forums,” Jarrar explained in an interview, “and we always try to represent our political view to Europe. We attended some women’s conferences [in Europe], plus Durban.”

“Our biggest donations come, of course, from Ford,” Jarrar added. “We have been in partnership with Ford for a long time — a real partnership, a real understanding of our needs.

“Of course, when we go to an international conference, we try to get extra funds from one of their special budgets,” Jarrar said. “Or sometimes the conferences’ organizers, if they have their own Ford Foundation funding, they send us the finances to attend.”

From 1999 to 2002, PNGO received a series of Ford grants totaling $1.4 million, plus a $270,000 supplement, according to an examination of the Ford Foundation’s IRS Form 990 filings, Web site databases and annual reports. PNGO continues to receive at least $350,000 annually from Ford, according to the data.

LAW and PNGO were hardly the only Ford-backed groups at Durban. The conference was a major enterprise for the Ford Foundation.

In a Ford Web site commentary written prior to Durban, Bradford Smith, Ford’s vice president for peace and social justice, wrote that the conference’s issues were “at the core of the Ford Foundation’s mission since its inception.”

More than a dozen activist organizations — from Brazil to Sri Lanka — received well over $1 million in Ford grants specifically earmarked for the production of advertising materials, public meetings and advocacy at the Durban conference.

“Does all this mobilizing, networking and drafting of statements have real impact on people’s lives?” Smith asked in the statement. His answer: Yes, “because for years to come they [Ford grantees] and the foundation will work together to implement the [Durban] Conference Plan of Action.”

Since the Durban conference, LAW has continued its public crusade against Israel and Zionism, and PNGO, as well as many of its 90 members, continue organizing efforts to try Israeli officials as war criminals, boycott the Jewish state and label Israel a racist, illegitimate state that must be stripped of its Jewish identity.

While a number of the Ford-financed organizations at Durban, such as LAW and PNGO, engaged in anti-Israel and anti-Zionist agitation, certainly many did not.

Either way, Ford Foundation money, as intended, was a prime mover in the production of the advocacy pamphlets, posters, workshops and other materials at the conference that shaped the overall atmosphere.

“I saw the Ford representative at Durban,” remembers Palkovitz, the Hadassah delegate, who spotted him in connection with African American reparations issues. “There was no way to miss the anti-Semitism. The Ford guy would have to be blind. It was the most anti-Semitic and anti-Zionist stuff you ever saw.

“I told the Ford representative I thought it was a mistake because the whole meeting was being hijacked,” she related. “He disagreed. He said he believed what the conference was doing was correct.”

“We are struck,” said David Harris, executive director of the American Jewish Committee, “by the scores of Palestinian NGOs funded by Ford, a number of which have deeply disturbing and troubling records on Israel and Jews.”

Part 2: How Aware Is the Ford Foundation of Way Its Funds Are Being Used?

The Ford Foundation disburses approximately $500 million annually through 13 offices worldwide, to grantees of all descriptions, in dozens of countries.

Each year, the foundation, with an estimated $10 billion in assets, makes some 2,500 awards spanning the realms of art, education, development and social justice.

In the process, Ford practices globalization just as a multinational commercial corporation would, deftly weaving monies in and out of its offices and recipients, in a complex web of funding.

But the Ford Foundation’s product is not commercial — it is philanthropic. A large portion of that annual philanthropic expenditure is devoted to what it terms “human rights and social justice” — that is, not to traditional relief and aid programs, but to advocacy, activism and agitation.

Ford carefully monitors all programs and materials enabled by its funds, maintains Alex Wilde, the foundation’s vice president for communications.

Various grantees also confirmed that Ford requires detailed submissions of printed items and Web site development plans, sometimes two or three times per year. Hence foundation officials remain keenly aware of the fruits of their philanthropy.

There is no easy way to identify how much money the scores of anti-Israel and Palestinian advocacy groups and non-governmental organizations, or NGOs, actually receive from Ford. This is because significant funds or program benefits are also channeled through other not-for-profit organizations and even overseas government agencies.

For example, the 2002 annual report of the Washington-based Advocacy Institute lists the Palestinian NGO Network, or PNGO, as a “partner.”

In February 2003, the Advocacy Institute brought a group of PNGO fellows to Washington in a Ford-funded program “to strengthen PNGO’s advocacy capacity.” The program involved “message development, coalition building, media,” as well as “access and persuasion of decision makers,” according to a statement that appeared in mid-August on the institute’s main Web page.

Ford records indicate that the foundation in 2000 granted the Advocacy Institute $180,000 “to strengthen the role of a network of Palestinian NGOs.” The money for PNGO is tallied among the foundation’s U.S. grants, not those of the Cairo office.

Just a year later, in August 2001, PNGO was one of the main groups pushing for anti-Israel resolutions at the U.N. World Conference Against Racism in Durban, South Africa.

To be sure, Ford has also granted several million dollars to American Jewish and Israeli peace groups. For example, Ford in the past has granted $500,000 to the American Reform Judaism movement’s Mideast peace program, known as “Seeking Peace, Pursuing Justice,” which seeks to mobilize North American Jewry for social justice in Israel.

Ford also funds several Israeli-based dissident and human rights groups that campaign for Palestinian justice. The list includes such Israeli Palestinian rights advocates as B’Tselem, Rabbis for Human Rights and Hamoked.

B’Tselem currently receives $250,000 for what Ford databases and reports describe as “monitoring human rights in the West Bank and Gaza Strip, documenting violations, and advocating for policy changes.”

Rabbis for Human Rights has been granted more than $250,000 for what Ford databases and reports describe as “rabbinically-based educational and organizing activities promoting human rights policies by Israel in the West Bank and the Gaza Strip.”

Rabbi Arik Ascherman, the group’s executive director, said the Ford money has been used to develop a Web site, place newspaper advertising and bring other rabbis to Israel to learn about human rights.

Last year, Hamoked was granted $300,000 for what Ford’s databases and reports describe, in one summary, as “advocacy and legal action to promote human rights of Palestinians in the Occupied Territories facing human rights violations by Israeli authorities.”

B’Tselem and Rabbis for Human Rights, while staunchly advocating for Palestinian human rights, have also vocally and publicly condemned the campaign of Palestinian suicide bombings and other terrorism aimed at Israeli civilians.

Ascherman spoke favorably of Ford, commenting, “Our experience with Ford has been very positive.”

He also said that, while “it would be wrong for a funder organization to have a heavy-handed thumb editing,” in general, grant makers should “ensure the funds are spent for the goals they support, and I would like to think the goals of the Ford Foundation do not include anti-Semitism.”

“We at Rabbis for Human Rights obviously abhor anti-Zionist organizations and anti-Semitism,” said Rabbi Brian Walt of the group’s North American branch.

The Ford Foundation also funds the Washington-based New Israel Fund for its activities supporting and promoting social change in Israel. Since 1988, the Ford Foundation has provided more than $5 million to the New Israel Fund, a coalition of Israelis, North Americans and Europeans seeking to promote human rights and justice issues in Israel.

Ford has just announced it would increase its funding to “peace and social justice groups” in Israel through the New Israel Fund with a $20 million five-year grant to be administered by a joint Ford-NIF enterprise.

Aaron Back, Ford’s former program officer for Israel, will oversee the new funding.

The money is designed to “increase our funding in Israel and help build the capacity of civic organizations vital to strengthening its democracy,” according to Ford’s president, Susan Berresford.

The move will shift future grant-making from Ford offices in New York to the New Israel Fund. It is not yet clear which groups will receive money from the donor-advised fund.

The overwhelming majority of Ford’s monies for the Middle East are granted to pro-Palestinian and Islamic rights groups.

The list extends for pages. For example, last year, the Al Mezan Center for Human Rights in Gaza received $100,000 for what Ford databases and reports describe as “community-based advocacy work on economic, social and cultural rights in Gaza.”

The Al Mezan Center works closely with the International Solidarity Movement, which stages civil disobedience actions to obstruct Israeli security forces operating in the territories. The center also operates a Web site, at www.mezan.org, that seeks to document alleged Israeli atrocities and violations of international law, and that also denounces Israel’s war against the Islamic fundamentalist group Hamas.

Al Mezan is one of the many Palestinian NGOs that refer to the Israeli Defense Forces as Israeli Occupation Forces. OPT is its abbreviation for “occupied Palestinian territories.”

Augmenting its Ford funding, Al Mezan also receives funding from the Swiss Agency for Development and Cooperation, the International Commission of Jurists in Sweden, the U.N. High Commissioner for Human Rights, and several other U.N. and European Community sources.

A second Palestinian agency, operating under the name Health, Development, Information and Policy Institute, received one $60,000 Ford grant under “Media Arts and Culture,” plus a second award for $75,000 under “Sexuality and Reproductive Health.” The institute operates an incitement Web site, www.palestinemonitor.org, dedicated to mobilizing world action against Israel and Zionism. Its main page offers recommended activism.

For example, a page on the site, as of mid-August, sub-headlined “How can you take action for the Palestinian cause?” offered two Palestinian links, one of which is: “Boycott Israeli Goods.” Clicking on that link leads to another site, www.boycottisrael.org, which includes a list of American companies to be boycotted for doing business in Israel, including Johnson & Johnson, Disney and Starbucks.

In mid-August, Palestine Monitor’s own “Activism” page offered enthusiastic coverage of a September 2002 attempt by pro-Palestinian protesters to enter Caterpillar’s Washington premises for the purpose of serving a so-called citizens-arrest warrant for “war crimes” related to selling bulldozers to Israel.

A third entity, the Jerusalem Media and Communication Centre, recently received three grants totaling $365,000 to create what Ford databases and reports describe as “media services for the foreign press and a weekly electronic magazine,” as well as “enhancement of media activities related to the crisis situation.”

The center publishes “The Palestine Report,” which can be found at www.palestinereport.org. This Web site employs dramatic imagery and testimony to portray Israel as an apartheid state guilty of war crimes, violations of international law and repeated massacres.

As of early October, one of the center’s main Web site features was a clickable section entitled “From Revolution to Revolution,” which “focuses on internal Palestinian politics, political strengths and cracks in the armor of unity.”

A prominent “Resources” list links to the Web sites of six Palestinian factions. Several of them are listed by the State Department as terrorist groups, including the People’s Front for the Liberation of Palestine, Islamic Jihad and Hamas, the Islamic Resistance Movement.

When the Jerusalem Media and Communications Centre was asked whether other organizations could be listed as well, an official explained, “We only link to the biggest and best organizations.”

A State Department spokesman for the Near East Affairs bureau who viewed “The Palestine Report” and its link pages to terrorist sites declared, “I am uncomfortable with the funding of this site and especially these links — very uncomfortable.”

Yehudit Barsky, director of the American Jewish Committee’s division on Middle East and international terrorism, added, “I think this demonstrates that we in the United States have not paid attention — foundations can be used in a way no one can imagine. Here we see a Web site promoting terrorist organizations. The Ford Foundation just did not care.”

During this investigation, Wilde, the Ford Foundation communications vice president, refused to answer any questions regarding PNGO, the Policy Institute, the Jerusalem Media and Communications Centre or any other aspect of the foundation’s involvement with Palestinian NGOs.

Nor would Thea Lurie, the foundation’s deputy media director, or media associate Joe Voeller.

But in a six-page written response to questions that the foundation released only after this investigation was completed, Wilde said: “We are a grant making organization. We support grantees for agreed-upon activities and do not dictate what they should say.”

The statement also said: “Our human rights work reflects a commitment to principles that go beyond partisanship and politics, to basic rights and protections that human beings possess by virtue simply of being born.”

During a visit to Ford’s headquarters in New York, foundation officials brushed off questions about anti-Israel agitation. Quipped one senior Ford official: “Anti-Zionism is in the eye of the beholder.”

Part 3: Transparency a Concern As $Millions Go to Mideast

With hundreds of millions of dollars being pumped into Palestinian non-governmental organizations by numerous private foundations here and in Europe, government and Jewish communal officials are raising significant questions about transparency.

How is the money being used? And do major Palestinian activist funders such as the Ford Foundation — which granted $35 million to Arab and pro-Palestinian organizations in 2000 and 2001 alone — exercise proper controls?

What’s more, federal agencies concerned with fighting terrorism are increasingly asking: When money goes into one NGO’s pocket, where does it wind up?

Earlier this year, Washington’s fears over the loosely controlled millions streaming into Palestinian organizations from foundations turned into action. The State Department and the U.S. Agency for International Development began applying President Bush’s Executive Order 13224 to American organizations working in Palestinian areas.

Executive Order 13224 recognizes “the pervasiveness and expansiveness of the financial foundation of foreign terrorists” and regulates financial transactions that may end up in the hands of those that either commit or even “advocate” terrorism.

In May and June of this year, USAID informed American tax-exempt charities it funds that if they partnered with any Palestinian NGOs, those NGOs would be required to sign a Certification Regarding Terrorist Financing. The certification pledges that no funds have made or will make their way into organizations to “advocate or support terrorist activities.”

The Palestine NGO Network, or PNGO, an umbrella group of 90 Palestinian organizations that is funded in part by the Ford Foundation, was outraged.

On July 12, PNGO published a statement declaring: “Some donor agencies in the West Bank and Gaza Strip are setting unacceptable conditions for providing financial support to Palestinian NGOs. Such conditions include a pledge titled ‘Certification Regarding Terrorist Financing’ stipulating that Palestinian NGOs pledge not to ‘provide material support or resources to any individual or entity that advocates, plans, sponsors, engages in, or has engaged in terrorist activity ‘ based on the U.S. Executive Order 13224.”

PNGO program coordinator Renad Qubaj complained in a telephone interview, “Who defines what is terror? All funds received by the NGOs should be unconditioned — no political conditions.”

Another Palestinian NGO railing against the terrorist certification was the Al Mezan Center for Human Rights, which has received three Ford Foundation grants totaling $350,000, according to foundation records.

In late August, Al Mezan’s director was quoted in the Arabic press as stating: “There is no legal basis for this document. This document should be boycotted, including the local authorities, political parties and universities. These institutions should reject this document completely, as it puts them in great danger. We should publicize a list of any institutions that agree to the conditions in the document.”

A spokesman for the State Department’s Near East Affairs bureau, Greg Sullivan, said he sharply disagreed with the Palestinian groups’ position.

“This should come as no surprise to the NGOs,” he said. “We want to see accountability and results. The money going into the Palestine area is a problem. That is why the Executive Order exists.”

He added: “We know terror acts when we see them, and we call them terrorism consistently.”

PNGO steering committee member Allam Jarrar said that although many of the umbrella group’s members depend upon USAID for funds, PNGO itself gets much of its money from Ford, and “Ford does not make us sign this agreement.”

He added, “For us, Ford is a very credible organization.”

Palestinian sources said they would pressure the American government to waive Executive Order 13224.

But Sullivan of the State Department insists the order is necessary and said, “I can’t see us budging on this requirement.”

Interestingly, at the same time the State Department started tightening control on NGO funding, it began shifting monies directly to the Palestinian Authority. In May, the U.S. government granted $50 million in aid to Palestinian areas, channeling the first $30 million through traditional Palestinian NGOs.

However, on July 12, the State Department suddenly announced the last $20 million of that original sum would be granted directly to the Palestinian Authority.

Asked if there was an “unspoken linkage” in shifting financial transactions away from NGOs to genuine government structures, a State Department spokesman asserted, “Not unspoken at all — but loudly spoken.”

“The bottom line,” the spokesman said, is that “we here in Washington — this department, as well as Treasury and the FBI — are deeply concerned about the fungibility of money to NGOs that can go in one door and out the back door, and then finance terrorist activities.”

“As for the latest $20 million,” the spokesman said, “it is strictly controlled.” He said the State Department is holding the Palestinian Authority and its finance minister “strictly accountable.”

The State Department spokesman added, “We want to be confident that our monies do not finance anti-Semitic Palestinian textbooks and other anti-Semitic materials.”

The spokesman indicated that the accounting firm of Deloitte & Touche had been engaged “to monitor those funds.”

Just as the State Department was tightening up policy on NGOs earlier this year, the IRS began demanding far greater accountability and transparency from American foundations engaged in Palestinian areas.

The Treasury Department recently published voluntary “Anti-Terrorist Financing Guidelines” to tighten the lax funding procedures employed by some foundations.

Among Treasury’s recommendations: Charities should “determine whether the foreign recipient organization is or has been implicated in any questionable activities.”

Adding to the pressure on foundations, the multinational Financial Action Task Force on Money Laundering has spotlighted “non-profit organizations [that] collect hundreds of billions of dollars annually from donors and distribute these monies” to a gamut of beneficiaries.

The Council of Foundations, a representative association of philanthropies, recoiled from the Treasury Department’s suggestion that it obtain Certification Regarding Terrorist Financing. In a June 20, 2003, letter to Treasury, Council President Dorothy Ridings, a former Ford trustee, challenged the guidelines as inappropriate and unnecessary.

A formal statement by Interaction, the largest American alliance of international humanitarian organizations, asked Treasury to withdraw the guidelines altogether. Interaction specified that West Bank grantees would regard certification requests as “unduly intrusive.”

Sources at Treasury indicate they want more than accountability; they want transparency — that is, the ability to review activity reports and monitoring, all of which are currently secret at organizations such as Ford.

“The days of opaque financial transactions are over,” a State Department official said when asked about the millions of foundation dollars pouring into Palestinian NGOs. “Yes, we would like to see transparency, accountability and internationally acceptable standards on all their monies.”

Lack of transparency is indeed the question facing the government and foundations engaged in Palestinian areas. At the Ford Foundation, other than a one-sentence description of a grant published in its annual reports, Web databases and IRS filings, mounds of documents relating to the original grant, activity reports, monitoring and audits are all held secret for 10 years after the grant concludes.

For example, in the case of LAW, the Palestinian Committee for the Protection of Human Rights and the Environment, those files would not become available for public inspection until 2015 — and even then only after a cumbersome academic-style review of any request.

LAW was instrumental in organizing the anti-Israel debacle at the September 2001 U.N. World Conference Against Racism in Durban.

When asked about its policy of keeping documents secret, Ford issued a statement, saying: “We protect grants and documents within the last 10 years to guard the confidentiality of ongoing relationships with grantees.”

Officials of Jewish organizations found that policy troubling.

“It is not only a sad comment on philanthropy running amok, but outrageous and irresponsible,” commented Abraham Foxman, national director of the Anti-Defamation League.

“The Ford Foundation, in its efforts to address evil, has — because of the lack of oversight and monitoring, and establishing serious criteria as to the recipient –wound up aiding and abetting extremists and political movements that border on anti-Semitism and anti-Americanism,” he said.

“It is incumbent on the trustees of the Ford Foundation to provide transparency about their funding, including the audits,” Foxman added.

Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations, called for a congressional investigation of Ford Foundation grants to Palestinian NGOs.

“At a time when government and society are demanding transparencies on the part of corporations and charities,” Hoenlein said, “it is hard to justify the apparent exemption of the Ford Foundation, which uses tax-free dollars to fund what is at best questionable organizations and causes — and at worst organizations undermining the interest of the United States and its allies.

“It is now incumbent on Congress and federal agencies to conduct their own examination,” he said.

Yehudit Barsky, director of the American Jewish Committee’s division on Middle East and international terrorism, said, “We need two kinds of accountability from Ford — not just where did the money go, but how was it spent.

“Ford owes the public not only a financial accounting, but also a moral accounting,” she said.

A written statement issued by Ford, in response to questions, asserted, “The Ford Foundation takes the threat of possible misuse of grant funds for terrorism very seriously. We share the concern of the U.S. government to minimize the risk that grant funds might be diverted for terrorist purposes. We comply fully with all legal requirements established by U.S. law and regulation.”

The statement added, “We have no reason to believe that Ford Foundation grant funds have been used to benefit terrorist organizations.”

This investigation has not identified any instances of Ford monies being linked to terrorism. However, despite more than two dozen attempts, in writing and by phone, over a several-week period, Ford officials responsible for external communications refused to answer any questions regarding specific Palestinian NGOs, or past or present investigations regarding the misuse of specific funds.

David Harris, executive director of AJCommittee, said it is “unfortunate” that Ford “is unwilling to go on the record, to explain or clarify its policy” regarding specific grantees.

With no product to sell, no stockholders, no customers, no need for outside fund-raising and no need to answer to the public, the financial independence of the Ford Foundation, estimated to be $10- billion strong, makes the organization impervious to the type of criticism it appears to expect for financing activism and agitation.

In a recent speech, the foundation’s president, Susan Berresford, acknowledged, “Addressing root causes [of injustice] often means making new kinds of arrangements in public policies, community and power relationships It is different from traditional charity — feeding the hungry, sheltering the homeless.”

“Social justice philanthropy requires risk-taking, experimentation, managerial oversight, patience, long-term commitment and a thick skin. Being a social justice philanthropist or activist isn’t always comfortable or easy,” she said.

The Ford Foundation has spent billions to fight for transparency in government and create a better world.

But Harris of AJCommittee makes this point: “Transparency begins at home.”

Part 4: A Ford Grantee Case Study

To find lax funding controls of Palestinian charities, one only need take a look at one of the Ford Foundation’s beneficiaries, the Palestinian Committee for the Protection of Human Rights and the Environment, also known as LAW. The group — whose acronym comes from the name of its predecessor activist organization, Land and Water — was a key organizer of the anti-Israel debacle at the September 2001 U.N. World Conference Against Racism in Durban, South Africa.

LAW received $9,628,942 during the five years ending Aug. 31, 2002, from a long list of philanthropic donors. Besides the Ford Foundation’s $1.1 million, LAW received direct grants from more than 30 European and American public entities.

These include $1.5 million from the Dutch charity Cordaid; $853,000 from the Grand Duchy of Luxembourg; more than $93,974 from the Swedish unit of Save the Children; and $33,000 from the Canadian Embassy, according to audits obtained for this investigation.

No Arab sources were listed in LAW’s five-year donor record.

Last fall, donors became concerned when LAW officials were unresponsive to spending inquiries, according to a newly installed senior LAW official. Soon it became clear to the donors that vast monies — more than $2 million — were unaccounted for, misappropriated or being secreted in bank accounts instead of being spent on programs.

A consortium of worried benefactors formed an evolving committee, made up mainly of Ford Foundation officials and Norwegian and Swiss donors, according to a source with the International Commission of Jurists in Sweden, one of the concerned donors.

The consortium wanted a major accounting firm to launch an immediate investigation and asked the Swedish relief agency SIDA to quickly commission an audit. SIDA enjoyed an ongoing contract with Ernst & Young, which accepted the assignment immediately.

Ernst & Young’s offices in Stockholm and the West Bank city of Ramallah then undertook the investigation, according to a SIDA spokeswoman.

Approximately 80 percent of the estimated $100,000 audit cost was to be reimbursed by Ford, in concert with several European charitable groups, she said.

SIDA’s spokeswoman explained her agency was not actually a LAW donor, but merely facilitated the audit as a convenience to Ford and other funders.

Ernst & Young headquarters in London refused to discuss any aspect of its audit or provide a copy of the investigative report, which was submitted to the donor consortium on March 25 of this year.

But a copy of the 60-page investigation, obtained from overseas sources, catalogs a stunning list of financial improprieties.

Nearly 40 percent of the $9.6 million donated was either ineligible, unsupported, misappropriated or never spent on programs, according to the investigative report.

And more than $2.3 million was “retained,” turning LAW into a sort of bank under the nominal control of its then-executive director, Khader Shkirat, and other senior officials, the report asserted.

Indeed, three interest-free loans were made to a moneychanger, Izz Shkirat, related to the executive director at the time, according to the report. Two of the three loans, $30,000 and $40,000, were repaid, the report stated.

But a May 1999 loan for $130,000 has yet to be repaid, according to the report.

More than $160,000 in expenses was paid on behalf of an entity called the Centre for Democratic Advancement, reportedly formed by Khader Shkirat, which then used the money to purchase a destroyed radio station, according to the audit.

Asked about media reports that LAW funds were embezzled, an American employee of Ernst & Young familiar with the audit replied, “It depends what dictionary you use. They were certainly misappropriated.”

Moreover, $490,000 from LAW became part of a series of transactions among other LAW board members and used to acquire a 56 percent ownership in Arab Phone Inc., according to the audit.

In addition, more than $75,000 was spent on first-class or business-class international airline tickets, and lavish hospitality, which added $109,000 to the impermissible expenses, according to the report.

Seven cars and trucks were purchased for personal use of several former board members, and several of the vehicles have remained with those former trustees, according to the report.

Ernst & Young also concluded that the unused money arose from “fictitious financial reporting” to donors as a result of “collusion” among LAW’s board, Khader Shkirat and local accountants.

In June of this year, CBS News interviewed Shkirat as attorney for Fatah leader Marwan Barghouti, who is being tried in Israel for terrorism.

The Ford Foundation recently granted Shkirat a $60,000 grant to conduct human rights research at Harvard and complete English courses at Boston University.

Shkirat could not be located for comment, and Ford officials refused all comment on the case.

While spotlighting LAW’s abuses, Ernst & Young also reported to donors that the foundations’ controls were so sloppy that “it cannot be ruled out that LAW was under the impression that it had the donor’s silent consent to use the funds in any way it saw fit.”

A key American Ernst & Young source familiar with the report denigrated the funding arrangements as “goulash.”

“Everything goes into the pot, everything goes out of the pot. No one knows what is what — not Ford, not any of them,” he explained.

A senior LAW executive added: “What do you expect? I know of one grant for $200,000 made from the European Commission with nothing more than a phone call.”

When reached, LAW’s new director, a Lebanese Canadian named Jihad Sarhan, apologized for LAW’s former management and said LAW would not engage in future agitation or name-calling, simply human rights advocacy.

Sarhan stated that he did not completely agree with the Ernst & Young report and was hoping to retain Price Waterhouse Coopers to conduct a follow-up audit. He added that the group appointed a new board, and in early August changed its name to Law Association for Human Rights.

LAW correspondence and submissions over recent months to Ford and other donors, obtained exclusively for this investigation, thanked international donors for continuing their financing and promised strict financial controls in the future.

As of this writing, Ford was still scheduled to continue its funding of LAW through 2005, according to LAW and Ford sources.

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This JTA investigative series reveals that funding for many of the groups that fueled anti-Israel activity at a UN conference on racism came from the Ford Foundation, one of America’s largest philanthropic institutions. [Part 1] [Part 2] [Part 3] [Part 4]. This series was expanded into Financing the Flames (Dialog Press, 2013).