EXCLUSIVE — Hamas and other Palestinian terrorist groups “exploit” little-known “loopholes” to fundraise and gain major footing in the United States financial system due to a lack of Treasury Department laws, a watchdog group alleged in a memo to Congress this week.
The eight-page memo was authored by Zachor Legal Institute, an organization that “combats the detrimental financial impact and discriminatory effects of antisemitic activity,” and forwarded Monday evening to senior Republican majority staffers on the House Foreign Affairs and Ways and Means committees, according to a copy obtained by the Washington Examiner. It comes as concern grows among lawmakers over pro-Palestinian activist hubs across the country sharing ties with terrorist factions while, in some cases, enjoying tax-exempt status through the IRS.
Marc Greendorfer, the watchdog’s president, laid out his case for why the Treasury Department’s Office of Foreign Assets Control should strengthen its Specially Designated Nationals and Blocked Persons List, which counts people and entities, such as terrorists or drug traffickers, that are barred from gaining access to U.S. assets. While Greendorfer said SDN has mostly “been extremely effective,” he argued Hamas, Hezbollah, Popular Front for the Liberation of Palestine, and other U.S.-designated terrorist groups “are able to evade OFAC’s sanctions program by creating or enlisting third-party front organizations that purport to be charitable or humanitarian groups but are, in fact, support organs of terror organizations.”
The Foreign Affairs Committee confirmed receipt of the memo, as did the Ways and Means panel.
In mid-October, the Treasury Department imposed sanctions on 10 Hamas officials, as well as “financial facilitators” in the Middle East, including Hamas commander Ayman Nofal, who was already killed by Israel’s military by the time the U.S. added him to SDN. Sen. Ted Cruz (R-TX) introduced a bill in late October seeking to sanction all members of Hamas, which launched its unprecedented attack against Israel on Oct. 7. Since that time, over 1,400 Israelis and 33 Americans have been killed, according to officials for both countries. Hamas alleges over 10,000 are dead in Gaza, though national security experts and the U.S. government scrutinize the data as unreliable.
The watchdog’s memo mentioned Holy Land Foundation, a defunct charity shuttered by the U.S. government in 2001 due to Hamas support and later sanctioned, and Alliance for Global Justice, another charity in Arizona that is still active.
In early 2023, Greendorfer’s group accused AFGJ, which was revealed through a Washington Examiner investigation of sharing anti-Israel terrorism ties, in an IRS complaint of providing material support to terrorism. This is because AFGJ fiscally sponsors the Samidoun Palestinian Prisoner Solidarity Network, an Israeli-designated terrorist organization that has shared staffers with the PFLP.
“For example, while Hamas is an SDN and thus can’t directly raise funds in the United States, all it has to do, and all it has done, is either create successors to the Holy Land Foundation or infiltrate and take control of existing charities to continue fundraising,” Greendorfer wrote in the memo. “In fact, the new charity doesn’t even need to go through the process of applying for tax-exempt status; rather, an existing tax-exempt organization can ‘fiscally sponsor’ the new charity and provide the new charity’s donors with the tax-exempt benefits donors crave.”
Greendorfer pointed out that fiscal sponsorship allows projects to avoid financial scrutiny, given they are not required to file tax forms with the IRS. Through fiscal sponsorship, registered charities often provide services, such as donation processing, human resources, and legal oversight, to grassroots projects housed under them, according to the National Council of Nonprofits.
The lawyer is calling on the IRS to review this charitable arrangement and require greater reporting of assets for “transparency” purposes. He’s also requesting the Treasury Department investigate Hamas “aliases” to sanction any entities found to be operating as guises for terrorism.
Rep. Darrell Issa (R-CA), who sits on the Foreign Affairs panel, said the “financial superstructure that fundraises and finances for global terror — in this country and all over the world — is becoming more clear than ever.” In late September, the congressman demanded the FBI and Treasury Department investigate the Democratic fundraising platform ActBlue over it previously letting the Palestinian Campaign for the Academic and Cultural Boycott of Israel, a group sponsored by AFGJ, have an account.
“The Congress can’t turn away because the truth is too important,” Issa told the Washington Examiner.
The Treasury Department did not return a request for comment.
Original Washington Examiner story: https://www.washingtonexaminer.com/news/house/palestinian-terrorist-groups-loopholes-memo-congress-hamas-israel.