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Washington Report on Middle East Affairs, September-October 2011, Pages 32-33, 73

Special Report

Selective FARA Enforcement: Pakistan's Alleged Agents Prosecuted, Israel's Ignored

By Grant F. Smith


On the surface the Justice Department's (DOJ) recent criminal complaint against associates of the nonprofit Kashmiri American Council (KAC) seems like a legitimate application of the 1938 Foreign Agents Registration Act. FARA requires individuals or organizations lobbying on behalf of a foreign principal to periodically disclose their activities and programs in a publicly accessible office. The KAC indictment appears to be a form of U.S. pressure on Pakistan over its performance in the so-called "war on terror."

As Confucius might say, however, it is "interesting" to compare the Justice Department's application of FARA to Israel's foreign agents—who have caused far more damage to the U.S. than Pakistan could ever even imagine. (See chart on facing page.)

KAC was founded in 1990 as a nonprofit, tax-exempt charitable organization chartered to raise awareness about Kashmir. India has claimed Kashmir as an "integral" part of India, while Pakistan and others have pressed for Kashmiri "self-determination." The FBI affidavit filed on July 18, 2011 charges Syed Ghulam Nabi Fai and Zaheer Ahmad with conspiring to act as "agents of a foreign principal without registering with the attorney general, and to falsify, conceal, and cover up material facts they had a duty to disclose by tricks, schemes and devices…"

The FBI used exhaustive phone and ISP intercepts along with confidential witnesses in its investigation. The criminal complaint details how Pakistan's Inter-Service Intelligence (ISI) allegedly laundered payments to KAC's administrators through "straw donors." KAC allegedly "propagandized" on behalf of the government of Pakistan "with the goal of uniting Kashmir," according to one confidential witness in the criminal complaint. Another claimed the ISI had been "handling" Fai for at least 25 years. When interviewed by the FBI in 2007, Fai claimed not to know of any ISI presence in the U.S. Allegations in the Indian press that Fai was a Pakistani agent drove DOJ to advise Fai of his possible obligation to register under FARA in the fall of 2010. Fai refused, claiming "KAC or I have never engaged in any activities or provided any services to any foreign entity. And KAC or I have never had written or oral agreements with Pakistan or any other foreign entity. Thereafter, this report categorically denies any connection to any foreign agent including Pakistan."

Israel's long history of costly challenges to American sovereignty has only been possible through the systematized, ongoing subversion of FARA.

The indictment presents compelling FBI analysis of cash flows, intercepted phone and e-mail communications, and contributions to Congress to prove that KAC was indeed lobbying—albeit with a minuscule budget—on Kashmir. Application of the 1938 Foreign Agents Registration Act appears to have stopped the KAC, which had little success in mustering the lobbying potential of the estimated 700,000 Pakistani Americans or concerned Muslim groups in America. The U.S., which India chides for having "no clear position" on Kashmir, does not appear to have ever tilted in Pakistan's direction over the issue.

But despite the appearance of robust enforcement, as Paul Pillar recently noted in The National Interest, FARA has never been successfully applied to a far larger and more insidious foreign interest. Pillar charges that Israel's U.S. lobby has used "institutional subterfuges and the sheer clout of the lobby itself to escape prosecution under FARA." Indeed, Israel's long history of costly challenges to American sovereignty through unregulated front groups has only been possible through the systematized, ongoing subversion of FARA.

When David Ben-Gurion visited the United States as director of the Jewish Agency in the 1940s, he convinced U.S. donors and activists to incorporate an archipelago of front companies to violate the Arms Export Control Act and other laws. The Jewish Agency, a parastatal nonprofit organization, originally was formed to promote Jewish settlement of Palestine. Through Foundry Associates, Service Airways, Materials for Palestine and other Jewish Agency front companies flowed purchased and stolen surplus WWII explosives, munitions and arms vital for Jewish fighters in Palestine to wage war and eventually displace the native Arab population. According to political fund-raiser Abraham Feinberg's newly released FBI file, when federal law enforcement finally got close to prosecuting key members, Israel's government deployed Feinberg with explicit orders to pressure top U.S. government officials to quash law enforcement proceedings.

It worked. Although a few small-time Jewish Agency smugglers (such as the recently deceased Adolph "Al" Schwimmer) were eventually prosecuted, hundreds more identified by the FBI were never charged. Financiers caught writing Jewish Agency checks to fund major arms export violations, such as the highly connected New York lawyer Nahum Bernstein (whose FBI file was just released this June) went unpunished. In 1952 Feinberg successfully avoided his own FARA order by quickly shutting down a front company called "Israel Speaks" after briefly considering selling it to the Jerusalem Post.

Emboldened by these early successes, the Jewish Agency funneled in millions more dollars to institutionalize U.S. support for Israel by building up a permanent lobbying infrastructure. In the late 1950s it unleashed lavishly funded PR campaigns through multiple front organizations directed to subvert U.S. proposals for the repatriation of some Palestinians as part of a peace settlement. Jewish Agency funding promoted "experts" in the establishment news media deployed to deny that Israel was engaged in building an atomic arsenal even as Feinberg secretly raised money for Israel's Dimona nuclear weapons facility under order of Prime Minister Ben-Gurion. By the early 1960s, as Israel's arms smuggling network began to move nuclear technologies and highly enriched uranium, Congress began to buckle under a massive lobbying effort directed by the Jewish Agency's primary foreign agent, the American Zionist Council (AZC).

The AZC's wholesale diversion of overseas Jewish relief funds was aimed at shifting the burden of supporting Israel from donors onto U.S. taxpayers. A non-Zionist Jewish group, the American Council for Judaism, complained to the DOJ. The Justice Department finally uncovered the AZC as the primary "conduit" of Jewish Agency funding to sympathetic scholars, nascent Israel lobby think tanks, and even The New York Times. The AZC was finally ordered by the Justice Department to register as a foreign agent.

The AZC quickly fired back, hiring a former federal judge and close confidant of President John F. Kennedy. Judge Simon Rifkin argued that, while FARA was indeed a necessary law, it was intended to be applied to Soviet Communists and Nazi infiltrators rather than Israel. After years of intense behind-the-scenes battles, the DOJ finally allowed the AZC to file a non-public FARA registration "summary" statement that failed to disclose most of its egregious activities. The AZC's public relations and lobbying director, Isaiah Kenen, was the beneficiary of tens of thousands of dollars in funds earmarked to him from the Jewish Agency in Jerusalem. Just six weeks after the AZC FARA order, Kenen quietly incorporated the AZC's lobbying division as an entirely separate entity (the American Israel Public Affairs Committee, or AIPAC).

Reviewing the FBI's account of the KAC's careful structuring of ISI funding designed to make it appear to be grassroots U.S. support produces a sense of déjà vu. National Archives and Records Administration files opened in 2010 of a Senate investigation into Israel lobbying conducted by Sen. J.William Fulbright reveal that the vast extent of Jewish Agency FARA violations never made it into the published Senate record. While both the KAC and AZC carefully reported their U.S. accomplishments to their foreign principals, the Jewish Agency also "structured" funding, passing tens of thousands of dollars through the Rabinowitz Foundation to support a friendly think tank. A Jewish Agency representative told Victor Rabinowitz they represented the Israeli government, and that moving funds was a favor to Israel. Rabinowitz later recanted his testimony after coming under heavy Jewish Agency pressure.

We now finally know that Fulbright launched his Senate investigation of the Jewish Agency and AZC because of Senate concerns about the 1954 Israeli false flag terror attack on United States facilities in Egypt, known as the Lavon Affair (see July 1992 Washington Report on Middle East Affairs, p. 41). This key 1962 Senate memo (declassified in 2010) chartered the investigation worrying that, "In recent years there has been an increasing number of incidents involving attempts by foreign governments, or their agents, to influence the conduct of American foreign policy by techniques outside normal diplomatic channels….there have been occasions when representatives of other governments have been privately accused of engaging in covert activities within the United States and elsewhere, for the purpose of influencing United States Policy (the Lavon Affair)." But Fulbright, the Justice Department and the non-Zionist American Council for Judaism all failed in their effort to get Israel's foreign agents to properly register under FARA. Unlike the KAC, FBI files of the AZC investigation were never summarized and distilled into indictments. Worse, in 2011 the FBI has reaffirmed its commitment never to publicly release a single page of its own lengthy AZC investigation files under the Freedom of Information Act. Fifty years later, they still are apparently too hot to handle.

As Pillar accurately laments in The National Interest, "Sometimes the issue has arisen whether AIPAC itself ought to register under the FARA, but each time the lobby's own political power—greater now than in Senator Fulbright's time—has been sufficient to stifle any moves in that direction. An objective inquiry into this subject such as Fulbright initiated would be unthinkable on Capitol Hill today."

Today, the AZC is still with us, as reconstituted into AIPAC—which, along with other parastatal Israeli foreign agents, are beginning to ramp up a new campaign to provoke the United States into attacking Israel's current arch-nemesis, Iran. Meanwhile, the DOJ is sailing the wrong seas, using its FARA harpoon to hunt guppies rather than far more dangerous quarry.

Fortunately, there is growing public awareness that FARA has been undermined and misused. In May 2011 the Justice Department nervously witnessed the first ever public protest outside its headquarters in Washington. As captioned by USA Today, the citizen objective was as pointed, direct and as substantiated by evidence as DOJ's own recent charges against the KAC: "to re-regulate AIPAC under the 1938 Foreign Agents Registration Act."

Grant F. Smith is director of the Washington, DC-based Institute for Research: Middle Eastern Policy. Declassified files referred to in this article (including the Fulbright memo) may be browsed at the Israel Lobby Archive, <>.