[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
        THREATS TO ISRAEL: TERRORIST FUNDING AND TRADE BOYCOTTS

=======================================================================

                                HEARING

                               BEFORE THE

         SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION, AND TRADE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 5, 2014

                               __________

                           Serial No. 113-128

                               __________

        Printed for the use of the Committee on Foreign Affairs


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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
TED POE, Texas                       GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina          KAREN BASS, California
ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
PAUL COOK, California                JUAN VARGAS, California
GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III, 
SCOTT PERRY, Pennsylvania                Massachusetts
STEVE STOCKMAN, Texas                AMI BERA, California
RON DeSANTIS, Florida       ALAN S. LOWENTHAL, California
TREY RADEL, Florida--resigned 1/27/  GRACE MENG, New York
    14 deg.                          LOIS FRANKEL, Florida
DOUG COLLINS, Georgia                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida
LUKE MESSER, Indiana

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

         Subcommittee on Terrorism, Nonproliferation, and Trade

                        TED POE, Texas, Chairman
JOE WILSON, South Carolina           BRAD SHERMAN, California
ADAM KINZINGER, Illinois             ALAN S. LOWENTHAL, California
MO BROOKS, Alabama                   JOAQUIN CASTRO, Texas
TOM COTTON, Arkansas                 JUAN VARGAS, California
PAUL COOK, California                BRADLEY S. SCHNEIDER, Illinois
SCOTT PERRY, Pennsylvania            JOSEPH P. KENNEDY III, 
TED S. YOHO, Florida                     Massachusetts


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Edwin Black, author..........................................     7
David Pollock, Ph.D., Kaufman fellow, The Washington Institute 
  for Near East Policy...........................................    39
Mr. Steven Perles, founder and senior partner, Perles Law Firm, 
  P.C............................................................    46

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. Edwin Black: Prepared statement..............................     9
David Pollock, Ph.D.: Prepared statement.........................    41
Mr. Steven Perles: Prepared statement............................    48

                                APPENDIX

Hearing notice...................................................    82
Hearing minutes..................................................    83


        THREATS TO ISRAEL: TERRORIST FUNDING AND TRADE BOYCOTTS

                              ----------                              


                        WEDNESDAY, MARCH 5, 2014

                     House of Representatives,    

        Subcommittee on Terrorism, Nonproliferation, and Trade,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 10 o'clock a.m., 
in room 2172 Rayburn House Office Building, Hon. Ted Poe 
(chairman of the subcommittee) presiding.
    Mr. Poe. This subcommittee will come to order. Without 
objection, all members will have 5 days to submit statements, 
questions, extraneous materials for the record subject to the 
length limitation in the rules.
    Israel is our great friend and ally. For over 50 years, the 
United States and Israeli leaders have been close friends. Our 
common values of democracy and liberty unite us, among other 
things.
    This administration sometimes forgets this. Be it the 
Iranian nuclear program or pressuring Israel over peace talks 
with the Palestinians, our recent policies have damaged our 
relationship.
    I was in Israel not too long ago when I met with Prime 
Minister Netanyahu when Secretary Kerry came down with the 
deal, the bad deal, as Prime Minister Netanyahu referred to. We 
let Iran walk all over us. At the end of the day, we weakened 
sanctions in exchange for allowing Iran to continue to develop 
nuclear weapons.
    In my opinion, the United States gave away the farm and the 
mineral rights in this bad deal. The threats against our good 
friend Israel are growing. The point of this hearing is to 
examine three issues.
    First, the issue of European countries boycotting Israeli 
businesses that are in the settlement areas. Make no mistake, 
this is a political move, not an economic move.
    Some European countries don't like Israeli settlements so 
they are trying to shut them down by not buying any goods from 
Israel. European Union is Israel's number-one trading partner 
to the tune of about a third in total trade.
    If EU countries turn the heat on boycotts it could have 
dire consequences for the Israeli economy. In January, a $200-
billion Dutch pension firm divested from five top Israeli 
banks.
    In January, Germany announced that it would not renew 
research grants to Israeli companies that do business over the 
Green Line.
    I fear this is an intentional move to pressure the Israelis 
to give ground, literally give ground, in peace talks with the 
Palestinians. But boycotting goods is the wrong way to get 
peace. All issues, including the settlement issue, need to be 
solved at the negotiating table with the Palestinians.
    These boycotts will only strengthen the Palestinian hand 
and make them less likely to agree to peace. The peace talks, 
in my opinion, are useless unless the Palestinians agree at the 
outset and say publicly and believe it that Israel has a right 
to exist as a nation.
    The second issue on this hearing is the Palestinian 
Authority giving bags of money to convicted terrorists in 
Israeli prisons. Right now, there are over 4,500 Palestinian 
prisoners in Israeli jails, most of them serving time for 
terrorism-related crimes.
    Many of these terrorists receive a salary directly from the 
Palestinian Authority. Monthly salaries range from $500 to 
$3,500. The more serious the crime, the more dead Israelis or 
Americans, the more money the Palestinians in jail receive.
    In Palestine, being a terrorist is one of the best paying 
jobs. According to some estimates, the Palestinian Authority 
spends $4 million to $7 million per month on this program, 
which is about 6 percent of the budget.
    One terrorist, Husni Najjar, explained to Israeli police 
after his capture that he planned a terror attack in order to 
be captured so he could receive money from the Palestinian 
Authority. Now, isn't that lucky?
    Here is the real problem. The United States gave $440 
million in Fiscal Year 2013 to the Palestinian Authority. We 
all know that money is fungible. The more money we give to help 
them with these ``job'' programs, the more money the 
Palestinian Authority has to pay terrorists.
    U.S. taxpayer money should not be paying and rewarding 
Palestinian terrorists for doing harm and killing Israelis and 
Americans. I am also, finally, concerned about the lack of 
justice for American victims in terrorist attacks that occur in 
Israel.
    At least 54 Americans have been killed by Palestinian 
terror attacks since 1993. Another 83 have been seriously 
wounded. Some perpetrators of these attacks have never been 
brought to justice. Some have served limited sentences and then 
they were released.
    The FBI could be doing more to track down these killers and 
bring them to the United States to stand trial. I think the 
United States Government owes that to the victims of these 
deadly attacks.
    Victims of these attacks are also seeking justice through 
the U.S. courts. The defendants are the Palestinian Authority 
and numerous foreign banks who are accused of funneling money 
to Palestinian terrorists.
    In one case, which we will hear more about today, a 
Jordanian bank is accused of laundering $90 million to Hamas 
through over 200,000 separate transactions. That is a lot of 
money and it buys a lot of terror.
    I look forward to hearing from our witnesses and what they 
have to say today. I now move to our ranking member, Mr. 
Sherman, from California for his remarks.
    Mr. Sherman. First, as to the Iranian deal, it is, clearly, 
imperfect.
    But we should remember that from 1998 until 2010 three 
administrations failed to enforce the sanctions laws we did 
pass and, more importantly, used all their power to go over a 
decade without us passing any additional significant sanctions.
    When we woke up in October of last year, we were in an 
incredibly weak bargaining position, strengthened only a bit by 
the sanctions adopted in 2010.
    So it is hard to say that the deal reached in Geneva is the 
problem. The problem is that for over a decade we did nothing 
and it is hard to win a football game--you can yell at the 
coach as to what play he calls in the fourth quarter. If you 
don't put a team on the field the first three quarters, you are 
not going to find a great play for the fourth quarter.
    Now, as to these hearings, the effort to boycott and 
delegitimize Israel is anti-Semitism, plain and simple. When 
the world's only Jewish state is held to standards no other 
state is held to and then is subjected to punishments no other 
state is subjected to, the motivation becomes clear.
    If the worst human rights abuse in the world is building an 
apartment building in the wrong place, so any mistake--
decisions made by my own city council may fit into that 
category--we in this room have heard such incredible human 
rights abuses that those who think that the only nation worthy 
of sanctions is one that builds apartment buildings in the 
wrong place is very--it is anti-Semitism, plain and simple.
    In addition, there are those who focus on a particular 
instance and say that a particular Israeli sergeant shouldn't 
have fired his gun but should have waited longer for the 
potentially hostile person to approach even closer, even while 
yelling, ``Stop.''
    Well, none of us are in that position. Who knows how much 
we would risk our lives in order to determine whether the 
person approaching and ignoring our demands to stop was a 
civilian or a terrorist.
    But the fault of any incident and hundreds like that take 
place every year is not the sergeant who does or does not risk 
his life to this or that degree.
    The fault are those politicians who seek unreasonable aims 
through violent means. War is not the fault of those who fight 
it. It is the fault of those who wage it.
    As to the particular efforts by some to halt economic 
activity on the West Bank by boycotting products grown or made 
there, this is more than absurd.
    You are going to strangle companies that provide jobs to 
Palestinians, then put on films about how the Palestinians 
don't have jobs and then demand that the U.S. taxpayer give a 
lot of money to the PA authority so they can employ people 
without jobs and then, as the chairman points out, have the PA 
authority give that money to terrorists.
    I think the term is chutzpah. It is simply absurd for those 
who claim to be concerned about the Palestinians to oppose 
investment that creates Palestinian jobs and the only bad thing 
about the location of SodaStream is that they are not located 
in my district, the only place I would rather see jobs or one 
of the places I would rather see jobs than anywhere in the 
Middle East.
    Finally, as to aid to terrorists, our efforts should begin 
at home. There are those who provided--U.S. citizens who are 
part of the flotilla that provided aid to Hamas, those folks 
were violating U.S. terrorist law.
    We did nothing. Then there is Viva Palestina, which is on 
tape--we will show you the YouTube--giving assets to Hamas and 
soliciting tax deductible contributions from American 
taxpayers.
    Finally, after considerable prodding, the IRS has begun the 
effort and it is not yet effective to make sure that a 
particular organization doesn't advertise that you give money 
to them and they will funnel the money to Viva Palestina which 
will fund the money to Hamas and give you a tax deduction for 
it.
    We have got to stop terrorist financing. It starts here. I 
yield back.
    Mr. Poe. I thank the ranking member for his wise comments.
    The Chair will recognize other members who want to be heard 
for 1 minute. The Chair recognizes the other gentleman from 
California, Mr. Rohrabacher, for 1 minute.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman.
    I recently--well, it was recently I've been in Israel, it 
seems to be someplace that all Members of Congress have to go 
and I did speak to both sides.
    I spoke to people in the Palestinian Authority as well as 
the Israeli Government and I have come to the conclusion that 
there is only one thing holding up peace right now--a peace 
agreement between Israel and the Palestinian people--and that 
is that the Palestinian people will not forcefully and 
forthrightly announce that they do not have a right to return 
to the pre-1967 borders of Israel.
    And, of course, Israel won't agree to that because we are 
talking about millions of people's right to inundate that 
country, which would mean that country wouldn't exist anymore 
as the country that it is.
    And just like we, for example, couldn't sign a treaty with 
Mexico saying that anybody who can trace their family roots 
back to the Southwest has a right to emigrate into the United 
States and then we would have 50 million to 75 million new 
American citizens, all of whom are Mexican.
    Now, I would hope that with all the other issues that we 
are talking about that we put that in perspective. I think the 
other issues, the settlements, all these other things are 
solvable.
    But until the Palestinians step forward and make that 
agreement, Israel will exist. It will exist and we don't have a 
right to inundate it with millions of other people, there won't 
be peace and there won't be agreements, and I would certainly 
like the opinion of our panelists today as to whether or not my 
perception of the real stumbling block is really what it is all 
about.
    So thank you very much, Mr. Chairman, for holding the 
hearing so that we can enlighten ourselves and get some good 
information to see maybe we can bring peace if we understand 
exactly what the problem is. Thank you.
    Mr. Poe. I thank the gentleman.
    The Chair will also recognize another member from 
California, Mr. Vargas.
    Mr. Vargas. Thank you very much, your Honor. I appreciate 
it, and I thank you very much again, Mr. Sherman, for bringing 
this issue forward so we can discuss it today.
    I would associate myself with the comments that you made as 
well as our ranking member and I would say this, that Israel is 
our closest and faithful ally and we should act accordingly.
    One of the things that is disturbing is to see some of 
these European nations acting, as I would say the same as the 
ranking member, in a very anti-Semitic way. You see all the 
human rights abuses around the world and it is interesting, you 
only pick on Israel.
    Interestingly too I was in Israel recently and virtually 
every Israeli that you talk to wants peace and in fact some of 
the things that the government has been willing to do--release 
murderers and terrorists--just to talk--just to talk about 
peace, trying to get to a settlement.
    And you go to the Palestinian areas as we did and they only 
speak hate and how much they hate the Jews and how much they, 
you know, blame everybody else except for themselves for the 
situation they are in.
    So, again, I thank you very much for bringing this forward 
and I hope that we can act as a faithful ally as Israel has to 
us in a very difficult part of the world.
    Thank you, Mr. Chair.
    Mr. Poe. I thank the gentleman.
    The Chair will now recognize the gentleman from 
Pennsylvania, Mr. Perry.
    Mr. Perry. Thank you, Mr. Chairman.
    It is an important hearing. You know, we tend to think of 
the fight against terrorism as a burden that falls mainly on 
the shoulders of government or military, diplomatic, homeland 
security and law enforcement agencies.
    Yet, there is one area where private citizens can play a 
leading role and that is in stopping the flow of funds to 
terror organizations.
    Beginning in the 1990s, Western countries and especially 
the United States passed laws making it possible for victims of 
terror to sue the regimes that sponsor terror, banks that 
transfer funds to terror groups, front organizations that 
pretend to serve charitable causes, and even the terrorists 
themselves.
    It is with this in mind that I would like to show some 
appreciation for the work of the Perles Law Firm and also the 
Israel Law Center who work together with Western intelligence 
agencies and volunteer lawyers around the world to file legal 
actions on behalf of the victims of terror.
    With that, I really look forward to your testimony here 
today. Thank you, Mr. Chairman. I yield back.
    Mr. Poe. The Chair will recognize the gentleman from 
Massachusetts, Mr. Kennedy, for 1 minute.
    Mr. Kennedy. Thank you, Mr. Chairman.
    I want to thank the ranking member as well for calling this 
important hearing and the witnesses today for making themselves 
available.
    I very much look forward to your testimony and what you 
could do to educate this subcommittee on the threats that an 
extremely important friend and ally to the United States and 
the state of Israel is facing.
    And not just Israel but, really, the--from my vantage 
point, as a pillar of democracy and stability in the Middle 
East what their reach of those that wish to do those forces of 
democracy and stability harm.
    I, along with Mr. Vargas, had a chance to visit Israel a 
couple of months ago and I was just recently in Asia with Mr. 
Sherman as well, as we explored some of the threats and the 
complexities confronting some of these forces literally around 
the world.
    And so I want to thank the chairman for calling this 
hearing and look forward to your testimony today.
    Mr. Poe. I thank the gentleman.
    The Chair will now recognize Mr. Lowenthal, also from 
California, for 1 minute.
    Mr. Lowenthal. Thank you, Mr. Chair and Ranking Member 
Sherman. I want to thank you for putting this hearing together 
in order for our committee to examine some of the strategic 
issues of interest to the United States and to the U.S.-Israel 
partnership and Israel's relation with the European Union and 
some of the critical issues around that.
    I just want to say, while I proudly consider myself pro-
Israel, which I am, and certainly anti-terrorist and I am very 
glad for this hearing, I also believe as we listen and we 
understand that we take an unbiased and objective point of view 
that if we are ever going to have peace between the Israelis 
and the Palestinians that we also hear and try to understand as 
much as possible the Palestinian point of view.
    We may not always agree with it but we have to hear it and 
understand it and I think that is very important as we move 
forward. Thank you.
    Mr. Poe. I thank the gentleman.
    Without objection, all of the witnesses' prepared 
statements will be made a part of the record. I ask that after 
I introduce each witness that they keep their presentation to 
no more than 5 minutes and I will introduce each witness now 
and then give them time for their statements.
    Mr. Edwin Black is an award-winning New York Times best-
selling author with more than 1 million copies in print. His 
work focuses on genocide and hate, corporate criminality, 
corruption and historical investigation.
    Mr. Black has been interviewed on hundreds of network 
broadcasts from the ``Today Show,'' CNN and NBC as well as 
leading networks in Europe and in Latin America.
    Dr. David Pollock is the Kaufman fellow at the Washington 
Institute where he focuses on the political dynamics of the 
Middle East.
    He previously served as senior advisor for the Broader 
Middle East at the State Department and in several other 
advisory positions there, including 4 years as regional expert 
on the Secretary of State's policy planning staff.
    Previously, he was also chief of Near East, South Asia, 
Africa Research at the U.S. Information Agency.
    Mr. Steven Perles is the senior attorney and founder of the 
Perles Law Firm. He has litigated matters before the Supreme 
Court, courts of appeal, and district courts throughout the 
country.
    His litigation practice's focus is primarily on cases 
involving the immunity of foreign sovereigns and has included 
several groundbreaking cases against foreign states for their 
complicity in acts of international terrorism.
    Notable recent decisions include a successful turnover 
action against a $1.9 billion Iranian Central Bank funds in 
which money had been laundered into the United States.
    I thank all three of you for being here. We will start with 
Mr. Black.

              STATEMENT OF MR. EDWIN BLACK, AUTHOR

    Mr. Black. I thank this committee for inviting me. I am 
Edwin Black and before I testify before any Parliament I always 
say I come not as a Republican or a Democrat, a conservative or 
a liberal. I am here for my information.
    I did hear the remarks of Chairman Poe and Member Sherman 
and I found them to be factually accurate and historically 
incisive.
    So I am here to talk about the Palestinian terrorists' 
salaries, which I broke in my book on November 1st of last year 
in canon. My book is ``Financing the Flames'' and it is an 
inescapable reality that American taxpayers are directly 
funding individual named terrorists for individual named 
terrorist acts, just as Chairman Poe said. Here is how it 
works.
    An individual in the Palestinian Authority can go from 
being a nobody to a somebody, from rags to riches, just by 
committing an act of terrorism, perhaps blowing up a bus or 
invading a home and slicing the throats of children.
    At that point, he will go on an immediate official 
Palestinian Authority salary. The more people you kill, the 
higher is your salary. It can range, as you said, from a few 
hundred dollars a month for maybe a 5-year sentence and it 
actually can go up to $10,000 a month for a 25-year sentence.
    The actual law itself which governs this is published in my 
book on Page 184 and this is the actual law and you can see the 
sliding scale. This money also includes a rank in the 
government. You become a manager, a director, a supervisor.
    You can even become an Assistant Deputy Minister and so you 
have a civil rank as well. This money constitutes about $5 
million to $7 million a month of PA resources.
    It is prioritized, which means if they only have a million 
bucks in the bank and there is no food or they are lacking 
medicines and they need to pay these salaries, they pay the 
salaries first.
    The money goes directly to the prisoner by means of a POA--
that is a power of attorney--and he can then turn it over to 
his girlfriend, to his mother, to his family, to his soccer 
club, to al Fatah, whatever it is. It does amount to 
approximately 6 percent of the PA budget.
    If there is any lack of alacrity in prioritizing these 
funds, there is an NGO called the Prisoners Club that makes 
public agitation to make sure that these moneys are paid. If 
you add in the additional emoluments--wedding benefits, 
scholarships, soccer teams, special celebrations--it comes to 
16 percent of the Palestinian Authority budget.
    All of this money comes from donor countries such as the 
United States, and in the United States it is strictly against 
the law. The individual that Chairman Poe identified, Husni 
Najjar, who deliberately committed--initiated a terrorist plot 
was seeking money for wedding expenses.
    So while Americans are choosing between food and fuel, 
Palestinians have an understanding that there is a bottomless 
pit of salaries for terrorists.
    Now, there is never going to be peace in the Middle East 
between the parties because the chief export is confrontation, 
terrorism. This is a--this is a business. It is kind of like 
asking the Saudis to stop drilling for oil. This is what they 
do.
    And the idea that this is not known is incorrect. It is 
true that I broke this in my book here but everybody in this 
room knows about this. Everybody in the Palestinian Authority 
knows about this. The entire Western media knows about this.
    The State Department has always known about this. The 
Foreign Office, the foreign ministries overseas have always 
known about this. The only one who has not been informed about 
this are the members in this institution and the constituents 
who vote the money.
    Now, I have only got 6 seconds left so I won't go on. But 
if you also wish to ask me any questions about this, the 
international law, SodaStream or any of the--or who is 
financing among our taxpayers BDS, I will be happy to answer 
those questions too.
    And thank you very much for having me.
    [The prepared statement of Mr. Black follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
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    Mr. Poe. Thank you, Mr. Black. You got a lot in in 5 
minutes.
    Dr. Pollock.

    STATEMENT OF DAVID POLLOCK, PH.D., KAUFMAN FELLOW, THE 
           WASHINGTON INSTITUTE FOR NEAR EAST POLICY

    Mr. Pollock. Thank you very much, Mr. Chairman, honorable 
members, for inviting me to testify to you today. It is an 
honor for me to be here and I think important to discuss the 
timely and important topic of European attempts to boycott 
Israel.
    Prime Minister Netanyahu spoke just yesterday at AIPAC at 
length about the BDS movement and I would like to begin with 
some facts and figures.
    The boycott threat against Israel right now is much more 
potential than real. Israel's economy continues to thrive, 
estimated to be growing in the range of 3 percent annually, in 
large part because of its continuing ability to export and to 
attract foreign investment.
    This includes trade and investment to and from the European 
Union, which remains Israel's single largest trading partner, 
with the U.S. close behind.
    Just to put this Israeli economy in global and U.S. 
perspective, it is worth noting that despite its relatively 
small size the health of Israel's economy is also in our own 
economic interest.
    The high-tech partnerships between Israel and the United 
States are well known. But it may surprise you to hear that 
over the last decade Israel has been a larger market for U.S. 
exports than oil-rich Saudi Arabia.
    Or that at times during this past decade Israel was one of 
the top 20 foreign direct investors in the American economy or 
that Israeli companies, products and licensed technologies are 
directly responsible for tens of thousands of decent jobs for 
American workers right here at home.
    As for current European policies, it is important to note 
that no European government supports any type of boycott 
against Israel today. When it comes to Israeli settlements or 
economic or other institutions beyond Israel's 1967 de facto 
borders, however, official European practice diverges.
    For example, the Horizon 2020 agreement between the EU and 
Israel signed late last year predicates that the EU will not 
fund research or related activities in Israeli settlements, and 
at the level of EU governments the EU has advised its members 
that they may require, and several of the major European 
countries do require, special labels for Israeli products 
manufactured in the settlements across the 1967 de facto 
borders.
    At the level of the private sector or quasi government 
economic entities, some European institutions have announced 
divestment or selective boycotts of Israel and some of those 
were mentioned by some of you in your remarks just a few 
minutes ago.
    But on closer examination, most of these moves turn out to 
be either restatements of previous positions or very minor in 
economic impact. Moreover, these steps have been offset by 
other more positive new decisions by European governments and 
by European companies.
    A few weeks ago, I had the privilege of testifying about 
this issue in Europe to the Senate Foreign Relations and 
National Defense Committee of the French Parliament and I would 
like very briefly to mention a few points that came up in that 
discussion.
    First of all, I noted that the Palestinian President 
himself, Mahmoud Abbas, when asked recently about boycotts 
against Israel, said publicly in Arabic that the PA opposes 
boycotts against Israel.
    Unfortunately, however, as is the case with many issues, 
other official Palestinian spokesmen have refuted that very 
statement. For example, Hanan Ashrawi, recently in an op-ed in 
an Israeli newspaper, wrote that boycotts against Israel are, 
as she put it, ``the Palestinian nonviolent resistance.''
    But when I told the French Senate that President Abbas of 
Palestine opposes boycotts against Israel and I asked him why 
then do you in Europe in some cases support boycotts against 
Israel, they had no good answer.
    I believe that this is the kind of approach that the United 
States can also take, raising this issue very publicly as you 
are doing today, considering whether there might be legislative 
or other legal remedies against boycotts against Israel, as we 
do, for example, in refusing to allow American companies to 
enforce the Arab boycott against Israel. These are measures 
that could very well we considered and that could nip this 
problem in the bud.
    Thank you again for the opportunity to address you and I 
look forward to your questions and discussion.
    [The prepared statement of Mr. Pollock follows:]

    
    
    
    
    
    
    
    
    
    
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    Mr. Poe. Thank you, Dr. Pollock.
    Mr. Perles.

  STATEMENT OF MR. STEVEN PERLES, FOUNDER AND SENIOR PARTNER, 
                     PERLES LAW FIRM, P.C.

    Mr. Perles. Thank you, Mr. Chairman, Mr. Sherman. You know, 
before I begin my comments this morning, I will say that I do 
think senior members of the Bar have an obligation to help 
launch the careers of younger generation of lawyers.
    It is why I teach, and in that spirit I would like to 
introduce Ms. Kristin Stitchers to the committee. Ms. Stitchers 
is my clerk and she is a law student at the George Mason 
University in northern Virginia. Thank you.
    We have been studying the material support of terrorist 
attacks around the globe, particularly Palestinian terrorist 
attacks that result in the death or personal injury of United 
States nationals since 1995.
    And I would break that material support into two tiers 
because it has been our observation over the last almost 20 
years that there really are two tiers of Palestinian 
terrorists.
    At the--you have an upper level, terrorists like Hassan 
Salameh whose activities killed Matthew Eisenfeld and Sara 
Duker. Matthew was from Connecticut. Sara was from New Jersey.
    Now, Hassan Salameh was recruited by Iran in Gaza. He was 
smuggled through Egypt into the Sudan, flown on an Iranian 
military aircraft to Iran. He was trained in Iran and then he 
was returned through the Sudan and Egypt back into Gaza.
    One of the more perplexing things about that attack is when 
we looked at the forensics of the bomb, the energetic was a 
plastic explosive that had been made in the United States for 
which there is only one customer and that is the United States 
Department of Defense.
    And, candidly, I could not figure out how a plastic 
explosive made for the Defense Department wound up in a Hamas 
terrorist's gym bag.
    As it turned out, Hassan Salameh was trained--and we 
learned a great deal about his training curriculum in Iran--he 
was trained by the Iranians not only to recruit suicide bombers 
but to recruit suicide land mine defusers and he was taught how 
to defuse U.S.-manufactured land mines.
    In fact, we determined that the land mine--that what had 
happened was when Hassan Salameh was coming back through Egypt 
he recruited suicide land mine defusers, went into mine fields 
that the Egyptian Government had set up under the provisions of 
the Camp David Peace Accords--and, of course, mine fields are 
not guarded, they are simply posted--and they went in until 
they were able to salvage an American-made mine that was 
designed to destroy a Soviet T-54 tank, and I believe Hassan--I 
believe that energetic killed two U.S. nationals and 25 or 27 
Israelis inside a bus.
    The terrorist, and that is the suicide bomber, essentially 
was vaporized by the energetic inside of the bus. The lower-
level terrorists are people like the suicide bomber on the bus. 
Those are the kinds of people that are getting martyr support.
    Now, we have what I consider to be probably the most 
important case in the country right now on martyr payments and 
that is what is referred to as Litle versus the Arab Bank or 
the Arab Bank series of cases.
    Abigail Litle was the daughter of a professional 
administrator in the Baptist Church. He was posted in Haifa. He 
took his daughter--he took his family with him to Israel. She 
did what all 13-, 14-year-old girls do.
    She made friends with all the 13-, 14-year-old girls in her 
neighborhood. They all got on a bus together one morning to go 
to school. They all died together on that bus. That terrorist 
receives martyr payments that were--and this currency is not 
Iranian.
    This currency is Saudi, and it was funneled through the 
Arab Bank's branch in Brooklyn, New York, which is why we 
brought the action in New York. The Eisenfeld and Duker action 
was brought under the Foreign Sovereign Immunities Act against 
Iran.
    That was successfully prosecuted. This action was brought 
under the Anti-Terror Act because the Arab Bank of Jordan is a 
private actor. The remedy against private actors is under the 
ATA rather than the Foreign Sovereign Immunities Act.
    I am running out of time but I will say and I would 
emphasize that to the best of our knowledge this is private 
Saudi money. There is no Saudi Government involvement in that 
activity.
    In my written statement, which has been filed for the 
record, we do describe the fact that we are at something of a 
critical juncture in that case now.
    We are getting a great deal of push back from the 
Department of State. That case is scheduled to go to trial in 
August. We hope to keep it on schedule and we hope the 
committee will assist us in doing that.
    Thank you.
    [The prepared statement of Mr. Perles follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
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    Mr. Poe. I want to thank all three of you for your superb 
testimony.
    I will now recognize myself for some questions. Mr. Black, 
I want you to be a little more specific, and I know that is 
hard for you to do because you were very blunt and candid and 
specific.
    Is U.S. money going to pay prisoners in Israeli jails that 
we would consider terrorists?
    Mr. Black. The answer is yes. It is illegal. Our 
Government, at the highest level, knows it is illegal. Every 
hour of every day that this money continues to go to the PA you 
risk the chance that another bus of more Americans will be 
blown up, and they will receive an official salary from the PA.
    The PA is continually in debt and it relies upon donor 
countries for this money. Now, when you ask the PA are you 
going to stop using our money to pay these terrorists' 
salaries, they have a term for this and the term is called 
donor filth.
    It is all over the media. It is all over the newspapers. It 
is in public remarks, and approximately 40 percent of the 
entire PA budget comes from donor countries and much of the 
rest comes from remittances.
    There is no question that this country is supporting 
terrorism. Not because somebody is publishing a Web site but 
because somebody committed a specific act of terrorism and was 
paid on a sliding scale for the number of people that he 
killed. You are doing this now.
    Mr. Poe. I am going to ask some more questions. Try to be a 
little shorter, if you can. Briefer, I guess, is the answer--a 
little more specific. You know, I was a former judge and so I 
sent--I mean, people went to prison because they should have 
gone.
    But the idea that we pay people to go to prison and the 
more serious the crime against society they get more money, 
that is ludicrous. It would be ludicrous in this country but 
now we are paying people overseas.
    The prisoners that are in these Palestinian jails, have 
they committed crimes against American citizens that are 
directly or indirectly receiving money from American taxpayers?
    Mr. Black. Short answer, absolutely yes.
    Mr. Poe. How many people are in Israeli jails?
    Mr. Black. Under this law, which only covers to terrorists 
and does not cover shoplifters or burglars or any other types 
of prisoners that are not national security offenses, it is 
about 4,000. You said about 4,500.
    That would cover everybody. It is about 4,000 and none of 
them think they are going to serve the sentence that they are 
given--5, 10, 20 years--because they all believe they are going 
to get out in the next prisoner swap or the next prisoner swap 
to discuss the next prisoner swap.
    Mr. Poe. All right. There was a prisoner swap in October 
where 1,000 or so got out of Israeli jails. How many of those 
were terrorists?
    Mr. Black. They were all terrorists and----
    Mr. Poe. Okay. Thank you. Are any of those--are any of 
those people that are in Israeli jails--you know, terrorist 
means different things to different folks. But are they members 
of foreign terrorist organizations like Hamas?
    Mr. Black. Many are not. Many are individual Palestinians 
who have been impoverished by their own lack of enterprise in 
the Palestinian Authority and see American and EU tax money as 
a way to become wealthy in their own land, and they are just 
individualized and incentivized by taxpayer money.
    Mr. Poe. Dr. Pollock, Mr. Black testified earlier that some 
of these prisoners are getting up to $10,000 a month. So what 
is--you know, as we now understand, these are killers who 
killed somebody.
    The more serious the crime, the more you get from the 
Palestinian Authority. So what does a Palestinian that is not a 
criminal making out there a month in--somewhere in Israel? Just 
the average salary--monthly salary. Are they getting $10,000 a 
month?
    Mr. Pollock. No, sir.
    Mr. Poe. What are they making? Do you know?
    Mr. Pollock. The per capita income in the West Bank is--
which is under Palestinian Authority rule, is estimated right 
now to be approximately $4,000.
    Mr. Poe. A month?
    Mr. Pollock. No.
    Mr. Poe. A year?
    Mr. Pollock. A year, yes.
    Mr. Poe. So you get $4,000 a year per----
    Mr. Pollock. Per capita income. Right. Right.
    Mr. Poe. Per capita.
    Mr. Pollock. So, clearly, this----
    Mr. Poe. Crime pays. Pays very well. The more serious you 
commit the crime against Israelis, Americans, Western 
Europeans, whoever, the more they are paid.
    Mr. Pollock. Yes, sir.
    Mr. Poe. And they can give this--understand, Mr. Black, 
they control--the prisoner controls where the money goes. They 
can give it back to a terrorist organization. They can give it 
to their mother-in-law, their girlfriend.
    Mr. Black. That is right. It is the POA and the POA changes 
anytime they want it to change, and when I was in the British 
Parliament a couple of weeks ago I--one of the parliamentarians 
said this is welfare to the families. It is not welfare to the 
families. It can go to anyone the guy designates, including his 
own terror cell.
    Mr. Poe. Two quick questions. Explain what the Prisoners 
Club is and explain what happens when these terrorists who are 
getting money to go to prison to kill people get out. What 
happens when they get out? Quickly, briefly.
    Mr. Black. When they get out they get a pension and the 
pension--this is money for life. So while we don't have any 
money here to pay our own pensions they are getting the pension 
and the Prisoners Club----
    Mr. Poe. Because they went to prison as a terrorist act 
they are getting a pension.
    Mr. Black. That is right.
    Mr. Poe. Because they are part of the government now.
    Mr. Black. And the Prisoners Club advocates to make sure 
they get more money, more benefits, more bonuses, more 
prioritization and job training.
    Mr. Poe. Thank you.
    I will yield to the ranking member from California, Mr. 
Sherman.
    Mr. Sherman. Thank you.
    Dr. Pollock, thank you for your focus on the economic 
vibrancy in Israel, and the judge and I have a bill to make 
Israel a visa waiver country.
    If that bill succeeds, we will see a lot more investment in 
the United States because business people can't wait 3 or 4 
weeks to go make a business decision. I have never seen a deal 
that was worth doing that would wait 3 weeks.
    And it would also be the answer to those who try to make 
Israelis feel like pariahs we ought to put out the welcome mat 
in the most important country in the world.
    You have described enterprises on the West Bank. Do these 
provide jobs for Palestinians?
    Mr. Pollock. Yes, sir. They do. Most of Israel's economic 
activity on the West Bank including settlement construction 
provides jobs for Palestinians.
    It is actually mostly Palestinian workers who are 
physically building the new housing that the Israelis are 
constructing in some of these settlements and being paid decent 
salaries for that work.
    Mr. Sherman. And the most recent controversies involved 
Oxfam, an organization funded in part by the work of this 
committee, criticizing one of its board members for being a 
spokesperson for SodaStream.
    Doesn't SodaStream--great soda, I might add--aren't most of 
the employees Arab Palestinians?
    Mr. Pollock. Yes, sir. Most of them are. It is a mix of 
employees. You have Palestinians and Israelis working together 
in the SodaStream manufacturing facility in the West Bank.
    I might just add parenthetically that Prime Minister 
Netanyahu, in his speech to AIPAC yesterday, specifically 
referred to this issue and had what I guess you would call 
colloquially a shout out to Scarlett Johansson and ended his 
speech by saying, ``Frankly, my dear Scarlett, I do give a 
damn.''
    Mr. Sherman. Mr. Black, among those getting these payments 
from the PA for their terrorism, are there those who have 
killed or injured American citizens?
    Mr. Black. Yes. There are scores of American citizens who 
have been killed or injured and many of the Palestinians who 
are receiving these American-funded salaries are perpetrators 
of those acts.
    Mr. Sherman. I want to comment on some of the comments made 
by my fellow Californians. I was with President Clinton when we 
saw the PA charter changed and supposedly that was the 
recognition of the Palestinians that Israel had a right to 
exist.
    They then retreated through an artifice to well, Israel has 
a right to exist but only as a second Palestinian state, by 
declaring that any Arab person who claims that any member of 
their extended family ever lived in Israel, and just this is a 
claim because there are no records from the Ottoman Empire.
    It is not like you carried around a little ID from 1898. So 
any Arabic-speaking person who makes that claim has a right to 
go and live in Israel with their entire extended family. So we 
saw that position.
    Now, my colleague from southern California also points out 
we have got to listen to the Palestinians and their leaders. He 
is absolutely right. I have done a lot of that over the last 18 
years.
    Privately, they know that Israel--that peace is--with 
Israel as a homeland for the Jewish people, that the right of 
return unless it is symbolic and of no practical importance has 
to be swept away if there is peace.
    The problem is they enjoy the political advantages of 
fanning the flames loudly and then quietly tell Members of 
Congress they know they have got to go in the other direction.
    The problem is that they have boxed themselves in. I am 
going to astound my colleagues and yield back with 24 seconds.
    Mr. Poe. I thank the ranking member.
    Before I yield to the other--one gentleman from California 
I want to put in the record that while the EU boycotts Israel, 
Iran is shipping arms to terrorists in Gaza. Earlier today, the 
Israeli navy raided a ship in the Red Sea and seized dozens of 
advanced rockets from Iran for the Palestinian terrorists in 
Gaza.
    These rockets had a range that could hit anywhere in 
Israel. So we can't forget about the Iranians in all of this.
    I will yield 5 minutes to the gentleman from California, 
the ranking member of Europe, Eurasia and Emerging Threats--Mr. 
Rohrabacher.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman.
    I guess what I am getting out of this is that the old 
expression ``follow the money'' is very applicable here, and I 
thank you, Mr. Chairman, and I thank the panelists today for 
shining some light on where the money is coming from and 
surprise, surprise, it is coming from us.
    I mean, holy cow. So, I mean, one would think that you 
follow the money you are going to end up in, you know, some 
Damascus or Tehran and instead it is right here in Washington, 
DC, and right here in some of the money that we are allocating.
    That needs to be corrected and thank you for pointing that 
out to us. Over the years, I have been in many hearings like 
this where we discuss terrorism and we discuss attacks, and 
terrorism is an attack on a civilian and the Palestinians in 
this case have targeted civilians in order to terrorize a 
population to achieve an objective.
    And I--it seems to me that we have been listening to the 
Palestinians and before, 20 years ago when I first came here it 
seemed to me that Israel wasn't listening. It seemed to me that 
Israel did not have a plan of how to deal with the Palestinians 
and they weren't willing to.
    They thought they should just disappear, become part of 
some other country. Well, since that time I think Israel has 
made tremendous concessions to the Palestinians.
    They have given them territory and land and a sample 
government that they could have once a full agreement is 
reached and they have also recognized that the Palestinians 
will have a right to a country as well.
    And it seems to me we have seen lots of concessions from 
the Israelis but I--as time has gone on, I haven't seen the 
concessions from the Palestinians.
    And as I say, I think all the Israelis that I have talked 
to and all the Palestinians I have talked to have led me to 
conclude that the only thing the Israelis really are looking 
for is an actual guarantee that the Palestinians believe they 
have a right to exist as a country.
    One of these things that separated us, as I say, is the 
right of return that the Palestinians keep claiming, which is 
really a right to eliminate Israel as a country because it 
would inundate what is Israel with a foreign population.
    Is there a possibility that we could change this to a right 
of compensation? Because the Palestinian argument is that in 
1948 so much land was confiscated from Palestinians and these 
people have not been compensated for that land, thus they own 
it and thus they should have a right to return.
    I will get to my point and that is should we, number one, 
accept right of compensation as something that perhaps could be 
an alternative to the right of return, and number two, where 
would you get that money and just--I want to throw this out to 
the panel as well--when people talk about compensating people 
for those--that property that they lost--the Palestinians lost, 
at the same time, in the 1940s Jews left lots of land behind 
and lots of property behind in countries--Middle East 
countries.
    Whether it was Egypt or whether it was Syria or whether it 
was Iraq or whether it was Iran, there were many Jews that were 
forced out of their homes and property and I don't believe they 
were ever compensated either.
    Perhaps we could tell the governments that now have that 
valuable property that the Jews left in 1948 that that property 
should be used as a means of compensating the Palestinians for 
the property that they lost. What do you think about that idea?
    Mr. Black. Well, I wrote a book about that called ``The 
Farhud'' about that very point. Approximately 790,000 Jews were 
expelled from Arab countries. Shortly after the state of Israel 
began they were made stateless. All of their property had been 
seized.
    They had dwelled in peace in the Middle East for 1,000 
years before Mohammed. They were sent to expulsion camps. The 
earrings were pulled from their lobes.
    The bracelets were yanked from their wrists and they were 
forced into Israel by these Arab countries to create a 
demographic time bomb. There was a small airline that was 
invented----
    Mr. Rohrabacher. To get right to the point is that was a 
lot of valuable property.
    Mr. Black. That was millions.
    Mr. Rohrabacher. And so that valuable property, just a 
thought, Mr. Chairman, that----
    Mr. Black. And it was registered, by the way.
    Mr. Rohrabacher. That could be--that might be able to be 
used as a source of money by those countries to compensate the 
Palestinians for the property they lost when Israel became a 
country. Just a thought.
    Thank you very much, Mr. Chairman.
    Mr. Poe. Thank you, Mr. Rohrabacher.
    I do want to correct something for the record. I called you 
the ranking member of your subcommittee, much to the delight of 
my friends to the left. But you are the chairman and you will 
stay the chairman, I suspect, a long time.
    But anyway, I now recognize the gentleman from California, 
Mr. Vargas, for 5 minutes.
    Mr. Vargas. Thank you very much, your Honor. I do call you 
your Honor because I know you were a judge, too.
    Mr. Poe. And you need to call me that.
    Mr. Vargas. Yes, sir, and I always do.
    First of all, I have to say it almost seems impossible to 
believe that our Government is indirectly funding terrorists in 
prisons in Israel and--I mean, we certainly have the witnesses 
here testifying.
    I think we need to bring the--some representative from the 
government forward, Mr. Chairman, at some point to either 
refute it or to say that is the case because this is outrageous 
if it is the case.
    Again, I had not heard about it previously. It hasn't been 
reported on any of the news stations that I watch. But it is 
outrageous and not a penny should go, of course, to any 
terrorist and we need to get to the bottom of this. That is why 
I thank you for bringing this forward.
    I do want to ask some questions. The question was asked of 
us and we could ask you by yourselves about BDS--boycott, 
divest and sanctions--where the money is coming from. So I 
would ask you where is this money coming from.
    It seems, unfortunately, that they are picking up some 
steam throughout the world and it is very unfortunate because I 
don't see it anything less than just anti-Semitism--a little 
bit shielded but not much.
    Could you tell us where the money is coming from for this 
movement? Dr. Pollock, you look like you are able to answer 
that.
    Mr. Pollock. Thank you. Thank you for the question.
    You mean money to fund the BDS movement?
    Mr. Vargas. Yes. Yes, sir.
    Mr. Pollock. Yes. Well, I think not enough--at least to my 
knowledge, not enough solid research has been done on exactly 
that question so far and my--so I am going to give you my 
judgement and impression.
    And that is that the money comes from a variety of sources 
all over the world and there are some governments including, 
for example, the South African Government that is----
    Mr. Vargas. Not our Government, though. Please tell me it 
is not our Government at least.
    Mr. Pollock. Not to my knowledge.
    Mr. Vargas. Okay. Good.
    Mr. Pollock. That are active in funding chapters that are--
of different organizations that are engaged in promoting 
boycotts against Israel.
    There are some academic institutions and societies, student 
organizations, for example, on various universities including 
some here in the United States, that are very active in 
promoting this.
    I think their funding comes from a variety of individual 
donations and foundations. I am not personally aware of any 
government money that supports it.
    Mr. Vargas. Okay. Mr. Black, I saw that you were anxious to 
answer the question. Do you know, sir?
    Mr. Black. Yes. The number-one source of BDS funding is 
taxpayers. Here is how it works. 501(c)(3) organizations--you 
all remember the investigation I did on the Ford Foundation in 
which they were funding all these anti-Semitic groups--
501(c)(3) groups raise money and donate it to organizations 
involved in the BDS.
    For each million dollars of tax exempt money, American 
taxpayers have to pony up $440,000. The number-one organization 
which has been associated with this process has been the New 
Israel Fund which gave hundreds of thousands of dollars to the 
Coalition of Women for Peace so that they could create a global 
infrastructure of boycotts including a database called Who 
Profits.
    They stopped giving this money in 2011 but now they 
continue to give hundreds of thousands of dollars to 
organizations like Breaking the Silence, Adalah and Bisallam, 
which are absolutely essential to keep the BDS alive. New 
Israel Fund.
    Mr. Vargas. Thank you.
    Mr. Perles, do you have an answer to that, too?
    Mr. Perles. I do not, sir.
    Mr. Vargas. Okay. I think that that is something that we 
need to act on also then. I see this movement. Of course, it 
has become somewhat worldwide now and it seems to have a lot of 
money and it seems that someone is orchestrating.
    Again, it is nothing less than veiled anti-Semitism. I 
guess my last question would be, you know, how do we then--how 
do we move forward then to make sure that these groups don't 
get the money--that our Government is not involved or 
implicated?
    What would you do, Dr. Pollock? What would your solution 
be?
    Mr. Pollock. Thank you, again, for the question.
    I think there could be, as my fellow witness just noted, 
there could be an opportunity to investigate the tax exempt 
status of organizations that might be knowingly or unknowingly 
funding activities that are either illegal or improper or not 
eligible for tax exempt status because they are political 
advocacy.
    That is one possibility. But I do think that the most 
significant way of addressing this issue is by raising public 
awareness about it and I don't think that this is a lost cause 
even in Europe, if I may say so with all due respect, to any 
Europeans who might be here.
    I do think that there are organizations in Europe who are 
certainly advocating BDS but there are also organizations, very 
good ones, in Europe that are actively opposing it and fighting 
against it and they deserve----
    Mr. Vargas. My time has expired so I am going to thank you.
    Mr. Pollock. Thank you.
    Mr. Vargas. Thank you, Mr. Chairman.
    Mr. Poe. I thank the gentleman.
    The Chair will recognize the gentleman from Pennsylvania, 
Mr. Perry, for 5 minutes.
    Mr. Perry. Thank you, Mr. Chairman, and thank you, 
gentlemen.
    So this policy, this official policy, how long--how long 
has this been in force? Mr. Black, anybody?
    Mr. Black. Are you talking about the Law of the Prisoner?
    Mr. Perry. Yes.
    Mr. Black. The Law of the Prisoner goes back years. It was 
an unofficial policy before it was regularized into Palestinian 
law. The actual law itself was--and its qualifications were 
read to me over the phone by the Minister of the Ministry of 
Prisoners.
    They have an entire ministry devoted to this. So it is 
years. And may I also say that while----
    Mr. Perry. Ten years or more?
    Mr. Black. Or at least 10 to----
    Mr. Perry. Okay. So it is nothing new, and to be clear, 
just to make sure I understand this, there is no direct State 
Department money that we can tell going to the--going to this 
program or is----
    Mr. Black. I didn't say that.
    Mr. Perry. Okay. You suggest----
    Mr. Black. I believe the money is going directly. Of course 
it is. It is fungible. You can't give money to an al-Qaeda soup 
kitchen and then say oh, and but this soup kitchen money is not 
going to go to feed the troops.
    Mr. Perry. So if I can just give you a scenario and you can 
validate it for me. So State Department funds some USAID 
project in the--in the area and then that money is 
misappropriated and--at least portions of, and then put toward 
this project?
    Mr. Black. The money goes into the PA. The PA doesn't have 
its own currency. We are now investigating the routes by and 
the foreign accounts that the PA uses and then the PA divvies 
up the money and they borrow from various accounts including 
the army account, the military account, the police account 
and----
    Mr. Perry. Okay. So does the--does the State Department 
just wholesale give an appropriation to the PA?
    Mr. Black. In some cases, yes.
    Mr. Perry. What is the level of funding, do you know? Do 
you have any idea what kind of money?
    Mr. Black. Well, I know what it is in England and hear a 
number of $440 million. I am not sure if it is block grants or 
if it is targeted money. But all of this money goes into one 
pot, fungible. It comes from the--a Latin word that means 
mushroom.
    Mr. Perry. Is there no--is there no accounting on the--on 
State Department's side for exactly how each dime is spent?
    Mr. Black. They don't want to account for it.
    Mr. Perry. Okay. So who would be--is there--is there a 
person at State? Is there an agency--is there a person at State 
that we can turn to, bring in here and have a discussion with 
that would be responsible for the accounting?
    Mr. Black. He is currently in Europe.
    Mr. Perry. Who is that person?
    Mr. Black. Secretary Kerry.
    Mr. Perry. Thank you.
    So there has been a law on the books, in my understanding, 
since 1990 regarding victims of terrorism that has been where 
the United States could extradite these individuals that have 
perpetrated the alleged crime.
    To your knowledge, how many--how many folks since that 
time--I think there have been, according to what I am reading 
54 U.S. citizens killed in Palestine terror attacks.
    How many of those perpetrators that are alive--not, 
obviously, the ones that have blown themselves up, you can't do 
much with them--but the ones that have lived through their 
attacks have been extradited back to the United States for 
prosecution?
    Mr. Black. That is a legitimate question. I am going to 
pass it to this gentleman here.
    Mr. Perles. Mr. Perry, first, let me thank you for the 
compliment in your opening remarks. It is very much 
appreciated. I think you need to divide the world of 
Palestinian terrorist attacks into two different categories.
    If you are talking about Palestinian terrorist attacks that 
occur outside of Israel such as aircraft hijackers--for 
example, we represented three U.S. nationals who were shot in 
the head execution style and tossed out of an aircraft in 
Malta--the surviving Palestinian terrorist in that attack 
served 6 years in Malta and then was freed without notice to 
the United States.
    The U.S.--the FBI chased that man to the end of the earth, 
dragged him back out of Africa. He was prosecuted here in the 
U.S. District Court for the District of Columbia and is 
currently serving a life sentence.
    We do a very good job--the Justice Department, we as a 
nation, the Justice Department does a very good job for attacks 
that occur outside of Israel. With respect to attacks that 
occur inside of Israel, to the best of my knowledge no one has 
ever----
    Mr. Perry. Why is that?
    Mr. Perles. I think that is a--that is a----
    Mr. Perry. What is--what is your opinion?
    Mr. Perles. My opinion?
    Mr. Perry. Yes. This is what you do. This is what you 
study, correct?
    Mr. Perles. This is what I do. We have had a lot of 
discussions with the Department of Justice over the years. One 
of my clients, Steve Flatow, who lost a daughter, Lisa, in a 
terrorist attack remains quite active in this area.
    I think it is the view of the Department of State that were 
the United States to prosecute a Palestinian terrorist for acts 
of terror committed in Israel that it would somehow interfere 
with the ability of the Department of State to stand as a 
neutral or the onus----
    Mr. Perry. So my time has expired. I appreciate your 
answer.
    Mr. Chairman, just let me--does that--does that policy cut 
across the political grain in the United States, both 
Republican and Democrat administrations, or is there a 
difference? With your indulgence, Mr. Chairman.
    Mr. Perles. No, no. There is no difference.
    Mr. Perry. Okay. Thank you. I appreciate your input.
    Mr. Poe. The Chair recognizes the gentleman from 
California, Mr. Lowenthal, for 5 minutes.
    Mr. Lowenthal. Thank you. I want to follow up with the same 
line of questioning the first, I think, Congressman Vargas 
raised and then Congressman Perry about. It is so shocking for 
us to hear about how U.S. funds are directly or indirectly 
supporting salaries for convicted terrorists.
    I think our assumption has always been that much of those 
funds really are--you know, we promote through USAID toward 
local economic growth or the well being and creation of 
stability which will lead--economic stability which will lead 
toward political stability.
    So the question I am raising is if these funds, as Mr. 
Black has--are co-mingled, they are then--whatever funds go in 
to this big pot and then out of that pot, what are you 
suggesting that we do right now?
    Mr. Black. Okay. Peace is possible in the Middle East. Some 
35,000 Palestinians a day make a 1-hour to 2-hour ride to work 
in equality in Israeli jobs.
    But peace doesn't have a chance when you are paying people 
to commit murder. What I would do if I were you, and I am not--
I have no standing here.
    Mr. Lowenthal. Absolutely, but we are just asking what you 
would do.
    Mr. Black. I would immediately by sunset stop all money to 
the PA until this one program, this one law, is rescinded, then 
claw back all of these moneys that have been paid over the 
years to kill innocent civilians, and then resume the process 
along the lines that Kerry and others have suggested, which is 
pay for peaceful coexistence and do not pay for murder. This 
House must stop paying for murderers. Stop it today.
    Mr. Lowenthal. Thank you.
    Dr. Pollock, do you have any response to that? How are we--
where do we go from here?
    Mr. Pollock. I do agree that this PA policy is abhorrent 
and that the United States should play no part, if we are, in 
supporting it.
    At the same time, I think that the peace process as it is 
currently underway, as I understand it from press reports 
because many of the details are--have not been released 
officially--as I understand it, the peace process that is 
currently underway is indeed addressing many of these issues 
about coexistence, about settlements, about refugees both 
Jewish and Arab, about compensation for past losses, about all 
of the other issues that are standing in the way of peace.
    And so I think it is important whatever we do--in my own 
personal view, whatever we do about terrorist funding or other 
issues to maintain a peace process and peace negotiations 
between Israel and the Palestinian Authority.
    That is also an important and essential part of the way 
forward, in my view. I would point out one other aspect of 
this, which is very closely related to it, and that is 
incitement to violence and to terrorism on the part of the PA--
officially Palestinian Authority in Ramallah.
    I am not speaking here of Hamas, which we know incites to 
terrorism and violence against Israelis and Jews. But the PA 
itself under Mahmoud Abbas and sometimes, I am sorry to say, 
Mahmoud Abbas himself are also guilty of incitement to violence 
and terrorism by glorifying terrorists.
    Not just paying salaries for them but by calling them 
heroes and role models for future generations. This is 
something that I personally have spent the last couple of years 
analyzing and documenting and speaking to both Israelis and 
Palestinians about in great detail.
    And I published on the Washington Institute Web site, if 
you will permit me just sort of an unpaid commercial here, a 
very long report about this called ``Beyond Words: Causes, 
Consequences and Cures for Palestinian Authority Hate Speech'' 
where I document and analyze the reasons for and also the 
remedies for this kind of rhetorical official glorification of 
terrorism on the part of the Palestinian Authority. This too is 
an issue that I think needs to be addressed in the context of 
the current peace talks.
    Just as seriously as we talk about Jerusalem or refugees or 
Israeli security or any other issue, the issue of incitement 
and hate speech needs to be part of these diplomatic----
    Mr. Lowenthal. Thank you. Mr. Perles, do you have anything 
to add?
    Mr. Perles. I would. You know, I must say I apologize. I am 
not as colorful as my colleagues are here. Maybe I am more of a 
technocrat.
    But speaking as the--speaking as the technocrat, what we 
found in the Arab Bank case and in order to meet our burdens of 
proof in this kind of litigation we really need to track this 
money and tie particular payments to particular acts of 
violence.
    What we find is what I could best describe is an abuse of 
bank secrecy--that is Palestinian bank--Palestinian Authority 
bank secrecy laws, Jordanian bank secrecy laws, Lebanese bank 
secrecy laws.
    The problem really is very much akin to Credit Suisse using 
Swiss bank secrecy laws to hide, if I read the newspapers 
correctly recently, the economic accounts of some 22,000 
Americans who were engaged in income tax evasion.
    In the Arab bank case, I believe a total of five Federal 
judges--two district court judges, three Federal appellate 
judges--have now accrued discovery sanctions against the Arab 
bank for its failure to turn over discovery. The bank is 
relying inappropriately in the U.S. court system on 
Palestinian, Jordanian and Lebanese bank secrecy laws. That, by 
the way, is the nub of our current dispute with the Department 
of State.
    Mr. Lowenthal. Thank you, and I yield back.
    Mr. Poe. The Chair recognizes the gentleman from Florida, 
Mr. Yoho, for 5 minutes.
    Mr. Yoho. Thank you, Mr. Chairman. I appreciate it. 
Gentleman, I appreciate you being here and I find it 
unacceptable that since mid-1990s we have given $5 billion to 
the Palestinian Authority in aid is what I have come up with 
and there is no accountability.
    And I see it over and over again that we give foreign aid 
for these countries and, like you said, it is under a mushroom 
and we know what that means--the growing environment of a 
mushroom--and that is what I feel like a lot of the time.
    You said that you would cut it off by tonight. What would 
be the ramifications if we were to do that, Mr. Black?
    Mr. Black. You are being extorted right now. You are giving 
in to it. Basically, the idea is if we stand up to terrorism 
they are not going to sign a peace deal. They are never going 
to sign a peace deal as long as they are being paid for 
terrorism.
    Mr. Yoho. Right.
    Mr. Black. Stop this funding today, and if it is that 
important to them as they say it is, that they would rather 
starve than stop this program, then they have spoken for 
themselves.
    I believe that people in this neck of the woods want peace, 
Arab and Jew. But you must give peace a chance and you can't 
keep rewarding this bad behavior.
    If this--if this program is stopped forcibly by U.S. 
cessation of funding, there will be a lot of noise and that 
would just typify what the Arab street is like. But it will 
take leadership.
    We just can't put people on salary for killing Americans, 
Israelis and Europeans----
    Mr. Yoho. I agree.
    Mr. Black [continuing]. In the most uncivilized fashion. 
Stop it tonight if possible.
    Mr. Yoho. Dr. Pollock, you were talking about the boycott. 
If the PA and Israel, if an agreement does not work in the 
peace process, do you see the boycott getting worse and 
increasing or do you think it is going to be a nonissue?
    Mr. Pollock. I think in Europe it will increase and I would 
like to quote for the record a statement by the EU Ambassador 
to Israel who said recently, and this is--this is a quote of 
what he said, not my opinion.
    He said,

        ``If the talks are wrecked as a result of an Israeli 
        settlement announcement then the blame will be put 
        squarely on Israel's doorstep. Israel will find itself 
        increasingly isolated not necessarily because of any 
        decisions taken at a government level but because of 
        decisions taken by a myriad of private economic actors, 
        be it companies, be it pension funds, be it 
        consumers.''

This is the EU Ambassador to Israel.
    Mr. Yoho. Are you saying--are you finding that--is there 
anti-Israeli sentiment about the acquisition of land over the 
years?
    Mr. Pollock. Yes.
    Mr. Yoho. Is that why they are doing this?
    Mr. Pollock. Yes. Yes.
    Mr. Yoho. They are just getting to a point to where they 
are saying they are not going to tolerate this anymore? Is that 
the sentiment you are seeing?
    Mr. Pollock. Yes. That is correct.
    Mr. Yoho. I guess I want to ask all of you this. Do you 
feel the release of the PA prisoners in Israel was a wise move 
with Secretary Kerry going over there and demanding that? Mr. 
Perles, if you want to start.
    Mr. Perles. I can answer in a very succinct fashion. No.
    Mr. Yoho. Dr. Pollock.
    Mr. Pollock. I think that this was an Israeli Government 
decision, not an American demand, and the Israeli Government 
had a choice of whether or not to prefer a settlement freeze or 
a prisoner release and they chose a prisoner release.
    Mr. Yoho. Mr. Black.
    Mr. Black. Well, you have to ask yourself why was it so 
imperative that the killers be released, and that is because 
the PA places a high premium on those among its citizens that 
kill civilians.
    Mr. Yoho. Okay. And then--let us see--would you say the 
U.S. Government, particularly the State Department, is helpful 
in assisting the victims in these cases, Mr. Perles, in your 
experience?
    Mr. Perles. You know, that is a--that is a difficult 
question for me to ask in a--or a difficult question for me to 
answer in a public forum.
    Mr. Yoho. Do you want to submit your answer?
    Mr. Perles. Let me--let me say that it takes a lot to get 
the State Department motivated to help people. They are not 
culturally, as an institution, helpful. When they decide that 
they're going to help people, they are tremendously effective.
    So that what I have could best be described as a 
relationship in constant tension with the State Department. 
Most of the time we are in an adversarial posture. In the Arab 
bank case, for example, we are currently in an adversarial 
posture.
    When Libya claims the reconciliation process was going 
forward, the Department of State determined that the interested 
victims and the Department's interests were synonymous with one 
another and the department was tremendously effective in 
assisting victims and creating a settlement with the Libyan 
Government.
    In fact, at the request of the Department of State's legal 
advisor's office I went with then legal advisor John Bellenger 
to a DC bar lunch honoring him and spoke his praises through 
the work his office had done in support of terror victims in 
that settlement.
    So the answer is we have a very complicated relationship 
that is always a tension.
    Mr. Yoho. Okay. I am out of time and I appreciate all three 
of you. Thank you. Thank you, Mr. Chairman.
    Mr. Poe. I thank the gentleman. The Chair will recognize 
for 5 minutes the gentleman from Illinois, Mr. Kinzinger.
    Mr. Kinzinger. Thank you, Mr. Chairman.
    It is interesting. This is a very interesting subject and, 
you know, if we look at the wider Middle East and we look at 
what I would call negotiations in Iran, you know, I think it is 
important.
    Even though that is not the actual issue we are here to 
talk about it is important to stress that I don't see any way 
that with the interim agreement with Iran that we end up seeing 
an Iran without the capability to enrich Uranium.
    And so you see what is happening in those negotiations. You 
see what is happening with the issues we talk about and there 
is a lot to be very concerned with. And so I appreciate the 
three of you coming here.
    I am probably not going to take all 5 minutes and as--I had 
another hearing and so I came a little late so if these 
questions have been asked I apologize.
    But Mr. Pollock, what can Israel do to diversify its trade 
beyond Europe so that this doesn't have quite the impact and 
Israel can be strong without these boycotts?
    Mr. Pollock. Yes, that is an excellent question. Thank you.
    I think that the Israelis, both the private sector and the 
Israeli Government, are already trying to move in that 
direction as a kind of fail safe, just in case.
    But the reality is that for the foreseeable future it is my 
professional judgment that the EU and other European countries 
who may not be in the EU will remain very, very important trade 
and investment partners for the Israeli economy.
    And so the Israeli Government is currently engaged in 
trying to estimate in a, I think, straightforward factual way 
what the consequences for the Israeli economy would be in the 
case of--in case this boycott, divestment and sanctions 
movement does gather strength in Europe.
    But I want to emphasize that this is a potential threat. At 
the moment, it is not a real threat to the Israeli economy. 
European countries and European companies continue to trade on 
an increasing scale with Israel and to invest on an increasing 
scale with Israel and to send tourists at increasing volumes to 
Israel.
    This is not true of every single European country. You do 
see a pattern in which some of the Scandinavian countries and 
Holland in particular and Ireland in particular are pulling 
back to some extent from those economic relationships with 
Israel.
    But that is more than offset by increasing economic 
relationships with the other larger European economies.
    Mr. Kinzinger. Yes. I mean, I think, obviously, it is in 
Europe's interest to have these great relationships and if you 
are going to push any of your power anywhere maybe it ought to 
be somewhere like Russia right now, something like that, with 
what is going on.
    Mr. Pollock. Yes. I would agree with you, sir. If Europe is 
going to impose sanctions it should be against Russia, not 
against Israel.
    Mr. Kinzinger. It might make sense. It has been said that 
the official Palestinian position is against boycotts. Can you 
elaborate on that?
    Mr. Pollock. Yes. Thank you.
    Again, President Abbas was asked about this question on the 
occasion of the Nelson Mandela memorial service in South Africa 
not long ago and he said quite publicly, and I want to 
emphasize this was in Arabic to an Arab audience so it counts 
for more.
    He said that the PA officially opposes boycotts against 
Israel. He said we, Palestinians, are negotiating with Israel. 
Therefore, how can we ask other people to boycott Israel if we 
are not boycotting Israel.
    Now, subsequently, unfortunately, and this is a pattern in 
Palestinian official messaging--subsequently, that statement 
was walked back and watered down and I would say almost 
contradicted in statements by other senior Palestinian 
officials--not Abbas himself but some of his more senior 
colleagues in the PA Government who said, for example, that we 
don't advocate boycotts against Israel but we do advocate 
boycotts against settlements.
    Or that we don't advocate boycotts against Israel at a 
government level but we do advocate private boycotts against 
Israel. Or who simply said, as Hanan Ashrawi did very 
publicly--she is a member of the PLO executive committee and an 
important spokeswoman for the PA Government--who said that 
boycotts against Israel should be supported and that BDS should 
be supported because it is, again, as she put it, ``the 
Palestinian nonviolent resistance'' against Israeli occupation.
    So what you have is a mixed message from the Palestinians.
    Mr. Kinzinger. Thank you. Mr. Black, just quickly--when 
these folks receive this money that you are talking about is 
there anything that restricts them from giving that money to 
further terror causes?
    Mr. Black. None at all. They have a POA, a power of 
attorney. It can change from time to time and they designate 
who the recipient is.
    If the recipient is their girlfriend or their terrorist 
cell or their attorney or their mother it can go any--to any 
destination that they choose.
    Mr. Kinzinger. Thank you.
    Mr. Chairman, I yield back.
    Mr. Poe. I thank the gentleman. I appreciate the witnesses 
for your excellent insightful testimony. Mr. Perles, especially 
on a personal note, thank you for the work you do for victims. 
Thank you very much.
    Mr. Perles. Thank you, sir.
    Mr. Poe. Thank you, gentlemen. Oh, you have another 
question?
    Mr. Sherman. No, not a--just a----
    Mr. Poe. Comment?
    Mr. Sherman. I also want to commend Mr. Perles for his 
record, and as an old tax lawyer a couple of things for the 
record.
    You just talked here that if you get a 44 percent Federal 
tax subsidy for these charitable contributions I think that is 
an insult to my former colleagues and tax lawyers who wouldn't 
settle for less than 60, 65 percent subsidy when you can make 
gifts of appreciated capital gain property reduce state as well 
as Federal income taxes.
    Also as to tax administration, a big chunk of the PA's 
revenue is remitted to them by Israel, which collects for the 
PA their tariffs and value added taxes.
    The decision as to whether money, which is fungible, should 
be turned over to an organization that does some good things 
and does some absolutely terrible things is one we will wrestle 
with in the future.
    I yield back.
    Mr. Poe. I thank the gentleman. I thank the gentlemen once 
again for their testimony.
    This committee is adjourned.
    [Whereupon, at 11:29 a.m., the committee was adjourned.]
                                     

                                     

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