Treasury Sanctions Foreigners for Israel: Will Israel-lobby-captured OTFI sanction Americans?

The American Israel Public Affairs Committee (AIPAC) was ordered to register as an Israeli foreign agent on November 21, 1962 when  it was part of the American Zionist Council. AIPAC has never complied  with the order, and the Department of Justice has never enforced it.  AIPAC’s associated think tank, the Washington Institute for Near East  Policy (WINEP) was spun off from AIPAC as a survival tactic during a  1980s FBI investigation into AIPAC over economic espionage that produced America’s worst-performing bilateral trade agreement.  Incredibly, decades later both organizations appeared to want to get  into law enforcement and were instrumental lobbying President George W.  Bush for the 2004 launch of the Office of Terrorism and Financial  Intelligence (OTFI) Treasury unit. (See Washington Institute for Near East Affairs congressional testimony in support of the creation of OTFI to be headed by Stuart Levey)

Although  OTFI proclaims it is “safeguarding the financial system against illicit  use and combating rogue nations, terrorist facilitators, weapons of  mass destruction (WMD) proliferators, money launderers, drug kingpins,  and other national security threats,” the secretive office has a special  blind spot for major terrorism generators, such as tax-exempt money  laundering from the United States into illegal Israeli settlements and  proliferation financing and weapons technology smuggling into Israel’s  clandestine nuclear weapons complex.

As  AIPAC and WINEP demanded in 2003, the office as initially led by  Undersecretary of Treasury Stuart Levey, who worked in unusually close  coordination with the Israeli government. Levey’s Harvard thesis (PDF)  was about how Israel lobbying organizations could become more effective  by staying beneath the radar of public scrutiny and distancing  themselves from the notoriety generated by the illicit activities of  such ideological fellow travelers as the Jewish Defense League. JDL was a  Department of Justice-designated terrorist organization involved in  bombings and more recently had a supporter indicted for 2017 violence against a peaceful protester of AIPAC’s policy conference.

In  its early years OTFI rebuffed Freedom of Information Act (FOIA)  attempts to obtain information about OTFI operations and the purpose of  Levey’s numerous taxpayer-funded trips to Israel by citing the Bank  Secrecy Act. OTFI is even more impenetrable to outside scrutiny than  most Treasury offices, most particularly OTFI’s personnel records.  Levey made OTFI briefers available mostly for private presentations and  off-the-record Q&A sessions to a limited number of organizations  well-known for having the advancement of Israel as a top organizational  goal, such as WINEP and the Foundation for the Defense of Democracies.

When  Levey finally stepped down in 2011, the top job at TFI was transferred  to David Cohen, who worked at the same Washington DC law firm as Levey,  Miller, Cassidy, Larroca & Lewin LLP (which later merged into Baker  Botts LLP). Cohen continued Levey’s practice of curtailing  OTFI’s availability to any concerned public opposition. On September 12,  2012, Cohen refused to answer reporter questions about  Israel’s possession of nuclear weapons, and whether sanctioning Iran, a  signatory to the Treaty on the Non-Proliferation of Nuclear Weapons,  over its internationally-inspected civilian nuclear program was an  example of endemic double standards at OTFI. In 2015, Mondoweissobserved  that the key requirement for Americans working in the top  “counterterrorism” job at OTFI appeared to be being both Jewish and  Zionist. Most Americans (70%) do not self-identify as Zionist. (Defined in the poll as any person who believes in the development and protection of a Jewish nation in what is now Israel.)

Cohen  was succeeded by longtime OTFI employee Adam Szubin, former counsel to  Stuart Levey, who was appointed to lead OTFI during the Obama  administration, but never confirmed by the Senate. Szubin also visited  Israel frequently on the taxpayer dime and, like Levey and Cohen before  him, kept WINEP and AIPAC lobbyists well-briefed on OTFI initiatives.  Szubin served as interim under secretary from January 20, 2017 until  February 13, 2017. In 2017 the already narrow hiring criteria of OTFI  was even further restricted. According to the news and intelligence  website DEBKAfile, OTFI’s current leader Sigal Pearl Mandelker, also a  dedicated Zionist, either had or still has Israeli citizenship.(PDF) Mandelker was confirmed by the Senate on June 21, 2017.

Within its own organization, Department of Justice policy has no issue with dual-nationals seeking and being granted sensitive jobs.  (PDF) However, there are obvious potential conflicts of interests with  an Israeli-American dual national, dedicated to the advancement of  Israel, running OTFI. The progression reveals that the leadership of  OTFI is being hand-picked by the Israel lobby on the basis of predicted  devotion to advancing the strategic position Israel. This raises the  question of how such influence negatively impacts Americans, as AIPAC  and the Israel advocacy ecosystem prepare to expand the OTFI model  across states and within the federal bureaucracy.

AIPAC  is attempting to pass new laws and enforcement powers to target  Americans found “guilty” of boycotting Israel over its endemic human  rights abuses. Drafts of  the “Israel Anti-Boycott Act” appear to allow secretive units such as  OTFI or new units housed within the Export Import Bank to fine Americans  up to $1 million and imprison them for up to 20 years for such boycott  activities. Free speech rights arguments have not been much of an  obstacle to such secretive extra-judicial operations. OTFI worked to  successfully to imprison New Yorker Javed Iqbal for nearly six years  over airing Hezbollah videos on his privately-owned cable network that  Israel affinity organizations found distasteful. OTFI shut down  nonprofit charities the Israel lobby opposed such as Al-Haramain,  Benevolence International, Global Relief, and Kind Hearts with little  due process. Because the Israel lobby’s “Israel Anti-Boycott  Act” could go even further, it is particularly relevant to scrutinize  OTFI as the model for taking sanctions applied mostly to disenfranchised  foreigners, and turning them against American citizens residing and  doing business in the U.S.

OTFI  has extraordinary powers to sanction entities and individuals and enact  secondary actions against entities that do business with them under  broad executive orders. An examination of OTFI’s Specially Designated Nationals And Blocked Persons List (SDN) Human Readable Lists provides  further evidence of Israel lobby regulatory capture. As part of its  enforcement efforts, OFAC publishes the SDN list of individuals and  companies it accuses of being owned or controlled by, or acting for or  on behalf of, targeted countries. It also lists individuals, groups, and  entities it claims are terrorists and narcotics traffickers designated  under indicators that are not country-specific. Collectively, such  individuals and companies are called “Specially Designated Nationals” or  “SDNs.” Their assets are blocked, and banks and US persons are  generally prohibited from dealing with them. Lawyers specializing in  this area attest to the difficulty of removing those listed on the  Treasury’s SDN list. The tipoff that the list is Israeli-approved, is  the absence of well-known nuclear weapons technology traffickers for the  only country in the region that actually has a clandestine nuclear  weapons program – Israel.

TFI/OFAC  operatives code each SDN individual or entity suspected of trafficking  in nuclear weapons technology with the designator code “NPWMD” meaning  “Weapons of Mass Destruction Proliferators Sanctions Regulations” which  cites 31 C.F.R part 544 authorities  for the application of sanctions. However, Israeli film producer Arnon  Milchan, who transacts millions of dollars through the US and  international financial system, and his accomplice, Israeli Prime  Minister Benjamin Netanyahu, are both known to the FBI and DHS as  having facilitated the unlawful smuggling of hundreds of nuclear  weapons triggers from the United States through a global network of  front companies. Though never convicted, nothing prevents their listing  on the SDN. However, neither individual nor their related business  organizations or front companies used in the operation appear as  sanctioned entities under the SDN.

In 2012, Belgian company Telogy International NV committed 23 violations of the Export Administration Act of 1979 (PDF)  by smuggling 22 Tektronix oscilloscopes worth hundreds of thousands of  dollars. Oscilloscopes are critical nuclear weapons testing and  production technology and export-prohibited without proper end-user  licenses. OTFI’s agents never entered either Telogy or the company that  acquired it, Electro Rent Corp, into the SDN database to ward off banks  and others from doing business with it – because Telogy smuggled the  oscilloscopes to Israel.

It  appears that OTFI leadership has ordered SDN list compilers not to  include any Israeli nuclear weapons traffickers on the list. In the  current SDN there are multiple entries for countries not believed to  have nuclear weapons programs, such as Iran and Syria. There is not a  single SDN NPWMD entry for any Israeli individual or entity, despite  the CIA’s having confirmed the  existence of an Israeli nuclear weapons program in 1974, and that the  program was fueled by material stolen from the United States in the  1960s. CIA considered Israel a proliferation threat to countries such as  Taiwan (which appears a few times in the SDN) and South Africa. Indeed,  there are only a handful of SDN entries for Israel at all, which mostly  appear to be Russian oligarchs with Israeli passports.

AIPACs  Israel Anti-Boycott Act legislation requires “enforcement actions”  under some of the same authorities used by OTFI, the International  Emergency Economic Powers Act, 50 U.S.C. § 1701-1706, in declaring as a  “US national emergency” grassroots-led boycotts of products made in illegal Israeli West Bank settlements and  other Israeli products and services. These boycotts are not really US  emergencies in any sense, but rather target a grassroots strategy to  protest of Israel’s dismal human rights record. AIPAC considers the OTFI  model of unaccountable, anonymous judges, jurors and financial  executioners as an appropriate model to apply to Americans and  foreigners who engage in entirely peaceful, lawful, First Amendment  protected boycotts. AIPAC has lobbied for passage of the Israel  Anti-Boycott Act for years even though statistically significant polling  reveals that 69.1% of Americans oppose it.

One  of the most cherished rights in America is the Confrontation Clause of  the Sixth Amendment to the US Constitution which provides, “in all  criminal prosecutions, the accused shall enjoy the right…to be  confronted with the witnesses against him.” However, the right only  applies to criminal prosecutions, and not civil cases or other  proceedings. But it is a commonplace American expectation that citizens  will not be punished for accusations of wrongdoing by anonymous  accusers. OTFI and SDN operate beyond such expectations.

Having already served as de facto criminal  prosecutors, judges and juries, and financial access executioners of  foreigners, OTFI agents may upon passage of the Israel Anti-Boycott Act  turn their extrajudicial powers on fellow Americans. Until now, OTFI  staff has never borne any burden of confrontation by the accused. And  even Americans who disagree with OTFI’s selective interpretations of  laws, based on executive orders and other authorities used to place  foreigners on the SDN list, are unable to meaningfully interact with the  OTFI personnel making such punitive policy decisions – unless they are  an attendee of a special briefing conducted by Adam Szubin and also  already fully paid-up donors or members of AIPAC or WINEP. Though  courts have held that  the US Constitution applies to non-citizens, if a foreigner has been  unjustly placed on the SDN with no due process, he or she is presently  unable to make a phone call from overseas to a known OTFI agent and  informally present their case. OTFI is now clearly worth a much closer  examination, because if AIPAC has its way either OTFI or an operation  very much like OTFI, with anonymous extra-judicial Treasury powers,  handpicked by the Israel lobby, may soon sanction American companies and  individuals it secretly finds “guilty” of boycotts.