How AIPAC May Win by Losing the Iran Deal
An FP investigation shows the lengths to which the powerful pro-Israel lobby goes to avoid disclosing its influence.
The numbers are eye-opening: The American Israel Public Affairs Committee saw its annual budget skyrocket in just 13 years from $15.8 million to $64.3 million in 2013 — the most recent year for which there are publicly available figures — a phenomenal 307 percent rate of growth for an organization that was already considered to be one of the top lobbying groups in Washington. Figuring out how the group actually spends all of that money is extremely difficult — and that’s just the way AIPAC wants it.
From the way it supports candidates for public office to its advocacy on Capitol Hill to its ongoing ad campaign attacking the Iran nuclear deal, AIPAC scrupulously abides by federal disclosure laws while managing to leave as few fingerprints as possible. It’s the transparency equivalent of the billionaire who breaks no laws but uses quirks and loopholes in the tax code to ensure he doesn’t pay Uncle Sam a penny.
The advocacy organization’s annual budget averaged about $66 million between 2009 and 2013, according to federal tax records, but it told Congress it never spent more than $3 million per year lobbying the federal government (the group’s 2014 numbers have not yet been reported to the Internal Revenue Service). In part, the disparity comes from the fact that federal law gives organizations different options for calculating the amount they spend on lobbying; AIPAC has chosen the most narrow. The tax returns it files with the IRS, which are public documents due to the group’s nonprofit status, show even less. Although the forms require filers to disclose the amount they spend on lobbying, AIPAC has entered zero or left the line blank every year since 2009.
Even in its current effort to persuade lawmakers to reject President Barack Obama’s landmark nuclear deal with Iran, AIPAC has made use of a surrogate — Citizens for a Nuclear Free Iran — that has been running commercials in 23 states and the District of Columbia urging lawmakers to vote against the deal. That effort, variously estimated to have cost somewhere between $20 million and $40 million, failed to persuade enough Democrats to block the deal in Congress, and AIPAC waged a last-ditch lobbying effort to persuade Democratic Senate leaders to even allow a resolution rejecting the Iran deal to get an up-or-down vote on the Senate floor. Patrick Dorton, a spokesman for Citizens for a Nuclear Free Iran, declined repeated requests for comment.
Although it appears headed for a legislative defeat, the effort hasn’t been a total failure. AIPAC has seen the numbers of Americans who disapprove of the deal increase while it has raised more money so far in 2015 than in any previous year. The group hopes to double its budget within five years, and the fight over the deal — even though it ended in a loss — could help AIPAC get there.
“This fight has been good for AIPAC in that it brought in a lot of money,” Steven Rosen, who lobbied for the organization until 2005, told Foreign Policy.
That’s not unprecedented. AIPAC has waged other losing battles in Washington that led to bigger donations from its members. As the Forward reported, AIPAC’s fundraising also increased after it unsuccessfully battled the Reagan administration’s 1981 sale of AWACS surveillance aircraft to Saudi Arabia and after a 1991 decision by President George H.W. Bush’s administration to condition a $10 billion loan package to Israel.
Whether it meets its new fundraising targets or not, one thing is for certain: The public will have little idea of how AIPAC’s tens of millions of dollars are spent.
More often than not, AIPAC’s advocacy has been employed in winning efforts. As recently as December 2014, AIPAC managed to secure 80 Senate co-sponsors — including 47 Democrats — on a bill that strengthened the strategic cooperation between the United States and Israel. On Aug. 1, 2014, the House overwhelmingly passed by a margin of 395-8 an emergency appropriation that provided $225 million for Israel’s Iron Dome missile defense system, in the midst of an Israeli military operation against Hamas in Gaza and just before Congress headed out for its five-week August recess. A 2013 resolution, calling for full implementation of sanctions against Iran and opposition to its nuclear program, drew 90 co-sponsors. AIPAC supported all three measures.
AIPAC declined to answer questions from FP about its fundraising, lobbying, and political activities, instead emailing a statement on its position on the debate over the Iran deal.
“We continue our work to achieve the largest possible bipartisan majority that will reject this flawed deal,” spokesman Marshall Wittmann wrote. “We must oppose this deal because it will not block Iran’s path to a bomb and will enrich and entrench the world’s leading state sponsor of terror.”
AIPAC has always preferred to keep the focus on its issues rather than how it influences Congress and the executive branch, and how much it spends doing so. That is something that AIPAC has always made difficult to determine. It was incorporated in 1963, when the Senate Foreign Relations Committee under the guidance of Sen. William Fulbright (D-Ark.) investigated whether advocates for Israel were disclosing their activities under the Foreign Agents Registration Act (FARA). AIPAC was set up to raise money from U.S. citizens, not from foreign sponsors, allowing it to avoid the detailed disclosure of its activities required by FARA.
Although the group’s members have long been very active donors and fundraisers in U.S. elections, AIPAC’s activities do not require it to register as a political committee with the Federal Election Commission (FEC). In response to a 1989 complaint filed by a group of former government officials, the FEC found that AIPAC’s activities, including meeting with candidates and sharing campaign information, “demonstrated a serious interest in influencing federal elections,” according to the commission’s website, but did not require it to register. A nine-year court battle confirmed the FEC’s ruling.
Among special-interest groups, AIPAC’s low profile is unique. The U.S. Chamber of Commerce uses a broader definition of lobbying when calculating what it spends, disclosing the amount it spends influencing Congress, state and local governments, and the public through its advertising campaigns. The National Rifle Association has a traditional political action committee (PAC) that discloses its donors. The League of Conservation Voters and the Club for Growth have PACs that also allow members to earmark their contributions directly to candidates. In 2014, members of the former group sent more than $1.7 million to congressional campaigns that way to show their interest in environmental policies, and Club for Growth supporters signaled their backing of the free market with $3.4 million in such contributions. AIPAC keeps its own disclosures to a minimum.
The information AIPAC discloses does not provide a complete picture of its influence activities. The biggest programmatic expense in the organization’s expenditures in its most recent tax return was $37.9 million for its annual three-day policy conference, held this year from March 1 to 3 in Washington. The event, according to a website AIPAC set up to promote it, attracts as many as two-thirds of the sitting members of Congress, administration officials, and thousands of AIPAC donors from across the country. In addition to the speeches and the breakout sessions, attendees are also afforded time for a “lobbying appointment” — the “opportunity to meet with your member of Congress and speak to them [sic] about issues of concern to the pro-Israel community.” Some 14,000 people attend the conference.
“When you meet a member as a volunteer, you’re taken in a different light,” Ben Chouake, a physician, the president of a pro-Israel political action committee, and an AIPAC donor, told Foreign Policy. “They’re seeing lobbyists all day. We get a better reception.”
Not only is such lobbying — by constituents, who will also turn out on Election Day — effective, but it leaves no paper trail. Efforts undertaken by private citizens of their own volition to influence their elected officials — called grassroots lobbying campaigns — are exempt from federal lobbying disclosure laws.
AIPAC’s lobbying disclosure forms do list 10 employees, including two former congressional staffers, who meet the threshold for registration — 20 percent of an individual’s time spent lobbying and two contacts with federal officials. Like all lobbying disclosure forms, though, they reveal little of what those lobbyists actually do.
Similarly, AIPAC’s charitable arm, the American Israel Education Foundation, discloses no spending on lobbying, though one of its key functions is to arrange travel for members of Congress to Israel. In the first half of August 2015, it paid $1.2 million to take 56 House members, 47 of their family members, and five staffers to Israel, according to disclosures filed with the clerk of the House of Representatives. On the agenda for the visiting lawmakers: briefings on “Israel’s quest for peace” with an advisor to the Ministry of Foreign Affairs, “Israel’s northern border concerns,” and “the Iranian threat,” among other events.
And while AIPAC itself could form its own political action committee, which would allow its members to either contribute to the PAC or use it as a means for delivering earmarked contributions directly to politicians, AIPAC has never done so, instead relying on an army of bundlers to funnel money to candidates and party committees. Campaigns have to disclose only registered lobbyists who gather contributions, a rule that doesn’t apply to AIPAC’s members. Some donors to AIPAC do make use of other pro-Israel organizations, like NORPAC, Citizens Organized PAC, or the National Action Committee, to give to members of Congress.
An analysis of AIPAC’s board members’ contributions shows the same bipartisan pattern of giving. Between 2009 and 2014, the roughly 50 board members contributed more than $7.4 million to federal candidates, PACs, and parties. To put that number into perspective, Citigroup’s executives, their family members, and the company’s PAC gave $6.8 million during the same time period, according to the Center for Responsive Politics.
The board members evenly split their contributions, directing about $3.1 million to Democratic candidates and party committees and roughly the same amount to Republicans. They donated the remainder of the funds to PACs and other committees that do not have a partisan affiliation. Among the top recipients were House Speaker John Boehner (R-Ohio), Minority Leader Nancy Pelosi (D-Calif.), Sen. Lindsey Graham (R-S.C.), and Sen. Robert Menendez (D-N.J.).
But in a campaign finance system awash in money, that might not be enough. JStreetPAC, the political donating arm of the left-leaning J Street organization, which was set up to counter AIPAC’s positions on Palestinian issues, provided $6.33 million to candidates over the same time frame. And the board members of the Republican Jewish Coalition, the partisan operation with an enormous footprint, due to huge GOP donors Sheldon Adelson and financier Paul Singer, gave a whopping $76.7 million over the same period, including millions of dollars to super PACs.
“Candidates still prefer hard money because they get to control how it’s spent,” Sheila Krumholz, executive director of the Center for Responsive Politics, which tracks political spending, told FP. “On the other hand, because hard-money contributions are limited, it’s often a drop in the bucket in comparison to what super PACs and dark-money nonprofits can raise and spend.”
Adelson had been one of the biggest donors to AIPAC in the 1990s but reduced his giving, including scaling back a pledged donation to help fund the construction of a new Washington headquarters for the group. The casino magnate objected to AIPAC’s support of then-Israeli Prime Minister Ariel Sharon’s decision to withdraw from the Gaza Strip, according to Rosen, the longtime former AIPAC lobbyist. Adelson continued to fund the American Israel Education Foundation, particularly its efforts to send Republican first-term members of Congress to Israel.
Adelson now focuses his giving on other vehicles in order to carry out pro-Israel advocacy. Among them are the Israeli-American Council, also known as the Israeli Leadership Council, which went from a total budget of about $140,000 in 2007 to a more robust $5.5 million in 2013. According to the group’s website, it aims to organize the half-million Israeli-Americans in the United States to, among other things, “foster active support of initiatives that further Israel’s welfare, security, education and its relations with the United States.” And he’s a large donor to the Republican Jewish Coalition, which was founded in 1985. In the 2012 election year, it had a budget of more than $10 million, according to IRS filings. It spent $4.6 million that year running ads opposing Obama, while its associated super PAC chipped in more than $1.7 million in the same effort.
The overtly partisan conservative pro-Israel groups funded by Adelson have made AIPAC, which has always sought good relations with both parties, appear to be siding with Republicans. “Fighting the Iran vote was so much based on Israel,” said Yossi Gestetner, a public relations service provider for political campaigns in New York state and for corporations. “And in 2015, Israel means [Israeli Prime Minister] Bibi [Netanyahu], Bibi means the GOP proxy war against the president, and a vote against the deal is a win for the GOP. Hence many otherwise reliable Democrats rallied to Obama’s side.”
Gestetner is quick to add that AIPAC’s effort on the Iran deal focused more on how U.S. security would be compromised, but he saw other groups muddying that message.
But Chouake views Adelson’s giving as beneficial and perhaps even necessary. “Our level of engagement with the Republican Party was much less than the Democratic Party,” he told FP. “You still have longer-term relationships with Democrats than Republicans.”
Chouake added that the campaign against the Iran deal has to be put in broader perspective. “Due to the intense advocacy of the citizens of the U.S. — and AIPAC played a big role in that — you had a vote on the agreement,” he told FP. “I wouldn’t call that a total loss.”
For its part, AIPAC intends to up its game in the realm of campaign contributions. The group features multiple tiers of giving — a club system, ranging from the Washington Club, with a minimum $1,800 annual gift, all the way up to Minyan, “an elite circle who participate in exclusive events and travel opportunities. They have engaged in intimate conversations with Israeli Prime Minister Benjamin Netanyahu, former President Bill Clinton, former Prime Minister Tony Blair, former Secretary of State Condoleezza Rice, Nobel Laureate Elie Wiesel and many others,” in exchange for a $100,000 annual donation.
“In this stratified club-level approach, they are now putting more emphasis on political giving,” Rosen, the former AIPAC lobbyist, told FP. “Donors are being asked to match their AIPAC giving with political giving.”
If their members manage to meet that goal, that would mean tens of millions of dollars pouring into the coffers of campaigns and political parties, which may well translate into more influence for the organization. “This last battle,” Rosen said of AIPAC’s effort on the Iran deal, “may be remembered as the start of another growth spurt.”
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