Fred Taub
President, Boycott Watch
Presbyterian Church, USA
On the occasion of the GA 220
Dear Presbyterian Church members,
My name is Fred Taub, I am the President of
Boycott Watch and author of the book
Boycotting Peace. As an expert in
boycotts, I regularly appear in the media, from Fox News to Al-Jazeera, to the
Wall Street Journal, LA Times, USA Today and several other television, radio,
print and online publications. In addition to speaking to groups including
Scholars for Peace in the Middle-East, my work has also been cited in two cases
before the U.S. Supreme Court.
I am writing today to address the divest-from-Israel proposal before you, as
submitted by the Committee on Mission Responsibility Through Investment (MRTI)
of the Presbyterian Church (U.S.A.) on its engagement with corporations doing
business in Israel-Palestine.
Divestment is another word for boycott, a topic I address in detail in my
recently released book, Boycotting Peace, published by Balfour Books. As I
state in my book and lectures, you cannot have peace with someone who will not
sit down with you for a cup of coffee. Boycotts separate people, not bring
people together - it is a logical fallacy to assume you can separate people
into brotherhood. Peace can only be obtained and sustained when people work
together.
History proves economic cooperation is essential to building peace. The U.S.
and Canada, for example, were once warring nations but now share the world's
strongest peace because these two nations share the world's largest trade. A
similar situation exists between the U.S. and England, but the opposite exists
between the U.S. and Cuba which have neither peace not trade. A recent example
of trade maintaining peace occurred when the U.S. had foreign policy
differences with France regarding Iraq. While the relationship between the U.S.
and France has been strained, friendship remained in tact because trade makes
war between nations too expensive.
Perhaps the best great example of trade growing peace nations can be seen with
the U.S. and China, two nations which went from cold-war nuclear adversaries to
partners in seeking peace with North Korea. Trade makes war between nations too
costly to fathom.
Boycotts divide people, so rather than considering a proposal to separate
people, I suggest following the only Middle-East peace model that works, the
Israel-Jordan model, where the peace continues to grow based on growing trade.
In fact, the DGP Per Capita growth rate in Jordan has been exceeding the U.S.
growth rate for several years. Jordan's economy is booming thanks to trade with
Israel. It stands to reason, therefore, that increased trade, not boycott or
divestment, is the best model for peace, and not just in the Middle-East.
If, however, you still chose to follow the anti-peace path of divestment, you
need to be aware you will be violating several provisions of U.S. law. For
starters, the Import Export Amendments Law of 1977 created the Office of
Antiboycott Compliance within the U.S. Department of Commerce. The law states
that no U.S. persons may participate in foreign sanctioned boycotts of nations
friendly to the United States. Being that the divest-from-Israel campaign was
created on behalf of the Palestinian Authority by its legal council, and since
the PA is signatory to the Arab boycott of Israel which is coordinated by the
Arab league, it qualifies for illegal boycott status under U.S. law.
U.S. law, Part 760.1 (a) states: "For purposes of this part, the term
"person" means any individual, or any association or organization,
public or private, which is organized, permanently established, resident, or
registered to do business, in the United States or any foreign country. This
definition of "person" includes both the singular and plural and, in
addition, includes…"
In accordance with the law, not only could the Presbyterian Church, USA be held
in violation of federal law, but so can the members advocating your BDS
proposal, as well as all the individual members of the MRTI Committee if you
approve engaging in this illegal foreign sanctioned boycott. It is advisable
not to blatantly and knowingly engage in a direct violation of federal law.
Since you have already been asked to violate the law, you may still be required
to file a notice to the Office of Antiboycott Compliance under the Bureau of
Industry and Security within the U.S. Department of Commerce as defined within
the law, as Part 760 includes a requirement for all persons to report requests
to engage in foreign sanctioned boycotts, a requirement already triggered by
the previous actions of the MRTI and other Presbyterian Church, USA committees.
I strongly suggest, therefore, consulting with or hiring a tax attorney who
specializes in Part 760 as boycotting Israel requires businesses, churches and
individuals to file IRS form 5713, the International Boycott Report form,
available on the IRS.gov website. Question 11 of the form asks: "Were you
requested to participate in or cooperate with an international boycott?"
Since you have been requested to participate in the boycott, you are required
to answer yes to this question, which also affirms your filing requirement to
the U.S. Department of Commerce.
Question 12 of the form asks: "Did you participate in or cooperate with an
international boycott?" By acting upon any boycott of Israel request,
including the MRTI divestment requests, you will be required to answer yes to
this question. In doing so, you will be required to, as the form again states,
to "attach a copy (in English) of any and all boycott clauses agreed
to…" This includes, therefore, submitting with you tax returns to the
IRS all documents submitted to you in support of boycotting and divesting from
Israel, including all documentation submitted in this review by pro-BDS
advocates, such as Sabeel.
I trust all members of this committee have maintained complete and accurate
records of these proceedings, because the IRS form then states: "If the
answer to either question 11 or 12 is "Yes," you must complete the
rest of Form 5713. If you answered "Yes" to question 12, you must
complete Schedules A and C or B and C (Form 5713)." If you have already
engaged in the illegal boycott, you may also be required to file amended tax
returns for all prior years in which you may have participated in the illegal
foreign boycott.
The law is very clear. It does not take an attorney to realize the first check
box of IRS tax form 5713 states "individual," nor does it take an
attorney to realize U.S. Law Part 760 applies to individuals, as that is
specified in the opening paragraph of the law. I must suggest, therefore, that
you neither engage in anti-peace activities; nor illegal boycott activities;
nor ignore U.S. Department of Commerce rules; nor ignore U.S. Internal Revenue
Service rules; nor engage in activities that will require extra IRS form
filings and probably trigger an automatic audit. In this case, it is all one in
the same.
Respectfully,
Fred Taub
President, Boycott Watch |
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