Use of the U.S. False Claims Act (FCA) to attack nonprofit organizations’ programs in Palestine took a setback in late December 2019 when the Zionist Advocacy Center’s (TZAC) FCA case against Oxfam Great Britain was dismissed. On Dec. 18 TZAC filed a Notice of Voluntary Dismissal, following the decision of the U.S. Attorney for the Southern District of New York’s November motion to dismiss. TZAC alleged Oxfam’s Gaza Urban and Peri-Urban Agricultural Platform (GUPAP), which worked to address food insecurity and decrease dependence on foreign aid and markets, violated the terms of its grant from USAID.
The Oxfam GB Case:
Federal court unsealed TZAC’s case against Oxfam GB on February 20, 2018. The complaint alleged that GUPAP provided material support to terrorism, contrary to its anti-terrorism certification to USAID. TZAC argued that because GUPAP allegedly supported ministries tied to both Hamas, which is on the U.S. terrorist list, and the Palestinian Authority (which is not), Oxfam GB’s certification to USAID is false. Although Oxfam’s GUPAP program was funded by the Swiss government and not USAID, the USAID certification applies to all activities of an organization regardless of funding source.
The complaint alleged that, because the Ministries of Agriculture and National Economy are part of the government in Gaza and Hamas controls the government, GUPAP provided material support to Hamas by assisting the ministries with the agricultural program.
This is similar to arguments TZAC made in past cases. However, in this case, TZAC expanded its legal theory to claim that the ministries are “nominally subdivisions of the Palestinian Authority,” which it claimed is an “entity” that supports terrorism by providing financial support to family members of people injured or killed in the conflict with Israel; this included families of people convicted or accused of terrorist offenses. TZAC called this a “pay to slay” scheme, bringing hotly contested issues of fact and policy into the gray area surrounding the definition of material support. TZAC sought triple damages under the FCA.
TZAC’s complaint, claimed that Oxfam GB is part of a larger confederation that is “anti-Israel,” citing NGO Monitor (an advocacy group that engages in disinformation, according to the Policy Working Group, which is comprised of Israeli ex-diplomats, academics and others).
The complaint listed 30 USAID grants to Oxfam between October 2013 and September 2017, amounting to over $53 million in funds.
The U.S. initially declined to intervene and exercise its statutory right to take over the case, and on Sept. 20, 2019 told the court it planned to file a motion to dismiss. Oxfam later told the New Humanitarian that “We are aware of the lawsuit and reject the allegation made in it.”
A Growing Trend:
The Oxfam GB case is one example of a series of FCA lawsuits filed by TZAC against nonprofit organizations (NPOs) working in Palestine since 2015. Since 2015, only three FCA cases filed by TZAC were publicly known: Norwegian People’s Aid (2015), The Carter Center (2017), and Oxfam GB (2019). However, TZAC claims it has filed six more, but the identity of the defendants remains a mystery while the cases are under seal. Additionally, TZAC has expanded its lawsuit strategy to attack NPOs beyond FCA, and unsealed a case against the New Israel Fund, challenging the charitable status of the organization in December 2019.
The argument that any assistance or support to the Palestinian Authority is material support, despite the fact that it is not on the terrorist list, attempts to stretch the law beyond the limits of how it is currently applied. The U.S. government has provided funding to the Palestinian Authority in the same time frame that Oxfam supported the GUPAP program. If TZAC’s reasoning is taken to its logical conclusion, the U.S. government has violated its own material support prohibition, as have any other entities that have done business with or worked with the PA. That may explain why the U.S. declined to intervene in the case.
The pleadings indicate that Oxfam is represented by J. Emmett Murphy and Jeffrey S. Bucholtz of the law firm King & Spalding LLP, who successfully defended The Carter Center in a False Claims Act suit filed by TZAC.
For background on the False Claims Act see our Issue Brief.