N.Y. Court Reinstates Fraud Charges Against JNF Filed by Former Donors

The Jewish National Fund has suffered a legal setback in its fight against a group of former donors trying to pressure it to fund projects in the Israeli-administered territories.

A New York appeals court voted 4-1 last month to reinstate charges that JNF defrauded contributors by suggesting in campaign materials that it provides funds to the West Bank, Gaza Strip and Golan Heights.

In fact, funds raised by JNF of America go to projects located only within Israel’s 1967 borders.

At issue were maps JNF uses in campaign literature that show Israel along with the territories it captured in the Six-Day War of 1967. A lower court had dismissed the donors’ claim that by using those maps, JNF was in violation of New York consumer protection laws.

But the lower court also had imposed an injunction requiring JNF to state in its campaign literature that “funds contributed to the Jewish National Fund of America are used only for projects within the Green Line,” as Israel’s 1967 border is called.

The appellate court upheld that order, but also overturned the lower court’s dismissal of the fraud claim.

According to the appeals court’s June 21 majority ruling, JNF failed to show that its fund-raising activities were exempt from the same laws against fraud as any business.

Since JNF is not a political advocacy group and solicits money from donors, its rights of free speech under the First Amendment are limited by consumer laws prohibiting false advertising, the court ruled.

JNF’s attorney, Stephen Wagner, expressed disappointment with the decision, saying it “curtails the JNF’s First Amendment rights and sets a bad precedent for other charities.”

The ruling, he noted, said a charity can be held liable for fraud, whether or not the organization intentionally misled donors.

A TWO-YEAR LEGAL BATTLE

Wagner said he did not yet know if JNF would bring the case to the New York Court of Appeals, the state’s highest court.

The Ad Hoc Committee for Jewish Survival in Jerusalem, Judea, Samaria, Gaza and the Golan Heights, the organization supporting the list of plaintiffs in the lawsuit, hailed the ruling as a “major victory.”

The committee, which has been fighting a legal battle against JNF for more than two years, contends that JNF should fund afforestation and land reclamation beyond the Green Line.

The group is led by Michael Teplow, head of the U.S. branch of Tehiya, a right-wing political party in Israel that favors annexation of the administered territories.

The lone dissenting judge in the appeals court decision argued that because the plaintiff’s motives appeared to be strictly political, the entire complaint against JNF should be thrown out of court.

Judge Theodore Kupferman wrote that the Ad Hoc Committee did not sufficiently demonstrate “in what way they have been injured” by JNF’s advertising.

“They merely contend that political concerns for Israel would require that the defendant use funds collected in the United States in a political manner. It is not the function of this court to decide such a political or foreign policy question,” Kupferman wrote.

“New York State has no interest in deciding where in Israel funds legitimately collected here shall be spent,” he wrote.

But the court’s majority opinion said that the “controversy does not require the court to determine whether the State of Israel encompasses territories across the Green Line. The only issue raised by plaintiffs is whether defendant is misrepresenting the use to which funds obtained from contributors are put. Therefore, there is no political question involved,” it said.

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