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Home  » Action Alerts   »  Demand Substantial Loan Guarantee ...

Demand Substantial Loan Guarantee Deductions

‘Washington Wednesday’ Action Alert
US Campaign to End the Israeli Occupation
Contact the Media, Administration, State Department, and Congress
Demand Substantial Loan Guarantee Deductions
 
ACTION REQUESTED: Fax, call, and/or email the Bush Administration, the State Department, and your Members of Congress and demand that future deductions in Israel’s loan guarantees reflect fully the amount of money that Israel spends in the Palestinian occupied territories, as required by law. In addition, please write an op-ed or letter to the editor for your local newspaper urging that future required loan guarantee deductions to Israel are substantial and not just symbolic.
 
CONTACT INFORMATION AND RESOURCES:
 
To send an op-ed or letter to the editor, visit Palestine Media Watch at http://www.pmwatch.org
 
White House: phone 202-456-1111, fax 202-456-2461, president@whitehouse.gov
 
State Department: phone 202-647-6575, http://contact-us.state.gov/ask_form_cat/ask_form_secretary.htm
 
Congress: switchboard 202-224-3121 or 800-839-5276
 
Detailed contact information for individual Members of Congress can be found at http://www.congress.org
 
If you would like to send an email to your elected representatives, visit Citizens for Fair Legislation at http://www.cflweb.org/congress_merge_.htm
 
BACKGROUND: In April 2003, Congress authorized $9 billion in U.S.-backed loan guarantees to Israel (Public Law No. 108-11: Emergency Wartime Supplemental Appropriations Act, 2003). Congress mandated that U.S. loan guarantees to Israel may be issued "only to support activities in the geographic areas which were subject to the administration of the Government of Israel before June 5, 1967." The legislation also stipulates that the amount of the loan guarantees shall be reduced "for activities which the President determines are inconsistent with the objectives and understandings reached between the United States and Israel regarding the implementation of the loan guarantee program." The legislation also requires that the President submit to Congress a report no later than September 30—the end of the fiscal year—detailing the mandatory deductions to be made.
 
In August 2003, the United States and Israel agreed upon the terms and conditions of the loan guarantees. The agreement specifies that Israeli government expenditures beyond the Green Line will be deducted from the loan guarantees, according to the Israeli financial paper Globes. Shortly thereafter, Israel made use of the loan guarantees and floated $1.6 billion of bonds on the international capital market. Loan guarantees boost Israel’s credit rating, typically lowering the interest that it pays on bond issues and making it less expensive to borrow money on the international capital market.
 
On September 16, the State Department announced that the United States would make deductions in the loan guarantees to reflect Israel’s expenditures in its illegal occupation of Palestinian territories. Deputy Spokesperson Adam Ereli announced that "a reduction will be made in accordance with this legislation [The Emergency Wartime Supplemental Appropriations Act of 2003]. The precise amount is still being determined, but will be an estimate based on a range of Israeli Government expenses associated with the settlement activity."
 
However, on September 30, the due date for the President’s report to Congress on loan guarantee deductions, the State Department backtracked and postponed making a decision on loan guarantees deductions for fiscal year 2003. State Department spokesperson Richard Boucher stated: "We have an understanding with the Israelis that there will be deductions. We just have not finalized our decisions on the amount. We'll report to Congress that and we will continue to work through our discussions with the Israelis and internally to determine the exact amounts and exactly what we think it should apply to, consistent with the law." On the same day, the Administration sent a letter to Congress informing it that it had not yet made a decision on the amount to be deducted from the loan guarantees.
 
The State Department announced on November 26 that the United States is deducting $289.5 million from Israel's loan guarantees.  This deduction is approximately half of the amount of money that Israel spends yearly on non-military expenditures in the Palestinian occupied territories, excluding the cost of the Wall.  Therefore, the deduction is more symbolic than substantive and does not adhere to the spirit or the letter of the legislation on loan guarantees.  
 
TALKING POINTS:
 
The Administration’s decision to deduct $289.5 is more symbolic than substantive. Congress made clear that dollar-for-dollar deductions in the loan guarantees shall be made for the amount of money that Israel expends in its illegal occupation of Palestinian territories in the West Bank, Gaza Strip, and East Jerusalem.  Future deductions in Israel's loan guarantee package must reflect the spirit and letter of the legislation and make substantive cuts to reflect accurately Israel's expenditures in the Palestinian occupied territories. 
 
Israel continues to make substantial expenditures in the Palestinian occupied territories. Israel spends at least $556 million yearly on non-military expenditures in its illegal settlements in the West Bank and Gaza Strip, according to the Israeli newspaper Ha’aretz. Since 1967, Israel has sunk more than $10 billion in non-military expenditures into its illegal settlements. According to Israeli plans, the separation wall that Israel is building illegally on expropriated West Bank land will stretch 600-650 km (372-404 miles), annexing 98% of the Israeli settlement population and between 45-55% of the West Bank. At a cost of 10 million shekels/km ($2.25 million/km), the total estimated cost for the wall is at least $1.5 billion.
 
Not making accurate loan guarantee deductions sends the wrong signal to Israel and the Palestinians. The Administration’s decision to deduct only $289.5 million from Israel's loan guarantees gives Israel a tacit green light to continue building new settlements and expanding existing settlements and to continue building a separation wall in the West Bank. All of these actions are illegal under international law and are preventing the establishment of a just peace between the two peoples. Despite U.S. objections to the route of the wall, it appears that the United States is sanctioning this land grab by not deducting accurately from Israel’s loan guarantees.
 
The wall and settlements undermine the chances for a just peace and security. Israel is free to build border structures within its territory. However, the wall that Israel is constructing runs deep into the West Bank and is being built on illegally confiscated Palestinian territory. The wall is creating tragic humanitarian consequences by cutting off access to precious water resources and at least 40,000 acres of prime agricultural land in the West Bank. Entire villages and cities are being completely enclosed or trapped between the wall and the Green Line and neighbors and even family members are being cut off from each other. If the wall is completed, analysts estimate that as much as 55% of the West Bank, including settlements and areas outside of the wall, would be de facto annexed to Israel and be inaccessible to Palestinians. Along with the continued expansion of Israel’s illegal settlements, this would make impossible the formation of a viable and sovereign Palestinian state. Continued violence demonstrates that no wall can achieve the security that both Israelis and Palestinians are seeking. Only a just peace can do so.
 
MODEL LETTER (PLEASE PERSONALIZE):
 
Dear _________________,
 
I strongly urge you to ensure that future deductions made to the amount of Israel’s loan guarantees reflect accurately Israel's expenditures in its illegal occupation of Palestinian territories.  The State Department announced on November 26 that the United States is deducting $289.5 million from Israel’s loan guarantees. This deduction is approximately half of the amount of money that Israel spends yearly on non-military expenditures in the Palestinian occupied territories, excluding the cost of the separation wall it is building on expropriated Palestinian land. This deduction is more symbolic than substantive and does not adhere to the spirit or the letter of the legislation on loan guarantees. 
 
Congress made clear that dollar-for-dollar deductions in the loan guarantees shall be made for the amount of money that Israel expends in its illegal occupation of Palestinian territories in the West Bank, Gaza Strip, and East Jerusalem. Congress mandated that the $9 billion U.S.-backed loan guarantees to Israel, authorized in April 2003, may be issued "only to support activities in the geographic areas which were subject to the administration of the Government of Israel before June 5, 1967." The legislation also stipulates that the amount of the loan guarantees shall be reduced "for activities which the President determines are inconsistent with the objectives and understandings reached between the United States and Israel regarding the implementation of the loan guarantee program."
 
Israel continues to make substantial expenditures in the Palestinian occupied territories and deductions in the loan guarantees must be made to reflect this spending. Israel spends at least $556 million yearly on non-military expenditures in its illegal settlements in the West Bank and Gaza Strip, according to the Israeli newspaper Ha’aretz. Since 1967, Israel has sunk more than $10 billion in non-military expenditures into its illegal settlements. According to Israeli plans, the separation wall that Israel is building illegally on expropriated West Bank land will stretch 600-650 km (372-404 miles), annexing 98% of the Israeli settlement population and between 45-55% of the West Bank. At a cost of 10 million shekels/km ($2.25 million/km), the total estimated cost for the wall is at least $1.5 billion.
 
Not making substantive loan guarantee deductions sends the wrong signal to Israel and the Palestinians. Symbolic deductions give Israel a green light to continue building new settlements and expanding existing settlements and to continue building a separation wall in the West Bank. All of these actions are illegal under international law and are preventing the establishment of a just peace between the two peoples. Despite U.S. objections to the route of the wall, it appears that the United States is sanctioning this land grab by not deducting from Israel’s loan guarantees.
 
I look forward to your response and I am eager to hear the steps that you will take to ensure that future loan guarantee deductions are made in accordance with the law.
 
Sincerely,
(Full contact information here)
 
ABOUT ‘WASHINGTON WEDNESDAY’: 'Washington Wednesday' is a monthly national day of advocacy for a just resolution of the Israeli-Palestinian conflict organized by a coalition of national organizations. Participating organizations are: American Muslims for Jerusalem (AMJ), Arab American Institute (AAI), Council for the National Interest (CNI), Muslim Public Affairs Council (MPAC), the government affairs affiliate of the American-Arab Anti-Discrimination Committee (NAAA-ADC), Partners for Peace, and the US Campaign to End the Israeli Occupation. (The US Campaign to End the Israeli Occupation is a nonsectarian coalition of more than 85 organizations, including the American Friends Service Committee, MADRE, the Center for Economic and Social Rights, and Black Voices for Peace.)

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