Obama-linked nonprofit filed for new IRS status after accusation of meddling in Israeli election

The American nonprofit OneVoice Movement – under scrutiny by a U.S. Senate panel over possible links to a campaign to oust Israeli Prime Minister Benjamin Netanyahu – quietly filed paperwork that would allow it to engage in political activism after two leading Republican lawmakers questioned its use of government funds, FoxNews.com has learned.
Sen. Ted Cruz, R-Texas, and Rep. Lee Zeldin, R-N.Y., sent a letter Jan. 29 to Secretary of State John Kerry asking whether the group ­– as a recipient of almost $350,000 in recent grants from the Obama administration’s State Department – had violated its tax-exempt status when it began backing the virulently anti-Netanyahu Victory 15 campaign in Israel earlier that month.
Cruz also publicly asked whether Obama – who’s had a well-documented adversarial relationship with Netanyahu – had “launched a political campaign against” the Israeli leader in the run-up to the election which was held on Tuesday.

“What does it say about the President of the United States when he’s more concerned about undermining and attacking the prime minister of Israel than he is standing up to the mortal threat a nuclear Iran poses?”- Sen. Ted Cruz, (R-Texas)

OneVoice, which until November was headed by a veteran diplomat from the Clinton administration, quickly bushed off claims from critics that its backing of V15 meant it was targeting Netanyahu. Such an effort would be illegal under its tax-exempt status, which falls under section 501(c)3 of the Internal Revenue Code.
Just five days after the public dispatch of the Cruz-Zeldin letter, a “corporation service company” registered a new funding entity in Delaware called PeaceWorks Action, Inc. under a section of the tax code that still governs nonprofits, but allows them to engage in a limited amount of political activity. Listed under section is 501(c)4 of the tax code, PeaceWorks Action, Inc. is now featured on the OneVoice Website as one of OneVoice’s funders, alongside PeaceWorks Foundation, whose name has long been present, and which holds 501(c)3 status like OneVoice itself.
Critics are likely to see the registration as tacit admission that it had indulged in political activity alongside V15, which itself has been advised by former Obama campaign aides, including his top field organizer, Jeremy Bird.
Speaking exclusively with FoxNews.com, Cruz expressed outrage over the mounting indications the Obama administration could be implicated in efforts to meddle in the Israeli election.
“This is manifesting itself right now in President Obama’s national field director helping run the campaign to defeat Prime Minister Netanyahu in Israel in coordination with a nonprofit group that has received hundreds of thousands of dollars from the American taxpayer,” he said.

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U.S. Sen. Ted Cruz, (R-Texas), believes the nonprofit campaigned against Netanyahu after taking US taxpayer-funded grants. (AP)

Highlighting how Obama had refused to meet with Netanyahu when the Israeli leader addressed Congress on problems his government sees with administration-backed efforts to reach a nuclear weapons inspection deal with Iran, Cruz added:
“What does it say about the President of the United States when he’s more concerned about undermining and attacking the prime minister of Israel than he is standing up to the mortal threat a nuclear Iran poses?”
Launched in 2002 by snack bar mogul Daniel Lubetzky, OneVoice says it works towards achieving a two-state solution to the Palestinian-Israeli conflict, and believes – in a reflection of Obama’s thinking, but counter to Netanyahu’s – that Israel’s 1967 borders should form a starting point for negotiations between Israel and the Palestinians.
Against this backdrop, the State Department awarded OneVoice the $350,000 in grant money in 2013, slotting more than $233,000 in staggered payments for OneVoice’s Israel branch, and earmarking the rest in staggered payments for OneVoice Palestine.
The State Department says the money for OneVoice Israel was to help pay for the group’s campaigning in support of talks between the Israelis and Palestinians following the attempt by Kerry to see the peace process restarted. But while those talks collapsed in April 2014, the State Department said in its response to the Cruz-Zeldin letter that its funding continued through Aug. 18 of that year.
This fact has raised additional concern, a senior Congressional aide within the Republican Party told FoxNews.com.
“No one is objecting to private American citizens participating in political activity,” said the aide, in reference to Obama’s former field director and others who are helping guide V15. “At issue here is the possibility taxpayer funds in the form of the State Department grants were used for overtly political activity, especially in the period when the ostensible purpose of the grant — to promote Secretary Kerry’s proposed solution to the Israeli-Palestinian issue — no longer existed.”
Concerning the registering of OneVoice’s PeaceWorks Action, Inc. under a part of the tax code that permits limited political activity, the aide added: “The establishment of the 501(c)4 post-facto doesn’t really clear this issue up.”
The registering of PeaceWorks Action, Inc. is likely to be among activities a bipartisan probe by the Senate Permanent Subcommittee on Investigations will look at as it explores the wider issue of possible Obama-administration ties to the anti-Netanyahu campaign.
FoxNews.com, citing a source with knowledge of the panel’s activities, on Saturday revealed the existence of the probe.
The Senate subcommittee, which has subpoena power, is the Homeland Security and Governmental Affairs’ chief investigative body with jurisdiction over all branches of government operations and compliance with laws.
It would also be expected to look into the State Department’s oversight of the grant monies slotted for OneVoice.
As a guest on Fox News Channel’s The Kelly File, State Department spokeswoman Jen Psaki told show host Megyn Kelly last month that the grant money given to OneVoice Israel had been vetted, saying “there's reporting that is required to be done about every dollar and cent of money that's spent of US taxpayer dollars.”
However, the State Department’s response to the Cruz-Zeldin letter is not as emphatic about any post-grant review. “In accordance with standard practice, the department reviewed OneVoice Israel’s implementation plan and approved all proposed US Government-funded activities,” the letter, also dated in February, says.
The letter additionally mentions that a portion of the almost $116,000 slotted for OneVoice Palestine had yet to be dispatched.
“There is a remaining payment of approximately $10,000 to OneVoice’s Palestinian branch, which will not be delivered until a review of the final program report is complete and will only cover activities performed during the agreement period, September 2013 to November 2014,” the letter says.