Nonprofit organizations rejected the US Congress Judiciary Committee's claims that the 2023 judicial reform protests were funded by then-US president Joe Biden's administration, after a new memo released last Friday disputed allegations of direct funding, leading the committee to rest its arguments on the fungibility of money.

The May 29 memo detailed the findings of an inquiry into whether US government grants had been funneled to fund the reform protests, based on 1,256 documents procured by nine organizations, an additional 876 documents reviewed since the first July 17 memo on the matter.

The Judiciary Committee asserted that its conclusions found the Biden administration directly and indirectly contributed to bankrolling the protests, but the new memo indicated that funding previously provided to the organizations had no connection to the reform demonstrations.

The Committee had previously argued that the NGO Blue and White Future (BWF), which backed protest headquarters Hofshi B’Artzenu, may have been a "downstream recipient" of US grants.

Rockefeller Philanthropy Advisors (RPA), which received more than $50 million from USAID and the State Department between 2021 and 2024, supposedly gave $187,000 to PEF Israel Endowment Funds. PEF then reportedly gave BWF $18 million.

RPA's affiliate organization Rockefeller Brothers Fund (RBF) was revealed by the Committee in the new memo to have provided $70,000 to the New Israel Fund (NIF) for projects that funded the initial judicial reform protests. RBF had received $557,000 from its partner from 2021 to 2024.

Yet RPA documents provided to the Committee indicated that the government grants funded RPA and RBF projects in those years that had no direct relation to Israel. The $187,000 given to PEF and $70,000 to NIF were apparently not sourced from government grants.

The Committee instead argued that government funding for RBF and RPA allowed them to divert funds to other causes, including the judicial reform protests.

"As the Committee has explained previously, the fungibility of money - the ability to easily replace one set of funds with another set of funds of equal value," read the memo. "When an NGO receives government funding for a project, the new funding stream allows the entity to use the money previously earmarked for that project on something else that it would have otherwise not been able to fund."

In July, the Committee had also scrutinized the Movement for Quality Government in Israel (MQG), which received $42,000 in federal grants between 2020 and 2022, before the reform. The Committee argued that the MQG grant had been used for a civic activism training program at three Jerusalem schools, which supposedly encouraged students to protest the Israeli government.

The MQG told The Jerusalem Post that the funds were approved during US President Donald Trump's first term, not during the Biden administration, and were used for activities in the governments of former prime ministers Naftali Bennett and Yair Lapid.

"The entire claim that they were used for protest activities is false and fundamentally unfounded, and does not stand the test of reality," said a MQG spokesperson. "We did not receive a single dollar from the Biden administration to finance the demonstrations, as initially claimed - and the committee team also did not find any support for the false claims made against the movement."

MQG said that it operated with full transparency, and would make the information available to any party that requested, but the Committee asserted that the NGO had failed to cooperate since the July memo. The Committee said that it sought additional documents related to PEF, BWF, and other judicial reform protest organizations. The Committee said that PEF provided $93,000 to the Jewish Communal Fund (JCF), which included $3,000 earmarked for MQG. Further, JCF supposedly gave $115,000 to PEF for MQG.

While JCF was not alleged in the memo to have funneled US government funds to reform protests, the Committee charged that it, PEF, and RPA could be violating tax-exempt status because they were funding "radical anti-Israel groups" seeking to change laws in a foreign country. PEF supposedly provided $525,000 to Women Wage Peace, $30,000 for Standing Together, and $462,000 to Darkenu, using funds granted by JCF.

The organization told the Post that it respects congressional oversight and remains committed to transparency and legal compliance.

"PEF is a charitable philanthropic vehicle through which American donors support a broad range of charitable, educational, social service, humanitarian, health, community, and public benefit organizations in Israel. Through this work, PEF helps connect Americans to Israel's social fabric and supports initiatives that contribute to the well-being and resilience of Israeli society. Our work is, and has always been, charitable - not political," said the organization. "PEF provides charitable support only to organizations that are duly established and recognized under Israeli law and that satisfy the applicable legal and compliance requirements governing our grantmaking. Our processes are designed to ensure that funds are distributed in accordance with applicable US and Israeli legal standards."

The Committee also reviewed the Abraham Initiatives, which the House body said had received over $2 million for two projects during the time it supposedly was involved with reform protests. However, according to the memo, the grants were for education and policing reform, the latter of which was supported from 2018 to 2021.

The Abraham Initiative rejected what it described as a "political" report, explaining to the Post that it has "never been and still is not involved in organizing or carrying out the [judicial reform] protest."

The committee had also alleged that the education project could have run afoul of anti-terrorism procedures because it operated in the West Bank and Gaza, but the Abraham Initiatives said the project had only ever operated within the Green Line.

"The organization has never operated, and has never spent any money, on activities in Gaza or the West Bank," said the Abraham Initiatives. "The project was carried out with the full cooperation of the Ministry of Education and local authorities and was reported in detail to the funding bodies, including the American government. It should be emphasized that Abraham Initiatives has never received any comment regarding non-compliance with procedures or goals."

Previous reviews of judicial reform funding and organization, including Post reports cited in the memo, have indicated that foreign and local funding, much of it crowdsourced, supported the judicial reform.

Kaplan Force had claimed that most of its funding during the reform period, amounting to millions of shekels, was achieved through local crowdsourcing. Darkenu had fundraised NIS 178,792 through an online fundraiser to back its petition against the reasonableness standard law. In 2023, about half of BWF's NIS 134 million budget came from foreign sources, and the other half from within Israel. Its subsidiary, Hofshi B’Artzenu, raised almost NIS 27,500,000 online by August 2023 through almost 60,000 backers. NIF gave almost $2 million to groups involved in the protests, with Standing Together using $20,000 for a major initial protest.