To read the full report (Hebrew) click here
In March 2015, Israel’s Attorney General recommended that the state stop funding the Settlement Division – a section of the World Zionist Organization that effectively controls construction throughout Israel and the West Bank. This came after severe mismanagement in the division was exposed. The Attorney General’s position was recently reinforced by a scathing report issued by the State Comptroller, who found corruption in the division.
Members of Knesset from HaBayit HaYehudi (the hawkish Jewish Home Party) leaped to the defense of the division – unsurprisingly, given that it serves as a conduit for transferring public funds to West Bank settlements and party cronies. MK Bezalel Smotrich even proposed a bill that would override the Attorney General’s directives and essentially maintain the status quo. The bill, ensuring limited transparency only, passed in late December 2015. Smotrich stressed that it would merely legalize the status that the division has held since before Israel was founded.1 In fact, the new law allows the division’s managers to continue practicing cronyism and discriminatory funding.
After Molad’s 2014 exposé, the Settlement Division became the subject of a public storm.2 Although the division is financed entirely by the taxpayer, its management has systematically refused to disclose how its budget is allocated. Members of Knesset, journalists, members of the Zionist Executive and civil society organizations have all inquired in vain as to why the division’s budget grows several times over every year, where the money goes, and how its beneficiaries are chosen. Despite repeated promises by the division’s management, a single pertinent answer is yet to be received.
Shielded by lack of transparency and no supervision, severe misconduct such as discriminatory funding and corruption has developed in the Settlement Division. A government resolution from 2004 formally obliges the division to work to strengthen the Negev and the Galilee (the southern and northern rural areas of Israel, respectively) and to distribute funding equally.3 Indeed, the division has consistently claimed that it distributes funding equally between all areas in Israel.4 However, according to Finance Ministry data exposed by Molad in Israel’s leading daily Yedioth Ahronoth, in the first half of 2014 the division channeled at least 75 percent of its funding of local authorities to settlements in the West Bank.5 It also financed dozens of non-profits and activist centers closely affiliated with the Jewish Home Party, some of which even serve as local extensions of the party and operate in wealthy neighborhoods such as Ramat Aviv Gimel. This sharply contradicts the government resolutions concerning funding of such centers, which stipulated that they must operate in underprivileged areas. The data (in Hebrew), now available on the Accountant General’s website, reveal that although intended to assist underprivileged communities, the Settlement Division has become a secret settler slush fund.
The investigative report at hand shows how, far from the public eye, the division’s budget for direct funding almost doubled in the second half of 2014. Before Operation Protective Edge in Gaza in July-August 2014, this budget amounted to 432 million shekels; after the operation, it shot up to 806 million. More than a year after the operation in Gaza, its impact on the division’s priorities in 2014 can now be examined. It appears that despite the financial crisis in southern Israel, the division continued to primarily support settlements and even increased this support.
2 Molad, “Secret Settler Slush Fund”, 4 Sept. 2014, http://tinyurl.com/hbsvgxu.
3 For the directive that the Settlement Division operate in the Negev and Galilee, too, see Government Resolution 2701 (GN/4) of 16 Feb. 2004 and the division’s website: goo.gl/ZMnsH3 (in Hebrew); regarding equal distribution of division funds, see Government Resolution 601 of 19 July 2009: “The Division’s work plan will be based on objective and equal criteria, emphasizing communities in need in all sectors”, goo.gl/Cfrju1 (in Hebrew).
4 Former Division Chairman Danny Kritchman went so far as to claim on a Channel 10 TV program tailored specifically to promote the division that it “works primarily with underprivileged areas within Israel”. See the Hebrew-language show on Channel 10, 28 Feb. 2013, here: goo.gl/R3mwk9.
5 “Har Hevron: 1,418 NIS, Hof Ashkelon: 12 NIS”, Nahum Barnea, Yedioth Ahronoth weekend supplement, 5 Sept. 2014, tinyurl.com/kxufrgu (in Hebrew).
6 For a breakdown of direct funding by the Settlement Division in 2014 taken from the Accountant General’s website, see: tinyurl.com/okyd6s9 (in Hebrew). See, also, “The Knesset Finance Committee’s Leaky Pipeline”, Zvi Zrahiya, Ha’aretz, 9 Feb. 2015, http://tinyurl.com/ps59o55.
7 See statement of purpose regarding funding of social activity on the division’s website: tinyurl.com/oemu32z (in Hebrew).
8 “Urban Branch of Settlement Division to be Closed”, Nimrod Bousso, Ha’aretz, 5 Feb. 2015, http://tinyurl.com/qztkxfa (in Hebrew).
9 For financial engagements with Mahut in 2013 and 2015 see here: tinyurl.com/zvrogzv and here: tinyurl.com/p7372z7. Adv. Noam Weiss is one of the non-profit’s founders: tinyurl.com/zewssa3 and also a member of the constitution committee in the Jewish Home Party: goo.gl/WjYYI2 (in Hebrew).
10 “The Yisrael Beiteinu Affair: 30 Million NIS Transferred to Ayalim – Two Months Before Chair Arrested”, Lior Dattel & Yasmin Gueta, Ha’aretz, 25 Dec. 2014, goo.gl/Fizjtl (in Hebrew).
11 “Deputy Attorney General: Settlement Division Activity Under Examination”, Gur Megiddo, Globes, 13 Jan. 2015, tinyurl.com/p7fln73 (in Hebrew); “Israel Police to Charge Dozens of Yisrael Beiteinu Officials for Fraud”, Yaniv Kubovich, Ha’aretz, 21 Oct. 2015, http://tinyurl.com/nltnxpc.
12 For the relevant financial engagements, see here tinyurl.com/ojnbg35 and here tinyurl.com/zn4cjm3. For the show, see Channel 10, 28 Feb. 2013, goo.gl/R3mwk9.