31.01.2014 video Molad
Channel 2 News Expose    

Yeshagate: The big secret of the settler councils

An expose of the secret deal that pumps Israeli taxpayer money to the political campaigns of the private NGO of the settlement enterprise, the Yesha Council

The day after almost half a million Israelis took to the streets demanding social justice in the summer of 2011, the settlement of Efrat’s local council decided to funnel Israeli taxpayer money to the settlement enterprise’s private NGO, the Yesha Council, for right-wing political campaigns. It appears that it was not the only settlement council to do so. Almost four years later, settler councils in the West Bank have become mere channels by which tens of millions of taxpayer shekels are transferred from the government to the Yesha Council.

The findings presented here are part of an in-depth research project by Molad into the channeling of Israeli taxpayer money to the settlement enterprise.

In Brief:

  • Over the past four years, the Israeli government has allocated 36-40 million shekels (roughly USD 10-12 million) annually to settlement councils in the West Bank, under the guise of “building freeze security grant". Thus far these grants have come to a total of NIS 148 million (roughly USD 43 million) over four years.
  • Officially, the grants are meant to compensate the councils for the loss of property taxes due to the 2009 settlement buildling freeze. The precise criteria for receiving the grants are not publicly available, but are known to include a security component.
  • Our evidence indicates that most of the grants do not go to the local settler councils, i.e. do not compensate for the gap in incoming taxes caused by the freeze or assist security. Instead, these generous sums of taxpayer money are being used to fund political campaigning by a private entity — the Yesha Council. These local councils function as mere pipelines for the funds. At the time the decision was made, the Yesha Council was headed by none other than current Minister of Economics, Naftali Bennett.
  • In return for their services, the local settler councils are permitted to keep some 20 percent of the grants — in essence, a commission for their cooperation in channeling taxpayer money from the government to a private entity. Councils that refuse to cooperate with this exploit are apparently threatened with denial of the grants.
  • Once it arrives at the Yesha Council, this taxpayer money goes to their political propaganda. This transfer of funds would appear to be illegal. In 2006, Israel's High Court of Justice ruled that settlement councils may only transfer to the Yesha Council funds that are collected from settlement residents themselves, e.g. property tax.
  • The whole affair took place against the backdrop of the massive social protest in the summer of 2011. This is yet another example of the destructive consequences of the influence settlers and their representatives have gained.

Political implications

  • Last Friday, Channel 2, Israel’s leading network, aired Molad’s findings on its primetime news show [see subtitled video above or click here]. In real-time response, a series of senior Israeli politicians led by opposition leader Yitzhak Herzog and Minister of Justice Tzipi Livni called for an investigation into the findings. MK Stav Shaffir sent a harsh letter to the state comptroller and to the attorney general demanding “an investigation into all parties involved in the shadow network that serves to transfer public funds to aggressive interest groups [i.e. the Yesha Council], from the heads of local settlement councils to then-Finance Minister Yuval Shteinitz.”
  • Less than twenty-four hours later, Finance Minister Yair Lapid announced that he is ordering a halt to all money transfers to the settlements pending further examination of the matter.

Molad will continue to follow this story as it develops.

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