AG freezes all coalition funds, deeming them budgetary source for war efforts

At hearing of Knesset Finance Committee, chair Moshe Gafni says he cannot authorize any transfer of coalition monies to war effort without request from Finance Minister Smotrich

Attorney-General Gali Baharav-Miara arrives to casts her ballot for the head of the Israel Bar Association at a voting station in Tel Aviv on June 20, 2023. (Miriam Alster/Flash90)
Attorney-General Gali Baharav-Miara arrives to casts her ballot for the head of the Israel Bar Association at a voting station in Tel Aviv on June 20, 2023. (Miriam Alster/Flash90)

Attorney General Gali Baharav-Miara decided on Tuesday to freeze all coalition funds — monies earmarked for political promises — deeming them budgetary sources meant to fund war expenses during the ongoing conflict with Hamas.

Baharav-Miara’s deputy for economic law, Meir Levin, wrote in response to a query that any use of money promised to certain parties as part of political agreements for anything other than the war-related efforts would require a specific cabinet resolution that will be subject to judicial review on its necessity.

Earlier this week, a cabinet vote on transfering NIS 300 million to Haredi schools was nixed after Minister Benny Gantz declared that he would not allow any such budgetary transfers that were not related to the war effort.

When Gantz joined the emergency war government last month, he said it was contingent on a freeze of all non-war related or non-emergency legislation, vowing that his membership in the coalition was temporary to deal exclusively with the war effort.

In late October, the cabinet formally redirected all non-transferred coalition funds to be diverted toward the war effort. Coalition funds are monies doled out to fulfill political promises made during wrangling to form a coalition government, and among them this time was a NIS 300 million ($77 million) uncompleted transfer to boost funding to cash-strapped, private ultra-Orthodox schools.

However neither the Finance Ministry, under far-right minister Bezalel Smotrich, nor the Knesset Finance Committee have made moves to return what the Movement for Quality Government cited as NIS 6.65 billion ($1.7 billion) in frozen funds back to the Treasury’s general reserve, so they can be reallocated.

Finance Minister Bezalel Smotrich attends a press conference in Jerusalem on October 19, 2023. (Noam Revkin Fenton/Flash90)

The Finance Committee, chaired by United Torah Judaism MK Moshe Gafni, is the body which approves such transfers, after it receives a request from the Finance Ministry.

During a Tuesday hearing in the committee, Gafni turned to National Unity party MK Orit Farkash-Hacohen and noted that she had publicly complained “that I did not transfer funds for the evacuees and for the war efforts.” Gafni stated in response that “the finance minister requested that I not transfer it, so I cannot do so.”

The Finance Ministry has declined MK and reporter requests to confirm the exact amount that is available in the pool, leading opposition MK Vladimir Beliak to call the number a “state secret” during the committee discussion on Tuesday.

At the meeting, a Treasury representative told MKs that the state had enough funds to meet current war needs, and claimed that coalition funds were already going toward education needs in hotels filled with evacuees, temporary residences for the displaced, payments to tireless ZAKA volunteers who have collected bodies and human remains, and other war-related needs.

“Whoever is demanding a freeze in all coalition funds, is calling for a freeze in all the things I just mentioned,” said Omer Rahamim, an adviser in the Finance Ministry representing Smotrich at the hearing.

A representative for Smotrich said on Sunday that “over NIS 5 billion have been transferred to [address] civilian war needs and soon all the changes required in the budget will be brought to the government and the Knesset as one legislative package.”

None of these funds included frozen coalition funds, confirmed a source close to the matter.

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