Battle over Jewish National Fund money pits Likud against Jewish Home

As ministers advance bill to force JNF to pay much of its earnings to the state, faction leaders squabble over MK who plans to resist his own coalition

The ruling Likud party and a key coalition partner are fighting over the government’s decision to shift some NIS 2 billion (some $570 million) from the Jewish National Fund to state coffers.

In a cabinet vote Tuesday morning, ministers gave their okay to advancing legislation that would force JNF to transfer 80 percent of its earnings to the state or lose its tax immunity.

The legislation is backed by Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon.

But the legislation has several influential opponents, including Likud’s own Welfare Minister Haim Katz, Agriculture Minister Uri Ariel of the Jewish Home party, and MK Bezalel Smotrich, also of Jewish Home, who serves on the Knesset’s Finance Committee, where much of the wrangling over the bill is set to take place.

“The [de facto] nationalization of JNF goes against the interests of the state of Israel and of the Jewish people,” Ariel said in a statement Tuesday. “The state should pursue a dialogue with JNF to reach an agreement over the next few weeks on the [scale of the] financial transfers from JNF to the state.”

In order to help ensure the bill’s passage despite the opposition, coalition chairman MK David Bitan (Likud) demanded on Tuesday that Jewish Home replace Smotrich as its representative on the Finance Committee with a lawmaker who does not oppose the initiative.

Bitan, known for his aggressive style, demanded that the switch be carried out “within the hour.”

Smotrich, Bitan said, was “creating obstacles for the coalition.”

But his demand fell on deaf ears.

Jewish Home faction leader MK Shuli Moalem-Refaeli quickly issued her own statement refusing his demand.

“The Jewish Home faction will decide who will represent it in [Knesset] committees,” she said in the statement. “We also decide for ourselves which issues we support, and which we do not. I have no intention of removing Bezalel from his position on the Finance Committee.”

The JNF is a nonprofit quasi-governmental organization formed in 1901 that focuses on land reclamation, reforestation, and development of periphery communities.

In January State Comptroller Joseph Shapira published a report that slammed the JNF as a bloated organization with little transparency that may have mishandled funds and acted out of conflicts of interest.

The bombshell report, the first ever on the JNF by the state comptroller, focused much of its attention on alleged conflicts of interest and lack of oversight at the organization’s operational branch, the Land Development Administration.

The organization, the report found, over a period of 15 months between August 2014 and October 2015 spent just a third of its revenue on public projects to develop land while “43 percent [of some NIS 3.5 billion] were used to expand its own financial assets.”

The report said that it was the recommendation of the comptroller that “given the severe… discrepancies that surfaced with regard to the way [the Land Development Administration] operates, there is an urgent need to expand government oversight into the [JNF’s] other operations.”

At the time opposition lawmaker MK Micky Levi (Yesh Atid) proposed a law to increase transparency at JNF. Levi said he saw forcing the JNF to increase its transparency as a first step toward its nationalization.