Facing strong opposition, coalition puts off bill to let PM keep gifted money

Government planned to hold first reading Sunday on bill slammed as ‘opening door’ to corruption; U-turn comes after Haredi MKs criticized optics, opposition threatened filibuster

Carrie Keller-Lynn is a former political and legal correspondent for The Times of Israel

Prime Minister Benjamin Netanyahu leads his cabinet meeting, at the Prime Minister's Office in Jerusalem, March 19, 2023. (Marc Israel Sellem/Pool)
Prime Minister Benjamin Netanyahu leads his cabinet meeting, at the Prime Minister's Office in Jerusalem, March 19, 2023. (Marc Israel Sellem/Pool)

The coalition on Wednesday postponed work on a bill that would allow public servants to keep money gifted to them for the purpose of covering medical and legal fees, following a filibuster threat from the opposition as well as reports of heavy pressure from coalition lawmakers.

The bill, widely slammed by critics as legislation tailored to Prime Minister Benjamin Netanyahu’s personal needs and decried by the Attorney General’s Office as “opening the door to corruption in the entire public service,” will not come up for an initial vote as planned on Sunday and will be pushed off until the next Knesset session, which begins April 30.

Sponsored by the premier’s Likud party, the bill would help Netanyahu retain a $270,000 gift he received from his late cousin to finance legal expenses in his ongoing trial. The High Court of Justice had ruled the gift improper and ordered Netanyahu to return the money to his cousin’s estate, which Netanyahu has yet to do.

It would also let Netanyahu tap NIS 4 million ($1.1 million) raised last year as part of a crowdfunding effort to pay his legal fees. The account has been frozen, pending a legal opinion that Netanyahu can use the money.

In addition, the bill would allow hundreds of thousands of Israeli public servants and their families to receive financial gifts and would complicate oversight over potential corruption. As a senior official in the Justice Ministry testified to a Knesset committee on Sunday, the bill enables a mechanism “that can be misused to disguise criminal offenses.”

While advocated by Likud as helpful to public servants and their families who need financial support, Justice Ministry officials and the opposition have slammed the bill as a gateway to corruption, and raised suspicions that it is geared to “personally” benefit Netanyahu.

Likud MK Ofir Katz, who runs the committee preparing the legislation for votes, had scheduled a Thursday morning vote to advance the bill for its first reading on the Knesset floor on Sunday.

But coalition MKs, particularly from the ultra-Orthodox parties, reportedly demanded that the divisive bill not be advanced at this time, fearing a backlash and arguing that the move does not jibe with the government’s recent message of reconciliation as dialogue is held with the opposition on the highly contentious judicial overhaul plan.

Members of the United Torah Judaism and Shas parties, as well as other parties, were cited by Hebrew media as saying bringing the gifts bill to a vote “looks bad,” and pointing out that Shas leader Aryeh Deri had agreed to delay a separate bill aimed at personally benefiting him, which would allow him to be appointed minister despite a recent High Court disqualification.

Yair Lapid, Benny Gantz, Merav Michaeli and Avigdor Liberman meet in Jerusalem on March 13, 2023 to coordinate opposition strategy to judicial overhaul. (Yesh Atid)

Additionally, opposition leader Yair Lapid and the heads of other opposition parties issued a joint statement Wednesday afternoon criticizing the coalition for forcing a special legislative session on Sunday, the last possible day before the upcoming Passover holiday, and threatening to disrupt it.

“It is not enough that the plenum does not meet on the week of Passover, except in exceptional cases, [but now] MKs are supposed to vote on a bill that could corrupt the entire public sector,” the statement said.

It said the opposition would refuse to engage in a common pairing-off practice, whereby MKs from either side of the aisle mutually agree to skip a vote when one of their opposing number is unavoidably absent. The opposition also threatened to filibuster a bill planned for the same day — sought by the Haredi parties — on improving safety for the upcoming heavily attended religious pilgrimage event at Mount Meron, rather than pass it smoothly by agreement as planned.

“We stress that we will not let this go, and that the corrupt gifts bill will face massive opposition from all opposition factions. We suggest that the coalition reconsider the matter and prevent raising the gifts bill,” the Yesh Atid leader warned.

Shortly after the opposition’s threat was issued, Hebrew media said the gifts bill was being shelved for the time being.

Prime Minister Benjamin Netanyahu (center) speaks with Education Minister Yoav Kisch in the Knesset, March 22, 2023. (Yonatan Sindel/Flash90)

This past Sunday, Oren Fono, a senior official in the Justice Ministry’s Legal Counsel and Legislative Affairs Department, told the Knesset’s House Committee that permitting donations could cause “situations in which a public servant will receive favors because he is a public servant and will create dependence between public servants and their donors.”

This “opens the door to corruption in the entire public service,” warned the representative for the attorney general.

Fono also pointed out that public servants may already accept such gifts from friends and family, provided that they do not take them in their capacities as public servants.

Knesset legal adviser Sagit Afik echoed these concerns, saying the proposal is “liable to create an inherent conflict of interest for Knesset members” and despite recent changes, “still constitutes a deviation from maintaining integrity.”

She added that the bill may lead to the crumbling of “the fortified wall” behind which the legislature cordons off threats to public trust.

Tying the bill to Netanyahu’s desire to retain his $270,000 gift for legal expenses amid his ongoing trial on graft charges, Fono further added that “the speed with which the bill is being advanced raises concerns that it is intended to benefit the prime minister personally.”

File: Nathan Milikowsky in 2013, in San Francisco (Drew Altizer Photography)

Netanyahu’s cousin Nathan Milikowsky gave the Netanyahus $300,000 from 2017 to 2018, and was later paid back $30,000. He died in July 2021 at the age of 78.

In 2021, the High Court of Justice ordered Netanyahu to return the funds to Milikowsky’s estate, after ruling they were an improper gift. Netanyahu has been ordered to return the sum by the end of April 2023.

Last year, pundit and former MK Yinon Magal, a leading host on the pro-Netanyahu Channel 14, collected around NIS 4 million in a crowdfunding campaign for Netanyahu’s legal fees, while the premier deliberated whether to accept a plea agreement to close his graft trials. Netanyahu ultimately rejected the deal, but was barred from tapping the funds.

Last Wednesday, Magal told Hebrew-language Radio 103FM that “the money is waiting for the decision on this law, the gifts law.”

“The law is that you are allowed to receive money for the benefit of, what is it called, a legal event. So it exactly fits in this case,” he said.

Justices also ruled last year that a NIS 2 million ($566,000) loan Netanyahu received from real estate mogul Spencer Partrich was a forbidden gift, but could be repaid according to their agreement, with supervision from the state comptroller, since the loan had been approved by the comptroller and attorney general.

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