Lapid: We'll 'follow the money,' take legal action if needed

Lapid warns civil servants they must oppose ‘laundering’ of state funds for Haredim

Opposition leader announces team to spearhead opposition to 2025 budget and to moves to pay benefits to ultra-Orthodox despite legal restrictions imposed by High Court ruling

Sam Sokol is the Times of Israel's political correspondent. He was previously a reporter for the Jerusalem Post, Jewish Telegraphic Agency and Haaretz. He is the author of "Putin’s Hybrid War and the Jews"

Opposition Leader MK Yair Lapid leads a meeting of his Yesh Atid faction at the Knesset, in Jerusalem, on September 9, 2024. (Yonatan Sindel/Flash90)
Opposition Leader MK Yair Lapid leads a meeting of his Yesh Atid faction at the Knesset, in Jerusalem, on September 9, 2024. (Yonatan Sindel/Flash90)

Gearing up for a major political battle over the 2025 state budget, Opposition Leader Yair Lapid launched a direct threat to civil servants in the finance and other ministries on Monday, calling on them to oppose government efforts to get around legal restrictions on subsidies for the ultra-Orthodox community.

“I say to the officials, to the professional ranks in the Finance Ministry, the Education Ministry, the Interior Ministry: Do not cooperate with attempts to transfer and launder this money in illegal ways, because you will end up in the dock,” Lapid declared.

“We will follow this money and we will not hesitate to file complaints with the police and lawsuits in the courts.”

Addressing lawmakers from his Yesh Atid party at a strategy session in Tel Aviv ahead of the upcoming winter legislative session, Lapid also railed against government efforts to exempt male members of the ultra-Orthodox community from mandatory military service despite a growing shortage of troops and steadily rising IDF death toll.

“I want to see the government of Israel look our wounded in the eye, look the bereaved families in the eye, and tell them that while they were wounded in defense of the homeland, while their children were killed, the prime minister promised the ultra-Orthodox parties to pass a evasion law to make sure that Haredi youths will remain safe in yeshiva,” Lapid said.

“At the same time, Finance Minister [Bezalel] Smotrich assured them that he will find ways to transfer the money to them through underground pipes and indirect ways, so that they can continue to evade [the draft] at our expense.”

In a landmark ruling this summer, the High Court of Justice ruled the government must draft ultra-Orthodox yeshiva students into the military since there is no longer any legal framework to continue the decades-long practice of granting them blanket exemptions from army service.

The ruling also permanently barred the state from funding ultra-Orthodox yeshivas whose students should be in the army, asserting that those funds depended on IDF exemptions that now no longer exist.

Opposition Leader Yair Lapid addresses lawmakers from his Yes Atid party at a meeting in Tel Aviv, October 14, 2024. (Sam Sokol/Times of Israel)

Housing Minister Yitzhak Goldknopf, the head of the coalition’s ultra-Orthodox United Torah Judaism party, reportedly threatened last week to block the passage of the 2025 budget unless a Haredi army exemption bill is passed in the next three weeks. Failure to pass a budget would bring down the government.

In response, Prime Minister Benjamin Netanyahu is said to have promised to advance a bill facilitating sweeping exemptions for Haredi men from military service by the end of the month.

Beyond seeking to pass a new enlistment bill, Netanyahu’s government is also battling budget cuts for the ultra-Orthodox stemming from the legal decision.

This August, Deputy Attorney General Gil Limon informed Labor and Welfare Minister Yoav Ben Tzur that his ministry must halt daycare subsidies for the children of ultra-Orthodox yeshiva students who were previously exempt from military service by November 30.

However, Finance Minister Bezalel Smotrich defied the Attorney General’s Office, informing Limon and Attorney General Gali Baharav-Miara that he was “ordering the continuation of daycare subsidies, per Industry, Trade and Labor Ministry criteria.”

“If you believe my decision is illegal, you’re free to petition the Supreme Court,” he was quoted as writing by the Israel Hayom daily.

Religious Zionism head Bezalel Smotrich (standing) with United Torah Judaism leader Yitzchak Goldknopf at the Knesset on November 21, 2022. (Yonatan Sindel/Flash90)

Addressing his MKs on Monday morning, Lapid accused Smotrich of violating the law on behalf of the Haredim for political benefit.

“Smotrich promised the ultra-Orthodox that he would transfer hundreds of millions of shekels to them from the welfare and education budgets in exchange for their support on the [2025] budget,” he said.

“It’s a bribe. It’s illegal, it’s improper, and it’s designed to make sure they can evade the IDF and continue to receive money.”

The former prime minister announced the formation of a special team, led by Yesh Atid MK Vladimir Beliak, which will lead the party’s opposition to the budget and “follow the money” to ensure that it is not allocated illegally.

MKs Vladimir Beliak, left, and Moshe Tur-Paz at a Knesset Finance Committee meeting in Jerusalem, February 23, 2023. (Yonatan Sindel/Flash90)

Aside from professional staffers, the team will also include MKs Moshe Tur-Paz and Naor Shiri, MK Beliak told The Times of Israel.

Beliak said his team will work to identify methods of transferring money to the ultra-Orthodox as an end-run around legal restrictions, examining all relevant government plans and opposing them in the Knesset Finance Committee — and, if need be, in the courts.

Earlier this month, Smotrich presented an initial state budget framework for 2025 based on a deficit target of up to 4 percent of gross domestic product.

To offset increased military and civil costs of the war, the government will need to implement tough spending cuts and introduce tax changes to increase state income and deal with a fiscal hole in 2025 of an estimated NIS 30 billion ($8 billion) to NIS 40 billion.

The Finance Ministry is said to have plans for a series of tax changes, including the freezing and lifting of benefits for pension savings and advanced study funds, as it seeks to bring down the large budget deficit and finance the ongoing war with the Hamas terror group in Gaza and Hezbollah in Lebanon.

Smotrich has also reportedly proposed closing five government ministries in an effort to save money.

Asked if he believed the government will be able to pass the budget, Beliak replied that even if it passes, the budget will likely fail to pass muster with international credit rating agencies.

Jeremy Sharon and Sharon Wrobel contributed to this report.

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