Last-minute campaign funding deal challenged before Knesset’s planned dispersal

Labor, Yisrael Beytenu oppose Likud bid to raise public funding by NIS 30m, so issue goes to oversight panel; talks ongoing on aspects of dissolving Knesset Wednesday for elections

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

Prime Minister Naftali Bennett leads a cabinet meeting at the Prime Minister's Office in Jerusalem on June 26, 2022. At left is Foreign Minister Yair Lapid (Yoav Dudkevitch/POOL)
Prime Minister Naftali Bennett leads a cabinet meeting at the Prime Minister's Office in Jerusalem on June 26, 2022. At left is Foreign Minister Yair Lapid (Yoav Dudkevitch/POOL)

As the Knesset prepares to send Israel to its fifth election since 2019, some coalition parties are opposing an eleventh-hour compromise that would add NIS 30 million from the state coffers to fund election campaigns, and the proposal will now move to an external oversight committee for evaluation.

Both Labor and Yisrael Beytenu came out against the funding increase and instructed their members to vote against it if it made it to the plenum, according to party sources.

Rather than be discussed as part of the Knesset’s disbandment, the funding increase will now be evaluated by the Public Committee on Party Financing — an independent oversight panel — and considered for a vote separate from the dispersal legislation. Committee chair Ayala Procaccia said she would finish the committee’s assessment by Wednesday at noon.

The funding increase bid is being pushed by the Likud party, which in the past has overspent its elections funds. In Israel, campaigns are primarily financed by public monies, and private donations are capped.

In addition to increasing the funding, the bill also proposed to extend parties’ loan repayment period from 36 to 52 months. These sections do not fall under the Public Committee’s purview and do not need to wait for its input.

Submitted late on Monday evening, the funding increase bill came up within 48 hours of the expected timeline for the Knesset to disband itself. On Monday, House Committee chair Nir Orbach – who has been controlling aspects of the disbandment timeline – said that the legislation for the Knesset’s dispersal is expected to pass its final readings by Wednesday at midnight.

Likud MK David Bitan attends a Knesset Arrangements Committee meeting on June 23, 2021. (Yonatan Sindel/Flash90)

In the interim, the coalition and opposition are negotiating to pass a slew of bills – including the campaign funding increase – before the Knesset disbands.

Likud MK David Bitan defended his party’s request for more funding, citing the election-heavy last few years.

“We are facing difficulties after four elections,” Bitan said on Tuesday at the House Committee, which is holding an ongoing discussion on the funding proposal.

As the largest party in the Knesset with 30 seats, but also one of the few that holds primaries, Bitan said that Likud has an additional financial each election cycle.

“We have additional expenses related to democracy, like primaries. We have to spend NIS 10 million just on that,” Bitan told the committee.

But Labor and Yisrael Beytenu, both considerably smaller parties currently sitting at seven seats each, are opposing the increase.

“I oppose raising party funding. This progress should be stopped immediately,” said Labor faction chair Ram Shefa at Monday’s House Committee meeting.

Shefa further called on the committee to separate the campaign financing bill from the bill to disperse the Knesset to which the Likud is trying to attach it, so as to “allow a reasonable time to discuss” the financing increase.

Parties’ campaigns are financed through “funding units,” awarded by a committee based upon the number of seats won in the last election plus the number of seats ultimately won in the current round, plus one unit. The NIS 30 million funding increase would bump each funding unit from its current NIS 1.4 million to NIS 1.66 million.

Finance Minister Avigdor Liberman speaks during a faction meeting at the Knesset on June 27, 2022 (Olivier Fitoussi/Flash90)

Elections are projected to cost NIS 2.4 billion, according to Finance Minister Avigdor Liberman. This sum includes both direct costs and indirect economic losses caused by Israel’s policy of declaring election day a national holiday.

Earlier in Tuesday’s House Committee meeting, Procaccia was called in to testify as to the propriety of the proposal. She said approving the funding increase so quickly would “circumvent” her Knesset-mandated oversight committee, noting that she had only received the bill late last night.

“What emerges from this legislative proposal is actually an attempt to circumvent the public committee,” said Procaccia, explaining that “the Knesset saw fit to appoint an external body to oversee the work of the Knesset, so that it would ensure that the public interest would not be harmed.”

“The Knesset is not respecting a law that it itself enacted, and this process will arouse justified public criticism. I understand the constraints of the parties, but it is possible to wait a few days for the public committee to discuss the issue very quickly on the basis of due process,” she said.

Procaccia also added that under the quick timetable, her committee was unable to “hear data and hear opinions and receive information from the research department.”

Now that the funding bill has been separated from Likud MK Yoav Kish’s dispersal bill – one of the 11 versions currently circulating – the House Committee has to decide if it can nonetheless be voted upon with the rest of the dispersal bills on Wednesday.

The legislation to disperse the Knesset for new elections, which passed a first reading in the early hours of Tuesday, now has to pass its second and third readings, with the third reading requiring the backing of an absolute majority of MKs — at least 61.

If passed, the Knesset immediately dissolves for elections set for October 25 or November 1; the opposition and coalition are still negotiating the date.

Foreign Minister Yair Lapid will automatically replace Prime Minister Naftali Bennett as premier, with Bennett shifting to alternate prime minister. Lapid’s ascension will be immediate because he was sworn in as a potential future prime minister last June, when Bennett took office.

The final date for elections is among outstanding matters still being negotiated between the coalition and opposition. The opposition is pushing for October 25, with the belief that a date close to the Jewish holidays and before many religious schools return to study will give a boost to its electoral showing. The coalition is pushing for November 1, hoping to deny the opposition that boost and to give caretake prime minister Lapid more time in office to show achievements.

The plenum was expected to convene later on Tuesday to pass a number of bills agreed upon by the coalition and opposition, including grants to small businesses affected by the Omicron-variant coronavirus wave and a bill to recognize bereaved military siblings.

One key bill currently held in limbo is a measure necessary to advance Israel’s progress toward joining the United States Visa Waiver Program. The Likud-led opposition is said to be holding the bill hostage in exchange for a coalition  concession on the election date.

A source close to faction leader MK Yariv Levin confirmed to The Times of Israel that the US has sent messages asking Likud to enable passage the bill, but that it is still not part of the agreed-upon slate.

Interior Minister Ayelet Shaked’s office said that US Ambassador Tom Nides called her on Monday to request it be passed, and that her office is trying to help.

Lazar Berman contributed to this report.

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