Prime Minister Benjamin Netanyahu on Thursday reportedly ordered the creation of a special task-force to nationalize Keren Kayemeth LeIsrael (the Jewish National Fund), after deciding that it had reneged on a compromise in which the body agreed to transfer the majority of its revenues to the government.
The decision came after Netanyahu learned that KKL-JNF had withdrawn from an agreement reached with the state in which the organization would pay NIS 1.8 billion (some $5.17 million) over two to three years in return for keeping its tax-exempt status, Army Radio reported.
Netanyahu also called for the immediate advancing of a law that would require KKL-JNF to pay 65 percent of its revenues, in return for tax exemption until 2023. The legislation had been shelved after the agreement was struck between the parties last month.
KKL denied backing out of the agreement and slammed Netanyahu’s decision to nationalize the land-owning body. “I view the prime minister’s position to be seriously problematic, stemming from the lies presented to him by (Finance Ministry Director General) Shai Babad,” said KKL deputy director Arnon Feldman.
For his part, Babad said that “personal insults will not return NIS 1.8 billion that was taken from the public.”
“The KKL violated the agreement with the state blatantly three times, and therefore the prime minister decided to advance the legislation,” Babad added.
Last month, KKL said that it would freeze billions of shekels in funding to local authorities and development programs while it assesses the legislation.
Despite being backed by Netanyahu and Kahlon, the bill 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.
Keren Kayemeth LeIsrael owns 13% of all the land in the country and brings in some $3 billion (NIS 10.4 billion) a year, most of it from land sales.
Founded in 1901, it bought land and founded settlements on which Israel was established in 1948. Famed for planting hundreds of millions of trees in Israel, the not-for-profit group also focuses on land reclamation and development of communities outside central Israel.
In January, State Comptroller Joseph Shapira published a report that slammed KKL-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 KKL 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.