Shas chief Deri was aware state funds were going to party newspaper — report

AG probing Shas Minister Haim Biton after money meant for party-linked educational network allegedly used to pay salaries at Shas mouthpiece HaDerech

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"

Shas party leader MK Aryeh Deri in the Knesset, Jerusalem, March 13, 2024. (Yonatan Sindel/Flash90)
Shas party leader MK Aryeh Deri in the Knesset, Jerusalem, March 13, 2024. (Yonatan Sindel/Flash90)

Shas chairman Aryeh Deri was aware that state funds were being funneled to his ultra-Orthodox party’s HaDerech newspaper from a party-affiliated school network, in a potential breach of the law, the Kan public broadcaster reported on Sunday.

A February 2022 letter published by the network — which was sent only weeks after Deri received a suspended sentence from the Jerusalem Magistrate’s Court on tax fraud charges — appeared to show that Deri he had been informed of allegations that money going to the party mouthpiece had come from public funds.

Subsequent text messages from Deri published by Kan appeared to show him stating that he had checked into the matter and was unsure of the proper course of action to take.

A Shas spokesman did not respond to a request for comment from The Times of Israel.

Last week, Kan reported that Attorney General Gali Baharav-Miara had opened an investigation into Shas lawmaker Haim Biton, a minister within the Education Ministry, and others associated with the newspaper.

According to Hebrew media reports, state funding meant to go to Shas’s Maayan Hachinuch Hatorani school network was allegedly funneled to HaDerech via various backdoor methods during Biton’s tenure as head of the network. The newspaper allegedly used this taxpayer money to pay editorial and journalistic salaries.

Minister within the Education Ministry Haim Biton arrives for the weekly cabinet meeting at the Prime Minister’s Office in Jerusalem on January 22, 2023. (Olivier Fitoussi/FLASH90)

In a statement last week, the Movement for Quality Government in Israel, an advocacy group that has pushed for a probe into the matter, welcomed the investigation.

There “is serious suspicion of the use of public funds for political purposes,” which can cause “serious harm to public trust,” the watchdog group stated, pledging to “continue to closely monitor the development of the investigation.”

Deri has been involved in multiple financial scandals over the course of his long political career.

In 2022, he received a suspended sentence after pleading guilty to tax offenses as part of an agreement with prosecutors that also saw him resign from the Knesset.

The plea deal included admitting to five income tax offenses and one of land tax violation.

Deri had previously served 22 months in prison from 2000 to 2002, after he was convicted of taking bribes while serving as interior minister. In 2013, he returned to politics, reclaiming the leadership of Shas and ultimately returning to serve as interior minister from 2016 until 2021, when his party entered the opposition.

After returning to power following the fall of the Bennett-Lapid government in 2022, Prime Minister Benjamin Netanyahu attempted to reappoint Deri to this position but was blocked by the High Court, which ruled that the veteran ultra-Orthodox politician’s appointment as interior and health minister was “unreasonable in the extreme” due to his criminal convictions.

Then-former leader of the Shas party Aryeh Deri on his way to Ma’asiyahu prison on September 3, 2000, after being convicted of taking $155,000 in bribes while serving as interior minister. Deri was given a three-year jail sentence, but was ultimately released after 22 months for good behavior. (Flash90)

In the 10-to-1 ruling, the court accepted the opinion of Attorney General Baharav-Miara that Deri’s appointment did not pass a test for “reasonability” that courts can use to gauge government decisions.

The petitions against Deri’s appointment, brought by the Movement for Quality Government, the Movement for Ethical Behavior and a group of private individuals, argued that his 2022 conviction on tax fraud charges, as well as his conviction in 1999 on bribery charges, made him unfit to serve as a minister.

Last April, the Haaretz daily reported that tens of thousands of shekels in deposits had been made monthly into an account shared by Deri and his daughter and son-in-law over the course of 2022.

Deri’s son-in-law said that the payments were rent from apartments in south Tel Aviv.

Responding to Haaretz, an aide to Deri called the story “biased and manipulative,” and said that it had “no basis whatsoever.”

Jeremy Sharon and Times of Israel staff contributed to this report.

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