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Only a third of revenue in period under review went on public projects to develop land

State Comptroller slams bloated JNF, concerns of criminal activity

Government watchdog says organization’s operational arm has little government oversight, may have conflicts of interest

Israelis holding signs of the Jewish National Fund (Keren Kayemeth LeIsrael) take part in a Tu Bishvat tradition of planting trees in the West Bank Jewish settlement of Michmash, Wednesday, January 15, 2014. (Photo by Yossi Zamir/Flash 90)
Israelis holding signs of the Jewish National Fund (Keren Kayemeth LeIsrael) take part in a Tu Bishvat tradition of planting trees in the West Bank Jewish settlement of Michmash, Wednesday, January 15, 2014. (Photo by Yossi Zamir/Flash 90)

State Comptroller Joseph Shapira recommended launching an investigation into suspected criminal activity by the Jewish National Fund, which his report slammed as a bloated organization with little transparency that may have mishandled funds and acted out of conflicts of interest.

Wednesday’s bombshell report, the first ever on the JNF 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.

The organization, the report found, over a period of 15 months between August 2014 and October 2015, spent just a third of its revenue for public projects to develop land while “43 percent [of some NIS 3.5 billion] were used to expand its own financial assets.”

The organization at the time was led by Efi Stenzler, with Eli Aflalo as co-chairman.

Operations under scrutiny

Then co-chairman of the Jewish National Fund Efi Stenzler speaking during the Labor party's annual convention in Tel Aviv on July 17, 2015. (Tomer Neuberg/Flash90)
Then co-chairman of the Jewish National Fund Efi Stenzler speaking during the Labor party’s annual convention in Tel Aviv on July 17, 2015. (Tomer Neuberg/Flash90)

The report singled out two JNF operations it said required investigation.

The first involves funds that may have been improperly provided to the Shenkar School of Engineering and Design in Ramat Gan, to set up an engineering, industry and management program at a cost of NIS 2.2 million. JNF said it would contribute one million shekels through a private donor but subsequent documentation suggested the funds would come directly from JNF.

The report said further inquiries into the incident yielded conflicting information from JNF officials and a possible attempt to tamper with the documents.

The second possible criminal case relates a string of appointments to the organization that may constitute a conflict of interest. One such case involved Zeev Neuman, who as head of the board responsible tasked with fundraising, was involved in carrying out a project in the northern city of Acre, while also serving as the city’s deputy mayor.

The report said that it was the recommendation of Shapira, the comptroller, that “given the severe… discrepancies that surfaced with regard to the way [the Land Development Administration] operates, there is an urgent need to expand government oversight into the [JNF’s] other operations.”

No oversight

Then co-chairman of the Jewish National Fund Eli Aflalo, in the Knesset on May 16, 2012. (Miriam Alster/Flash90)
Then co-chairman of the Jewish National Fund Eli Aflalo, in the Knesset on May 16, 2012. (Miriam Alster/Flash90)

The report also put blame on the government, noting its failure to carry out its oversight responsibilities from its 1961 agreement with the JNF. That was when the JNF’s role of managing land it owned was transferred to the the newly created Israel Land Authority. That allowed the JNF, with the Land Development Administration at the lead, to focus on what the report labeled JNF’s “core task” of developing the land it controls.

As part of the 1961 agreement, a government minister was supposed to be appointed to ensure its implementation, but no minister was ever appointed to the position, the report noted. Furthermore, a joint commission involving the state and JNF that was established as part of the agreement to supervise the Land Development Administration has not convened since the 1970s.

The joint commission is tasked with ensuring that the Land Development Administration’s development plans are in accordance with those of relevant government ministers, including the Agriculture Ministry, Tourism Ministry and Ministry for the Development of the Galilee and Negev.

On Sunday, the Knesset’s Ministerial Committee for Legislation will debate a law proposed by MK Micky Levi (Yesh Atid) to increase transparency at JNF.

In a statement Wednesday, Levi said “the time has come to open the black box in which the JNF operates and uncover the wasteful clauses of its budget.”

Levy also said he saw forcing the JNF to increase its transparency as a first step toward its nationalization.

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