State watchdog: Jewish Home minister transferred millions to benefit his cronies

A state comptroller report released on Tuesday accused Jewish Home minister Uri Ariel of transferring millions of shekels, earmarked for poor towns in Israel’s rural areas, to nonprofit organizations run by his political confidants during his tenure as housing minister.

The report urged Attorney General Avichai Mandelblit to probe the case.

According to State Comptroller Yosef Shapira, in 2013-2014, Ariel surrounded himself with the leaders of various housing organizations and lobbyists who, while not employed by the ministry, were repeatedly misrepresented on ministry documents as official representatives.

Those figures were actively involved in revising a government development plan for their own benefit to apply to all of Israel, rather than solely to poorer areas as was originally intended, the report said. Ministry employees were not included in the reformulation of the plan, known as Resolution 741, it said.

At their prodding, Ariel budgeted millions of shekels to middle- to upper-class areas in Tel Aviv and its suburbs, where the nonprofit organizations were situated, the report said.

Although the plan broadly sought to develop rural areas, Ariel oversaw the transfer of NIS 29 million ($8 million), some 46 percent of the budget, to middle- or upper-class areas in central Israel, the report said. Of that sum, some NIS 10.5 million were earmarked for areas classified as of “high” socioeconomic status.

“Then-housing minister Uri Ariel, who had personal relationships with the political associates and his advisers at the time, is responsible for the failures that were raised. The decision by the Housing Ministry and the Settlement Division to fund… groups whose members live in, and are active in, neighborhoods with a high socioeconomic status in central Israel, some of which don’t even qualify for Resolution 741, requires an examination by the attorney general,” the report said.

According to the report, Shapira rejected Ariel’s claim that he was unaware of the lobbyists’ misbehavior and thus didn’t bear responsibility for their actions.

“The lack of knowledge, as claimed by the minister, about his behavior about his confidants and interested parties linked to them does not absolve him from responsibility for this failure in governance and in managing the office to which he was appointed,” he wrote.

Hours after the report was published, Ariel released a statement denying Shapira called for a criminal investigation into his actions.

“The comptroller did not recommend opening a probe by the attorney general into the actions of the minister,” he said, adding that he “respects the findings of the comptroller and has already instructed the relevant authorities to act according to his recommendations.”

Ariel in his statement did not deny the allegations against him.