Could it be that Israel's political parties are squandering your hard-earned money on fripperies? State Comptroller Micha Lindenstrauss, for one, thinks so. "I see the wasteful use the party factions are making of public funding they receive to finance their election campaigns," he wrote in a report on party spending for the 18th Knesset elections.
He says they should be doubly meticulous in choosing how to spend that money. They aren't, to put it one way. "The parties' unreasonable expenditures attest to profligacy that we should not have to put up with," the comptroller concluded.
The parties receive state funding for the sake of the democratic process, Lindenstrauss explained. It helps achieve equality between the contenders and helps preserve integrity. But not only are the parties insulting the taxpayer by spending your tax shekels on fripperies, it's actually illegal, the former judge clarifies.
Not settling for generalities, he listed a number of outlays that he deemed "unreasonable." Remember, this is funding for "election campaigns," but it turns out that several parties interpreted that phrase quite liberally.
But before diving into the pool, let's see how its depth is calculated.
All parties contending in an election are entitled to state funding. This is how the math is done.
The amount is based on the number of Knesset members the party had in the outgoing parliament, and the number voted into the incoming Knesset. These numbers are averaged, and one extra MK is added to that average.
The party then gets NIS 1.25 million times that number.
For instance, say the party had eight Knesset members in the outgoing Knesset, and won 11 seats in the elections. Then it gets 8+11 divided by 2, which is 9.5, plus 1, which equals 10.5.
That figure is multiplied by NIS 1.25 million, which means the party would get NIS 13.125 million.
Note however that if the party had 20 seats in the outgoing parliament, and wins only 10, the math works out to 20+10=15 plus 1, so even though it only has 10 members in the new Knesset, it gets financing for 16.
The parties are thus ensured handsome funding even if voters choose to diminish their power.
When is the money forthcoming, since the final amount depends on the election outcome? The parties get a certain sum up front - 60% of what they'd get were they to receive the same number of seats in the new Knesset. For instance, if they had 10 seats in the outgoing Knesset, the party gets money up front worth 6 Knesset members. The final reckoning follows the election.
What happens if a party is running for the first time, ergo, it has no members in the outgoing Knesset? Before the election, it is entitled to NIS 3.75 million up front, though it has to present a bank guarantee. That is because if the party fails to pass the threshold and doesn't make it into the Knesset, it has to give the money back, and there have been cases in history where parties proved reluctant to do so.
Now for the meat. Literally. Among its receipts for election expenses, Yisrael Beiteinu had NIS 118,000 in bills for foreign travel by its chairman, Avigdor Lieberman, who is now Israel's foreign minister. Yisrael Beiteinu explained to the state comptroller that the trips were essential for maintaining contact with potential voters and overseas Jewish organizations.
Yisrael Beiteinu also reported heavy outlays on conferences. For instance, the party spent NIS 212,000 on its convention to kick off the campaign. A secondary election convention cost it NIS 187,000, the party reported. The party argued that it had to spend that much so that the conventions would be distinguished, and would suit its unique representative status.
The party commented that it was glad that as usual in the last ten years, the state comptroller report referred positively to Yisrael Beiteinu and found it had "no irregularities."
Then there's the Balad party, which during the campaign period spent NIS 175,000 on gasoline. The comptroller staff did some math and found the money would have bought it 33,000 liters of 95-octane gasoline, which would have been enough to drive 300,000 kilometers.
The circumference of Planet Earth, between the poles, is roughly 40,000 kilometers. Balad failed to provide a sensible explanation for its extraordinary fuel consumption. Lindenstrauss opined that this expense did not fall into the category of "reasonable."
The Labor Party, led by Ehud Barak, bought three 37-inch televisions for a total of NIS 14,726, which it claimed to need for the elections. After the elections, Labor sold the TVs to party insiders at half-price.
In 2008 Agudat Yisrael spent NIS 200,000 of its election funding on food that it gave to the poor ahead of the holidays. During Operation Cast Lead in 2009, when southern Israel was being peppered by missiles, the party bought chickens to distribute to the needy in the region - right before local and national elections.
The Gil - Pensioners Party contributed NIS 25,000 of its election financing to an association that helps Holocaust survivors. It also reported allocating NIS 500 for haircuts and dental hygiene. That is not a big sum, to be sure, but one has to ask why the party is spending any public money on hairdos and teeth.
Moving on to the surreal, Balad reported paying for a newspaper advertisement stating academic studies were starting in Jordan.
Lindenstrauss also discovered that certain parties were promising bonuses to campaign managers based on the party's election success, in other words, more money than stipulated in the contract. Labor, for example, agreed to pay its campaign manager Mordi Omer NIS 462,000 for his services - plus NIS 57,750 more for each Knesset seat beyond the first 12. (The party, which won 13 seats, wound up giving him a NIS 57,750 bonus.)
Yisrael Beiteinu hired campaign strategist Arthur Finkelstein for $150,000, plus a bonus for each seat beyond the first 12. All in all it paid him a NIS 653,000 bonus. Also, Yisrael Beiteinu hired a media consultant for $90,000 in base pay, plus $10,000 to double that as a bonus for seats beyond the first 12. The consultancy got a NIS 336,000 bonus.
Not content with lavishing public money on chickens and consultants, the parties also lent it out, Lindenstrauss discovered. In at least some of the cases, they didn't get it back, either. For instance, one party listed loans to nonprofit associations under "doubtful debt." Another party simply wrote off several loans entirely. As Lindenstrauss put it, a loan that one doesn't get back is otherwise known as a gift.
Not quite scot-free
The parties didn't get away with it scot-free. Lindenstrauss fined five of them. Kadima was fined NIS 693,000 after exceeding its budget for local election campaigns by NIS 5.7 million. He also said Kadima neglected to record all its spending, and didn't have invoices for all its costs. In short, its bookkeeping was lax.
The Pensioners Party was fined NIS 106,000 for exceeding its budget by NIS 320,000. The Moledet party overspent by approximately that sum, too, which won it a NIS 41,000 fine. (The numbers are all rounded.) Efi Eitam's party Ahi exceeded its budget by NIS 97,000 and was fined NIS 2,800.
Meanwhile, all the Knesset factions are in debt, other than Degel Hatorah. Some are up to their necks in it. Labor's debts amounted to NIS 240 million, as of February 28, 2009. The main reason, wrote Lindenstrauss, is that the parties aren't budgeted enough money ahead of elections, or to put it otherwise - they all spend more than they're given. Nor do they adhere to their budgets or take care to balance spending with income, he wrote. There can also be big differences between expectations and actual election results.
The controllers inside the party have difficulty withstanding pressure from the party leaders, who insist on spending more than approved budgets, Lindenstrauss added. It all boils down to an absence of personal or even group accountability. And to make the cheese all the more binding, it turns out that the parties are borrowing from Bank Hapoalim, too. Which, in turn, means that their future lies in the hands of Hapoalim.
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