State Comptroller's Report Reveals Excessive Expenditures by Israeli MKs

Likud funded lavish NIS 418 per person dinner at Netanyahu's residence; Yisrael Beiteinu funded visits to Italy to the tune of NIS 19,000, State Comptroller Joseph Shapira finds.

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More than a few Knesset members who came to the annual Rosh Hashanah toast last month at the Prime Minister’s Residence may have been a bit disappointed by the light refreshments served, in stark contrast to the three-course meal they’d had the year before.

There was a reason for the change. Behind the scaled-down celebrations was none other than State Comptroller Joseph Shapira, who had scathingly criticized Likud for the excessive expenditure the previous year, when it funded a meal for coalition members to the tune of NIS 50,212, or NIS 418 for each of the 120 invited guests.

This emerged in a report released by the comptroller on Monday, in which he reviews the 2011 accounts of the factions in the 18th Knesset and the financial management of the candidates for the Kadima chairmanship in the party’s most recent primary in March of this year. In addition to presenting his findings, the comptroller used the report to issue a warning to the various parties planning to contend in the upcoming elections, and pointed out targets of planned future audits.

The report shows that current Kadima chairman Shaul Mofaz did not handle his accounts in accordance with the law and the state comptroller’s guidelines during his campaign for the Kadima chairmanship. The comptroller did not accuse Mofaz of deliberate malfeasance, but demanded that he pay the state treasury NIS 28,000.

Rival candidates Tzipi Livni and Avi Dichter were both found to be in compliance and did not exceed the expenses or donations that each had been allotted.

Three parties were fined high sums for not complying with the Party Funding Law: Eretz Yisrael Shelanu (NIS 40,000), the National Religious Party (NIS 80,000) and Balad (NIS 80,000).

According to the report, the NRP had not properly recorded all its expenses and its accounts did not reflect the full scope of its financial activities. Balad recorded election-related activities in a manner that could not be confirmed as complete and accurate. Eretz Yisrael Shelanu did not properly record all its expenses, was not careful about saving documentation for publications and advertising as required and did not maintain a conferences file.

Moreover, neither Balad nor the NRP had transferred their accounts payables and receivables for the most recent local and national elections to their current account systems by a year after the elections, as required, and had not closed the bank accounts that had been opened specifically for those elections.

The Party Funding Law, which also governs the funds paid to the parties for their activities, recognizes two types of party expenses. One type is the party’s ongoing expenses for organizing its activities, for propaganda, and for maintaining logistical and ideological contact with the public.

The other type is election-related expenses, which are defined as the faction’s special expenses during election campaigns, particularly during Knesset election campaigns. Separate government allocations are made to parties for their ongoing activities and for their election campaign activities.

Most of the factions have serious deficits carried over from previous election campaigns. On the other hand, all the parties, except for one, had not spent their entire regular expense budgets, and thus had surpluses that in some cases were used to reduce the deficits.

The comptroller also wondered why the parties felt the need to spend significant sums on communicating with communities abroad.

Shapira found, for example, that the right-wing nationalist Hatikva party, spent $10,000 for public relations abroad, as well as NIS 100,000 for printing and sending some 7,300 brochures abroad. Yisrael Beiteinu funded mutual visits and the signing of a cooperation agreement with the Northern League Party in Italy to the tune of NIS 19,000, while the United Arab List-Ta’al spent some NIS 11,000 on foreign trips by officials.

“I have no choice but to reiterate to the parties that they must act thriftily and with restraint regarding the resources the state has put at their disposal and must use these resources in compliance with the provisions of the law and its purpose,” the comptroller wrote.

He also noted that from now on, he would relate to a party’s headquarters and its staff “as a body linked to the faction for the purposes of the [Party] Funding Law. From this determination it follows that all the income and expenses of party headquarters will be considered as income and expenses of the faction, with all that entails."

“Similarly, all the restrictions on a faction  under the Funding Law will apply to the headquarters, and its accounts will be subject to audit by the state comptroller. However, if I receive evidence that there have been changes in the characteristics of headquarters activities as described, I will reevaluate the issue in accordance with the circumstances at the time and the documentation submitted to me,” Shapira wrote.

Netanyahu takes part in a Rosh Hashanah toast at the Likud headquarters in Tel Aviv.Credit: Tomer Appelbaum