Comptroller Report: Netanyahu Residence Wasted Public Funds on Unnecessary Expenses

Joseph Shapira believes there is enough evidence to consider a criminal investigation, a spokesman for the watchdog says.

Reuters

The prime minister's residences indulged in exorbitant cleaning, makeup and electrician expenses from 2009 to 2013 under Prime Minister Benjamin Netanyahu, State Comptroller Joseph Shapira said Tuesday in a long-awaited report.

According to the document, cleaning expenses at the Netanyahus' official and private residences doubled from 532,00 shekels ($138,00) in 2009 to 1.1 million shekels in 2011 at the official residence alone. That second number shrank to 945,000 shekels in 2012.

“In light of the large cleaning costs, the PMO should examine ... their prudence and act to avoid unnecessary expenditures," Shapira writes.

The comptroller believes there is enough evidence to consider a criminal investigation, a spokesman for the comptroller's office told Haaretz. Evidence on work by a certain electrician, Avi Fahima, has been sent to the attorney general's office after consultations with the state prosecution, the spokesman said.

According to the report, cleaning expenses at Netanyahu's private residence in Caesarea averaged 8,166 shekels per month — a sum also funded by taxpayers, "even though Mr. Netanyahu and his family spent most of the year at the official residence,” Shapira writes.

The report also found that employees at the Prime Minister's Office were sometimes forced to pay out of their own pockets for Netanyahu's personal expenses — and were not reimbursed.

“The meaning of a failure to pay back these invoices from petty cash is that PMO employees absorb the cost of private expenditures of the prime minister or his family,” the comptroller writes. “When a PMO employee is forced to pay from his own pocket for an expenditure by the prime minister, this is improper administration, and it makes no difference whether the sum is large or small.”

Shapira had said earlier this month he had transferred material on the issue to Attorney General Yehuda Weinstein amid a "concern of compromised integrity or possible criminal activity."

Maintenance of Netanyahu’s private residence cost taxpayers 330,000 shekels in 2010, a number that dropped to 165,000 shekels by 2013, according to the report.

“The State Comptroller’s Office approves of the decline in expenditures at the residences in 2013," Shapira writes. "But we can expect a publicly elected official, as senior as he may be, to show more public sensitivity and ensure he behaves during each year of his term based on the basic principles of proper public conduct."

According to Shapira, such an official should "serve as an example of economizing when it comes to public funds.” He says the budget of the Prime Minister's Residence must be based on a detailed analysis of needs — something not the case at the moment.

Food and entertaining

For its part, the Prime Minister's Office said the Knesset was the only body that could limit spending at the residences. Likud officials added that in any case, many of the report's recommendations were implemented before the document was written, and Netanyahu has instructed his people to carry out the rest of the advice.

According to the report, spending on food and entertaining at the prime minister’s official residence in Jerusalem more than doubled between 2009 and 2011. This includes meals from restaurants or hotels and supermarket groceries.

Such spending surged from 211,000 shekels in 2009 to 490,000 shekels before easing to 458,000 shekels in 2012 and 226,000 in 2013. According to the comptroller, the decline in 2013 was in part a reaction to media reports on alleged profligacy at the Prime Minister’s Residence.

There is no official ceiling on food purchases at the residence, including the ordering in of food if no cook is on duty. There is no ceiling on the number of meals that can be ordered per day or month, only on the sum per meal per person, 250 shekels, and the number of people, 20.

In 2010, the Netanyahus' spent 70,000 shekels on meals ordered to the official residence, a number that rose to 92,000 shekels in 2011 and 158,000 shekels in 2012. In 2013, amid the negative publicity, the figure declined to 64,000 shekels, the comptroller says.

Taking the numbers from 2010 to 2013 into consideration, the comptroller says “the expenditures on provisions for the prime minister, his family and his guests at the official residence ... did not accord with the basic principles of proportionality, prudence, thrift and efficiency.”

The clothing budget, which includes purchases of clothing, makeup and hairstyling, is 54,000 shekels a year — a sum that was insufficient for the Netanyahus, Shapira says.

He says that when Netanyahu became prime minister for a second time in 2009, his legal adviser Shlomit Barnea-Fargo and accountant split the makeup costs into two separate budgets, which increased spending on makeup and hairstyling by 2.5 times the allowed sum. Shapira calls this an indirect way of increasing the budget without the approval of the Knesset Finance Committee.

One section of the report concerns the electrician Avi Fahima, a member of the Likud Central Committee. Fahima is reportedly close to the Netanyahus, whom he hosted in 2010 for the Moroccan-Jewish holiday Mimouna that falls on the day after Passover.

According to the report, Netanyahu's wife Sara invited Fahima to do electrical work at the private residence in Caesarea, especially on weekends, when rates are higher. Shapira says that for nearly every weekend over three months, Fahima was summoned to do electrical work, including on Yom Kippur.

On weekdays, electrical work at the private residence is done by employees of the Prime Minister’s Office. But the Netanyahus allegedly asked the PMO to contact an electrician to do work after hours, including on weekends, when PMO employees are unavailable.

'Misleading' hiring of an electrician

A special committee at the Prime Minister's Office — including Barnea-Fargo and the PMO accountant — allegedly approved the request on condition that the work was urgent and could not be postponed to a weekday. The committee also stipulated that the work would not be done by Fahima.

The Prime Minister's Office thus issued a tender to choose an electrician for the private residence. The cheapest offer was rejected after it turned out that Fahima was a senior foreman at the company. The second-cheapest offer was chosen; the winning firm then hired Fahima as its subcontractor.

Thus Fahima was contracted to work at the private residence based on “a misleading presentation," Shapira writes, adding that 10,500 shekels was spent from September to November 2009, about 70 percent of the annual sum for electrical work during off hours at the private residence.

Shapira says an inspection team could not perform an inspection after it turned out that “the work was ordered by the prime minister’s wife or her secretaries,” people who are "not subject to auditing.” Thus “it was impossible to examine the necessity and urgency of the work, and to ensure that it was urgent work that could not be done on a weekday by PMO employees."

According to the report, there was also no way to consider whether the work was done "because everything was decided between the electrician and the prime minister’s wife and her secretaries.”

Netanyahu, for his part, said he and his wife have not lived in their Caesarea home on Yom Kippur in recent years; they have stayed at the official residence in Jerusalem. According to talking points sent to Likud MKs before the publication of the report, Netanyahu said he did not contract Fahima to make repairs at his home.

According to the talking points, Fahima and another repairman regularly worked at the Caesarea house even before the Netanyahus bought it and simply continued to work there under the new owners. People close to Netanyahu said Fahima was hired despite the fact that he was a Likud activist, not because of it.

“You can’t discriminate against a person and not employ him simply because he’s a Likud member,” a Likud source said.

According to the talking points, many of the report's recommendations were implemented before the document was written, and Netanyahu has instructed his people to carry out the rest of the recommendations.

He said the report did not include a comparison to any other official residence in Israel, adding that spending at an official residence is in no way similar to that at a private home. He said expenditures at the President’s Residence were 10 times those at the Prime Minister’s Residence.

According to the talking points, the increased spending happened when the residence was managed by Meni Naftali, "an embittered former employee who is leading a slander and mudslinging campaign against the prime minister in order to take money illegally from the state coffers and harm the prime minister and Likud during an election period."

The points also blame the media for allegedly using the expenses issue to bring down the Likud government and divert attention from "who will protect Israel amid the tremendous security threats and international pressure — Benjamin Netanyahu or Tzipi Livni and Isaac Herzog?"omptroller Joseph Shapira said Tuesday in a long-awaited report.

According to the report, cleaning expenses at the Netanyahus' official and private residences doubled from 532,00 shekels ($138,00) in 2009 to 1.1 million shekels in 2011 at the official residence alone. That second number shrank to 945,000 shekels in 2012.

“In light of the large cleaning costs, the PMO should examine ... their prudence and act to avoid unnecessary expenditures," Shapira writes.

Cleaning expenses at Netanyahu's private residence in Caesarea averaged 8,166 shekels per month — a sum also funded by taxpayers, "even though Mr. Netanyahu and his family spent most of the year at the official residence,” Shapira writes.

The report also found that employees at the Prime Minister's Office were sometimes forced to pay out of their own pockets for Netanyahu's personal expenditures — and were not reimbursed.

“The meaning of a failure to pay back these invoices from petty cash is that PMO employees absorb the cost of private expenditures of the prime minister or his family,” the comptroller writes.

“When a PMO employee is forced to pay from his own pocket for an expenditure by the prime minister, this is improper administration and it makes no difference whether the sum is large or small.” 

Shapira said earlier this month he had transferred material on the issue to Attorney General Yehuda Weinstein amid a "concern of compromised integrity or possible criminal activity."

Maintenance of Netanyahu’s private residence cost taxpayers 330,000 shekels in 2010, a number that declined to 165,000 shekels by 2013, according to the report.

“The State Comptroller’s Office approves of the decline in expenditures at the residences in 2013," Shapira writes. "But we can expect a publicly elected official, as senior as he may be, to show more public sensitivity and ensure he behaves during each year of his term based on the basic principles of proper public conduct."

According to Shapira, such an official should "serve as an example of economizing when it comes to public funds.” He says the budget of the Prime Minister's Residence must be based on a detailed analysis of needs — something not the case at the moment.

For its part, the Prime Minister's Office said the Knesset is the only body that can limit spending at the residences.