Murky Deal Turned Jerusalem Immigrant Absorption Center Into Prime Real-estate

Government lawyers tell court that transfer of land to Jewish Agency fund involved doctored documents and other irregularities.

Jewish Agency's Mevasseret Zion immigrant absorption center
Emil Salman

An immigrant absorption center in a Jerusalem suburb was gifted to a pension fund for Jewish Agency employees in a shady, mistake-ridden process that is only now being sorted out.

For decades, the Mevasseret Zion complex operated by the Jewish Agency was the first home in Israel for tens of thousands of new immigrants.

Government lawyers related the course of events this week, after the Movement for Quality Government in Israel petitioned the High Court of Justice seeking protocols involved in the transfer. Acknowledging the problem, the state government said it would redo the deed transfer process.

A short drive from the capital, with easy access to the Jerusalem-Tel Aviv highway, the lot the absorption center stands on is a prime piece of real estate worth hundreds of millions of shekels.

“Public land was transferred to private parties secretly and in violation of all the rules of proper governance, and possibly illegally,” said Tomer Naor, a lawyer with the good-government organization that filed the petition.

MK Yoel Razvozov (Yesh Atid) was the chairman of the Knesset Committee for Immigration, Absorption and Diaspora Affairs when the affair came to light, and filed a police complaint over it. He was even more critical than Naor.

“The strange coincidence leaves no room for doubt — it was very profitable for someone for these ‘errors’ to occur and to earn hundreds of millions of shekels of profits from them,” Razvozov said.

The Israel Lands Administration, the government agency that administers state-owned land, allotted the land to the Jewish Agency in the 1970s to use as an absorption center. Years later, the ILA sold 51 dunams (13 acres) of the parcel to the Jewish Agency, which quietly transferred it to its pension fund to pay a debt. The move only came to public attention when a tender to sell the land was published in 2014.

Some 1,300 immigrants from Ethiopia live in the center’s 224 apartments. Six months ago they were threatened with eviction, when the pension fund moved to sell the land by tender for at least 250 million shekels ($64.7 million). There were no bids and the sale was frozen pending the outcome of the petition.

The state lawyers said the lot was transferred to the pension fund in a protracted process beginning in 1995 that was characterized by secrecy, glaring administrative errors and missing and altered documents.

The first wrong step was in 1995-96, when the Israel Lands Administration agreed to accept a one-time payment for a 99-year lease on the land from the Jewish Agency, rather than an annual payment.

The agreement spelling out the financial terms omitted two critical words: Instead of designating the land as “housing for immigrants” — that is, for public purposes — the document simply described it as “housing,” rendering it marketable.

The error, which was discovered shortly after the document was signed, instantly increased the value of the land severalfold. The ILA then refused to approve the transfer of the land, which was handed over to the Jewish Agency’s pension fund, to pay for unpaid retirement contributions.

Only in July 2005 did the ILA finally agree to approve the transfer, in exchange for a bigger payment and conditional on the consent of the ILA’s exemptions committee. A month later the ILA told the fund it approved the transfer, but as the government found later, there is no record of the exemptions committee’s consent, the government lawyers said.

The third major error was only discovered last year, when officials failed to find the ILA’s copy of the transfer deed. The pension fund’s copy was found to have “suspicious,” handwritten changes as well as a nonexistent ILA file number.

Citing the problems with the transfer process, the state said it would resubmit the contract to the ILA’s exemptions committee.

“The idea that public land worth hundreds of millions of shekels in the middle of a town was transferred to a private entity because of a small, not to say intentional, ‘writer’s error,’ is beyond understanding,” said Naor.

The ILA confirmed the matter would be brought back to the exemptions committee. The Jewish Agency pension fund declined to comment.