The Jewish National Fund has acted as it pleases for years with little if any government oversight, State Comptroller Joseph Shapira said, adding that people at the agency may have broken the law.
In the comptroller’s first-ever report into the JNF, Shapira referred to the attorney general two instances of funding that raise suspicions of criminal behavior at the organization, known in Hebrew as Keren Kayemeth LeIsrael.
In one case the JNF used offices at Ariel Sharon Park near Tel Aviv, allegedly in return for transferring funds to the park. The other case involved funding allegedly provided to the Shenkar School of Engineering and Design.
The comptroller was particularly critical of Efi Stenzler, who was JNF world chairman from 2006 to 2015, and his cochairman, Eli Aflalo, who served between 2012 and 2015.
The JNF was founded in 1901 to buy land in prestate Israel with money donated by Jews around the world. It later also assumed responsibility for preparing land for Jewish settlement.
In 1961 an accord was signed to create the Israel Land Authority, which coordinated management of the land. Also created was the Land Development Administration, which became the executive arm of the JNF’s core operations.
The accord called for the government to appoint a minister overseeing the agreement, but according to the comptroller, the government never appointed such an official. A joint state-JNF commission was established to oversee the Land Development Administration, but that body has not convened since the 1970s.
“Since the commission has not been meeting in recent decades, the JNF has been setting its own policy,” Shapira said in the report. “Israeli governments neglected their rights and public duties as stated in the accord to influence, via the commission, the JNF’s priorities for developing Israeli lands, most of which are owned by the state.”
The JNF’s gross income from its land came to 10.5 billion shekels ($2.8 billion) between 2008 and 2014. Eight percent of that came from donations, but the bulk, around 8 billion shekels, came from managing the land it owns.
“But during those years, the JNF used only around a third of its income, 3.5 billion shekels, to carry out its public duties in the realm of land development and forestation,” Shapira said.
“In contrast, some 43 percent of its income during those years (4.5 billion shekels) was used by the JNF to boost its financial assets,” the comptroller said, adding that the JNF did this “without doing any staff work to determine the necessity of this accrual or to determine whether at least some of the money could be used to advance its main public purpose, redeeming barren land.”
Lacking government oversight, the JNF administration felt free to refuse to cooperate with the agriculture, tourism and defense ministries on projects, Shapira said, adding that this was felt most painfully at the Negev and Galilee Development Ministry.
The JNF board had determined that two-thirds of the development administration’s operating budget should be spent in the Negev and the Galilee, but there is no way to know if that’s what happened because no one was auditing or overseeing spending, Shapira said. Decision-making at the JNF was also problematic, he said.
“The few officials who were political appointees, four members of the previous administration, particularly the former chairman and cochairman, were essentially the ones who decided which projects the JNF would fund and implement, and under what conditions through what was called the Supreme Projects Committee,” Shapira said.
According to the comptroller, “these decisions were not made based on known, clear criteria, because no such criteria were ever set, and there was no orderly comparison of alternatives. No minutes of the committee meetings were kept, so it is difficult to know who in the previous administration was actually making the decisions.”
Shapira also questioned moves including the reversal of decisions for no apparent reason, the diversion of budgets among various projects, and the alleged inequitable consideration of projects with no explanation.
Also hundreds of millions of shekels have been committed without budgetary approval, Shapira said, before elaborating on problems he found with several specific JNF projects.
Stenzler, for his part, said the JNF isn’t a government company and isn’t subject to an audit by the state comptroller. “Three years ago I opened the JNF’s doors to the comptroller and for three years the comptroller’s staff examined some 800 JNF projects totaling around a billion shekels,” Stenzler wrote.
“If at the end of this important audit the comptroller saw fit to comment about such a small number of projects, five projects of the 800 I find myself proud of this audit.”
The JNF added: “Although the report relates to 2012-2014 before the current administration took over the JNF accepts the report in full. Moreover, the JNF administration did not wait for the report’s publication, and since receiving the draft report it has been working diligently to fix the problems. Far-reaching changes have been made in the organizational culture to improve transparency, control and oversight.”
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