Analysis

It's Time for Israel to Shut Down the Jewish National Fund

The Israeli government's use of JNF as a surrogate money pot for political purposes opens the door to corruption and improper use of the Jewish people's money

The JNF has been facilitating corruption for years, including funding junkets by politicians and allocating money in unkosher ways.
Eliyahu Hershkovitz

An eye-popping string of developments have characterized the Israeli government's relationship with the Jewish National Fund in a recent political battle for the organization's assets. The JNF, known in Hebrew as Keren Kayemeth LeIsrael, was founded in 1901 to acquire and develop land in Israel on behalf of the Jewish people and currently owns 13 percent of the country's land.

Under strain to fund its budget for the next two years, the Israeli government has been coveting JNF's money. That money, according to the JNF's mission, belongs to the Jewish people in trust. In any event, the state has always done what it pleases with the JNF, making appointments in the organization and using its cash reserve for purposes as they arise. 

In October, Prime Minister Benjamin Netanyahu sent his bureau chief Yoav Horowitz and the director general of the Finance Ministry, Shai Babad, to the JNF board to extract money, claiming “secret strategic needs,” but that didn’t work. Then came the stage of extortion by threat; Babad and Horowitz told the organization that if it doesn't hand over the money, we will push through a law that forces you to do so, or we’ll cancel your tax exemption.

That rattled JNF Chairman Danny Atar a bit, and he agreed to hand over 2 billion shekels ($570 million), one billion this year and another billion next. But the JNF board balked, feeling they were being made suckers. The board scrapped the agreement and decided to give the state just a billion shekels rather than two.

But what about the second billion? Frustrated, the state resorted to more intimidation. According to the Walla news website, coalition whip David Bitan said behind closed doors on Tuesday that if the government can’t get the money from the JNF, the coalition could collapse.

That threat was directed at Knesset members who oppose squeezing the JNF and taking its money. Such lawmakers prefer that JNF stay a strong, wealthy operational entity faithful to its original purpose – serving as an entity involved in land and the settlement of it by Jews alone.

On Tuesday, the cabinet held a special session to lend its support to a bill that would force the JNF to fork over at least 80 percent of its revenues each year to the state budget. If JNF fails to do so, the state would revoke its tax exemption.

The JNF owns of 2.3 million dunams (nearly 600,000 acres) of Israel's land, 13 percent of all of the land in the country. (The rest is owned by the state and privately). JNF land is managed through a public agency, the Israel Land Authority, and when the ILA sells land owned by the JNF, it transfers revenues to the JNF.

Israeli land and property prices have risen mightily in recent years, making the JNF quite wealthy and whetting the state’s appetite for its money. The JNF is resisting the state’s plans and even hopes to enlist the help of the “Jewish people” to foil them. On Thursday, the leaders of the World Zionist Organization will be holding an emergency meeting to discuss the government’s plans.

What has enabled the state to squeeze the JNF is the fact that over many years, the JNF has essentially been the state’s long arm to do all sorts of things, and acts as a source of political appointments. Although purportedly an independent entity with defined purposes relating to land and settling the land on behalf of the Jewish people, its activities are coordinated with the government. In practice, the organization administers and sells land exclusively to Jews, something the state would have difficulty doing itself.

That’s one of the reasons why the government prefers to grab most of JNF revenues, but not to nationalize all its assets or void its status as an entity dealing only with Jews.

The present imbroglio is a good reminder that there’s no point in perpetuating such a tactic. Taking 80 percent of the JNF’s revenues through a tax is virtually tantamount to nationalization. Rather than continuing to twist its arm, the government might as well take state control of the JNF. Using the JNF as a surrogate money pot for political purposes opens the door to corruption and to improper use of the Jewish people’s money. It also creates a rotten organizational culture at the JNF, which earned it vilification by the state comptroller.

The JNF has been facilitating corruption for years, including funding junkets by politicians and allocating money in unkosher ways. It is time to end all this by nationalizing this anachronistic organization and dismantiling it. The Zionist cause can continue without it.