Israeli Government Firms Spend Millions on PR

Finance Ministry investigation finds contracts awarded to politically connected, without any competitive bidding.

Ofer Vaknin

State-owned companies providing public transit services employ lobbyists and advisers at a cost of millions of shekels annually without any competitive bidding, a preliminary investigation by the Finance Ministry’s account general has found.

The advisers almost always have strong ties to politicians and political parties, the probe found.

Among the companies cited was Netivei Israel, the transportation infrastructure company that paid a retainer to Yossi Levy, a former media adviser to Prime Minister Benjamin Netanyahu, Foreign Minster Avigdor Lieberman and the Shas party. The government company paid Levy a retainer of 16,780 shekels a month (approximately $4,250) without opening the contract to competitive bidding.

Netivei Israel also employed Yisrael Bachar to advise the company on polling. Bachar served in the campaign of Moshe Kahlon’s Kulanu Party and had previously advised Netanyahu and Shas leader Ayre Dery.

Bachar was also retained by NTA, the government company supervising public transportation in the greater Tel Aviv area, to conduct surveys and arrange focus groups connected with developing the Tel Aviv light rail project.

The preliminary investigation was launched in January to get a picture of the extent to which state-owned companies employ lobbyists, public relations companies and other advisers to make their case before regulators and the media.

The investigation follows an article in TheMarker exposing the role of political operative Yisrael Yehoshua, who was detained by police in the Yisrael Beiteinu corruption investigation and was advising at least five government companies on government relations. Companies were ordered to break off tries with the advisers until officials completed their investigation.

Netivei Israel retained the Goren-Amir lobbying firm without any competitive bidding for the contract, as did Israel Railways. Each of the two state-owned companies paid the firm between 21,000 shekels and 23,000 shekels a month for its services.

BR, a firm owned and managed by Bruriah Naim, a former community relations manager for NTA and adviser to former Transportation Minster Ephraim Sneh, was retained by three government transportation companies.

Naim worked as a sub-contractor providing community relations services for Yehoshua Mor-Yosef, a former spokesman for the settler umbrella organization the Yesha Council, to promote Netivei Israel activity in the Jerusalem area. She, in turn, employed the political operator Menachem Gasheid, a former aide to United Torah Judaism lawmaker Yaakov Litzman.

Regulations concerning government tenders exempt companies from seeking bids if the company itself has sales in excess of 1 billion shekels a year while the contract being offered is worth less than 600,000 shekels. It also exempts tenders to retain consultants with highly specialized expertise.

The budgets of state-owned infrastructure companies, which run into the billions of shekels annually, are closely monitored by government auditors. But their spending on operations are subject to far less scrutiny, which means management often regards it as unregulated money.