Lapid Calls to Nationalize the Jewish National Fund

After failed battle with quasi-governmental organization as finance minister last year, Lapid promises to take reform a step further in move he says will weed out corruption.

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A JNF tree planting center.
A JNF tree planting center.Credit: Eliyahu Hershkovitz

Yair Lapid, leader of Yesh Atid and former finance minister, vowed on Tuesday to nationalize the Jewish National Fund, the quasi-government agency famous for its blue-and-white charity boxes, which owns some 12 percent of all lands in Israel.

“Over the years, no party has ever dared to fight the JNF and to get back what belongs to the public because they benefited from the corrupt JNF operations, the money and the political appointments. Like we got the money from trapped profits and the black market, we will get back the money and land from the JNF,” Lapid told the news conference in front of the organization’s Tel Aviv headquarters.

While the JNF is best-known for planting trees, its main work is developing infrastructure projects. But it has also been criticized for inefficiency and corruption.

Lapid, whose party, according to polls, stands to lose about half the Knesset mandates it won in the 2013 elections, battled with the JNF during his term as finance minister to take two-thirds of the revenue the organization earns annually from land it controls, and divert it to government-financed infrastructure projects.

The JNF and politicians from Likud and Yisrael Beiteinu fought bitterly to block the plan, which died together with the 2015 budget when the government collapsed in December. The reform was a key reason why Prime Minister Benjamin Netanyahu disbanded the government and called elections.

Yesterday Lapid said he would go further and seek an amendment to the JNF Law, nationalize the entity and turn it into a government-owned company required to operate transparently, and be subject to regulations and monitoring by the State Comptroller.

Nationalizing the JNF, known in Hebrew as Keren Kayemeth Le’Israel, or KKL, would add 1 billion shekels ($260 million) to government revenues, not to mention other billions held by the organization on its books. It would also stop the JNF from providing funds to political parties and appointing politicians’ allies to key jobs.

“The country must belong to the middle class and the poor,” Lapid said, “not to wheelers and dealers who accept political appointments, not to fund-bloated bureaucracies with unlimited budgets, and not to engage in the dark practice of appropriating millions of shekels to political parties and their representatives.”

Under the Lapid plan proposed last year, some 350 million shekels of JNF revenue would have gone to transportation infrastructure, another 250 million to public transportation and 150 million for housing-related spending. Other money would have gone to building schools and other uses.

Despite the failure of Lapid’s reform plan, some progress was made in making the JNF nore accountable. Tzipi Livni – who was justice minster in the last government and is now No. 2 in Zionist Union, a Yesh Atid rival – succeeded in getting the organization defined as a public benefit company, which means it is now subject to auditing and must file annual and quarterly reports to the Justice Ministry.

In addition, the State Comptroller has issued critical reports about how some parts of the JNF operat.

A month ago, the JNF board voted not to renew an agreement going back to 1961 that governs relations between it and the government, and is due to expire July 28. As a result, the JNF is slated to return some 2.5 million dunams (625,000 acres) it owns but has been administered by the government’s Israel Lands Authority.

The land amounts to about 12% of all the land in Israel. In the real estate sector, many fear the move will bring chaos to the property market and snag government efforts to increase the supply of housing.

On Tuesday the JNF lashed out at Lapid, calling him a “the least successful finance minister in the country’s history” and of “grabbing headlines.”

“Lapid is seeking to confiscate in an illegal and populist manner the JNF’s money in order to eliminate the unprecedented [budget] deficit created by his failed policies,” a JNF spokesman said in a statement.

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