The Israeli Government's Twilight Zone That Helps Settle the West Bank

The World Zionist Organization's Settlement Division, which isn't a government agency, helps the state get around its own laws.

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Settlement construction in Ramat Shlomo, October 2013.
Settlement construction in Ramat Shlomo, October 2013.Credit: Reuters

If you weren’t able to get through the 300 pages of the state comptroller’s report on the housing crisis, you could peruse the 14-page summary published at the end of last week by the Justice Ministry. The ministry wasn’t actually dealing with the housing crisis, but with the Settlement Division of the World Zionist Organization. Still, the two reports address the same thing: the almost ludicrously amateurish way the state does business.

Most Israelis, whether or not they live in rural communities in the Negev or Galilee or in the West Bank, are apparently unaware of the existence of the Settlement Division. If people know about it, it’s because it’s being mentioned so often in the media lately. It’s being mentioned because of the government’s strange custom of funding the Settlement Division to the tune of at least 50 million shekels ($12.8 million) annually.

Most of this is transferred to the division at the end of the year, of course with the massive support of right-wing MKs in the Knesset Finance Committee. The heads of local councils in the West Bank even took the trouble in December to appear before the committee to make sure the money got shifted.

A few days later, a number of these council heads found themselves under highly publicized arrest, on suspicion of paying bribes to senior officials in the Yisrael Beiteinu party in order to transfer funding to their bailiwicks. Two weeks later, the police raided the offices of the Settlement Division, which did not respond to Haaretz queries for this report.

Although none of that agency’s employees were arrested, the suspicion was that the division was a main channel by which senior Yisrael Beiteinu officials transferred funds to local authorities in the West Bank and the south, allegedly in exchange for bribes.

No tenders, no transparency

It’s no coincidence that the Settlement Division is suspected of being a main conduit in the Yisrael Beiteinu affair. There are two main explanations. The first is the simple fact that the Settlement Division is the state’s key conduit for investment in the West Bank. In fact, the state has virtually privatized management of settling the West Bank (and the Negev and Galilee) by placing it in the hands of the Settlement Division.

The division is fully responsible for rural settlement in Israel — including planning, land allocation, infrastructure, construction of public buildings, security and the allotment of resources to encourage industry or agriculture. In short, all settlement policy in rural Israel is in the hands of the Settlement Division, an agency that’s not a government entity.

The Settlement Division is a completely private entity. It’s an arm of the World Zionist Organization, which pays the salaries of all of its employees, usually on some sort of party-affiliation basis. But funding is entirely from the government — funding that starts at 50 million shekels and often ends at 500 million to 600 million shekels.

This budget is managed outside the government and receives almost no government oversight. The government has an accountant at the division, but he has no employees and is basically in the dark.

Moreover, the Settlement Division’s legal adviser is not subordinate to the government, no tenders are required for the division’s projects and no transparency is required — the Freedom of Information Law doesn't apply to the division, and ethics rules don’t apply.

This anomaly — a private entity that decides public policy with government funding but without ample oversight — drives the Justice Ministry crazy. It's what Deputy Attorney General Dina Zilber has called “the governmental twilight zone.”

“The division is not an operative entity, but it sets policy and implements broad discretion and the allocation of significant resources . It is hard to dispute that these powers are included in the government's core powers that should not be deployed by others,” Zilber wrote in a position paper.

The government's dubious backyard

The government has enacted this policy vis-à-vis the Settlement Division since the late 1960s, when Levi Eshkol was prime minister. In no other realm has the government privatized its responsibility. So why is it doing so regarding the settlement of land, and why in the West Bank?

Zilber makes it clear: “There is an inherent concern that this situation could create a kind of backyard for the government to carry out activities not in the framework of the law.” This is the twilight zone she’s talking about, into which “government powers are channeled with huge budgets."

The state cannot discriminate against Arab communities in funding, so it gives over the handling of rural communities in the Galilee and Negev to the Settlement Division. The division doesn’t fund Arab communities in the Galilee and Negev, but that’s fine — it’s an arm of the World Zionist Organization, not a government agency.

At the same time, settlement activities in the West Bank that may breach the law are blamed on the World Zionist Organization and the Settlement Division, not, perish the thought, on the Israeli government.

In her paper, Zilber mentions how every national institution was established as part of the Zionist project to establish the state. Back then, the British ruled the country, so the Jews set up new national institutions to settle Jews despite Britain's opposition. But this mindset was not supposed to continue after the laws of the new state went into effect.

“Patterns that suited the period of the state in the making cannot continue to exist in a state that has already matured and purports to be a well-organized state,” Zilber writes.

Zilber’s legal problem is her assumption that Israel has matured and seeks to act like a well-organized country. If the Settlement Division is designed to help the state get around its own laws, the state is not yet mature.

Moreover, our lack of maturity is blowing up in our faces. The Settlement Division is suspected of being used in an affair in which funds are illegally channeled to politicians.

So there’s plenty of poetic justice here. The Jews are being fuzzy with their own laws in order to shaft the Arabs. But in the end it will turn out that they have shafted themselves and their country. We deserve it.



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