Did Barak Ditch Labor Because of Its Massive Debt?

Much of the debt was accumulated during the two election campaigns when Barak led the party, in 1999 and 2009.

Defense Minister Ehud Barak left the Labor Party this week - and left behind its massive debt as well.

Much of the debt was accumulated during the two election campaigns when Barak led the party, in 1999 and 2009.

According to a state comptroller report on the February 2009 election, Labor had a NIS 3.46 million deficit from the election itself, caused by NIS 11.52 million in income and NIS 14.98 million in expenses. The party's total debt was NIS 88 million at that time, the comptroller said.

The party's current financial condition is not entirely clear; there are some indications that Labor has assets worth as much as its debt, if not more.

Despite spending more than its income during the 2009 campaign, Labor lost seats in the Knesset, and dropped from 17 to 13. As a result, it received less funding for its Knesset faction as well as for its election campaign, further exacerbating the party's financial straits. Now that Barak has left Labor to form a new party, Atzmaut, along with four Labor MKs, his former party is demanding that the new faction take on part of Labor's debts, as splinter factions must do by law.

In addition to the 2009 losses, the party's debts grew in the 1999 prime ministerial election, when Barak beat out Benjamin Netanyahu.

The party reported increasing its debt by NIS 22.3 million during the campaign, to NIS 127.9 million, up from NIS 105.6 million the year before. In contrast, in 2001, the year when Barak lost his post as prime minister to Ariel Sharon, Labor's debt declined to NIS 117 million, down from 122 million the year before, due to a financial recovery plan for the party. However, it grew to NIS 122.5 million the following year, after Barak resigned as party leader.

The Knesset is now trying to figure out how much of Labor's debt the new Atzmaut party should assume and how to measure Labor's debt and assets.

MK Eitan Cabel (Labor ), who had been the party's secretary general, said the debt is currently estimated at about NIS 80 million, but that the party's assets are also worth about NIS 80 million. Once the party's financial picture is clarified, it will be more apparent whether Barak and Atzmaut will be taking on debt.