Israel Police Investigations Into Netanyahu Ally Bitan Puts State Budget in Danger, Treasury Officials Say

The absence of Likud MK and coalition whip David Bitan due to ongoing fraud and money laundering investigations would prove problematic for the 2019 budget, Finance Ministry officials say

Former coalition whip, Likud MK and suspect of fraud, money laundering and breach of trust, David Bitan.
Ilan Assayag

Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon will have a hard time passing the 2019 state budget without Coalition Chairman David Bitan, who faces corruption allegations, sources at the Finance Ministry told TheMarker this week.

The police’s investigation into Bitan is proceeding as ministry officials push ahead with the budget that is due to reach the cabinet next month.

“If Bitan is under investigation, it will be hard to pass the budget,” a ministry source said.

Bitan, a former deputy mayor of the Tel Aviv suburb of Rishon Letzion, was questioned Sunday on suspicions of bribery, money laundering and breach of trust while he was deputy mayor. His wife, Hagit, who was interrogated twice on suspicions of involvement in money laundering, has been placed under house arrest.

A disagreement among members of the parties in the governing coalition at a Knesset Finance Committee meeting Monday suggests that it is not clear the budget will take shape as expected.

Bitan, who is a member of the prime minister’s Likud party, was a major force in the approval of the last two-year budget, which covers 2017 and 2018.

Bitan is a dominant presence as coalition chairman. During the debate on the 2017-18 budget, he was the one who made sure the budget passed.

Regarding other legislation pending at the Knesset, for example on increased government payments for the disabled, Bitan has been the point man for the prime minister. He has been the key player resolving differences on the issue between Netanyahu and Kahlon, the finance minister.

For the time being at least, Bitan has returned to the Knesset and on Tuesday attended a session of the Labor, Welfare and Health Committee, which is considering government allowances for the disabled. But the pending criminal investigation into Bitan certainly works against him.

Among the three key players involved in passage of the budget – Knesset Speaker Yuli Edelstein, Finance Committee chief Moshe Gafni and Bitan – it is Bitan’s role that is most important.

Officially Bitan will only address the 2019 budget in January after it is presented to the cabinet. In practice, it is reasonable to assume that he would also help draft the budget. Without him, the budget approval process could prove to be an ordeal.

Officials at the Finance Ministry warned on Monday that, in Bitan’s absence, any consensus on the budget among the coalition parties could unravel. At a time when major economic decisions for the country are also in the offing, Bitan’s potential absence might be felt immediately.

This was apparent at Monday’s Knesset Finance Committee session when the Finance Ministry failed to muster a majority for approval of 7.5 billion shekels ($2.1 billion) in budget changes – technical changes including the transfer of 5 billion shekels in budgetary surpluses from 2016 to 2017.

In the committee, opposition to the Finance Ministry actually came from members of the governing coalition, including the coalition’s point man on the committee Miki Zohar of Likud. He was joined by Oded Forer of coalition party Yisrael Beiteinu, who demanded more funding for new immigrants. Bezalel Smotrich of Habayit Hayehudi, another coalition party, demanded more funding for West Bank settlements.

Zohar explained that his opposition stemmed from the Finance Ministry’s opposition to 900 million shekels in additional funding for the Jerusalem municipality. “The Finance Ministry doesn’t respect the members of the Knesset and isn’t letting them carry out their policy,” Zohar said.

Even if Bitan is replaced by another coalition chairman, Finance Ministry sources had a hard time suggesting who could replace him and basically have to do his job from scratch. There is a growing feeling in the Knesset that Netanyahu might decide to bring an election forward from the end of 2019 to May 2018, following celebrations marking Israel’s 70th anniversary in which the prime minister will be in the spotlight.

But Kahlon, the head of the center-right Kulanu party, would not relish an early election. He wants the current government to remain in place in the hope that he will chalk up more economic achievements, including lower housing prices, if an election is held later. But as long as election fever is in the air, Knesset members are likely to be more assertive in their demands.