Treasury to Intervene in Payis Lottery Management

For the first time ever, the Finance Ministry will intervene in the management of the Mifal Hapayis national lottery after the state comptroller sharply criticized the operation.

Treasury Director General Yoram Ariav has instructed Accountant General Yaron Zelekha to conduct a special in-depth audit of the lottery's activities.

The audit, which is used to examine and handle failing enterprises, is expected to recommend changes to organization and management to fix problems revealed in the comptroller's report.

In the report about a month ago, the comptroller uncovered dozens of incidences of contributions and sponsorships by Mifal Hapayis at the direct request of its managers, and in a direct conflict of interest.

Hapayis' chairman Shimon Katznelson, its board and managers are mostly local government politicians and often allocate money to organizations related to the municipal or political entity to which they belong. In many cases they make requests for support and then take part in the committees that decide on allocating the funds.

The state comptroller also pointed to many cases when organizations from Ashdod enjoyed Mifal Hapayis' largesse as a result of the direct involvement of Katznelson, a former deputy mayor of Ashdod. According to the comptroller, Katznelson was involved in approving NIS 1.5 million to support organizations he is involved in.

Yital Amadi, acting mayor of Jerusalem and a Hapayis board member, was involved in approving sponsorships to organizations from Jerusalem totaling NIS 1 million. Amadi was also involved in the approval of a donation of NIS 74,000 to non-profit associations in whose management his father is involved.

The comptroller also pointed to Hapayis managers who sent gifts to people connected to them personally, to suspicions of criminal offenses by Hapayis employees which were not reported to the police, and suspected efforts by Hapayis to hide information from the comptroller.

Although Mifal Hapayis' operations are subject to a license from the treasury to hold lotteries, the treasury is not expected to revoke Hapayis' concession or open it to competition, because the license is granted through legislation.

A spokeswoman for the Mifal Hapayis responded that "immediately upon receipt of the state comptroller's report it was raised for discussion by the board of directors and Hapayis' public advisory committee. The committee discussed the findings and recommended means to implement them.

The committee for implementing the changes is headed by the CEO, in accordance with the State Comptroller Law, and at the recommendation of the comptroller. The committee has already implemented the main part of the report's findings. Mifal Hapayis welcomes any examination and audit by bodies appointed by the law to do so."