State Comptroller Raps Israel's Political Parties for Dodgy Real Estate Practices

Lindenstrauss says foundations linked to Labor and Likud violated lease terms.

State Comptroller Micha Lindenstrauss has criticized the country's political parties for questionable real estate practices including millions of shekels in unpaid municipal taxes and mismanagement of assets. A report on the issue is due for release on Monday.

Most of the criticism is directed at the Labor Party, Likud, Meretz, the National Religious Party and the Communist Party - the latter two are now part of larger factions in the Knesset.

Parties sometimes have been unable to produce the necessary documents to prove their ownership of real estate, Lindenstrauss says.

On the other hand, he says parties sometimes have not demanded replacement facilities for real estate taken over by local authorities. Also, there have been cases where parties rented out real estate at rates substantially under their fair rental value.

The report follows a two-year examination of the assets of 17 parties and three foundations holding assets on behalf of the Labor Party and Likud.

The report also reveals the extent of parties' real estate holdings; for example, Likud has declared that it owns 26 properties, the Labor Party 30, the Communist Party 20, the National Religious Party 39, and Meretz 1.

The Communist Party is part of the broader Hadash faction in the Knesset, while the National Religious Party is part of the Habayit Hayehudi faction.

Lindenstrauss found that the Labor-affiliated Berl Katznelson Foundation and the Likud-affiliated Tel Chai foundation had violated the terms of leases. The Labor Party's municipal tax (arnona ) debt amounted to NIS 1.45 million owed to 17 local authorities, while the Communist Party's debt was estimated at NIS 2.07 million owed to 21 local authorities.

The Katznelson Foundation came in for particular criticism over a deal between the foundation and Beit Berl College, an institution that was established by the Labor Party's predecessor, Mapai. The deal involved a NIS 98.3 million payment by the college to the foundation in connection with a sublease.

The Labor Party controls the Katznelson Foundation, Lindenstrauss wrote, and had an interest in the transaction in that some of the proceeds would help cover the party's debts.

The comptroller questioned why the transaction had not come before the foundation's control committee, as he said the law required. He said the foundation's approval of the deal was invalid and that the transaction needed court approval as well.

Lindenstrauss also said the foundation had put up buildings on the Beit Berl College campus without securing the proper permits and had leased property below market rates. The foundation, for its part, said it is currently under new management and is working to correct deficiencies in the handling of real estate assets.

The Labor Party, meanwhile, said it had new leadership and that the people involved in the alleged improper dealings were no longer in office. Labor said it was working to address deficiencies and had put in place new oversight procedures.

Lindenstrauss also noted inconsistencies between the list of assets Likud had handed the government's registrar of parties and what the party had stated elsewhere. The comptroller also said the party and its affiliates had not provided the required documents to have its assets registered in its name.

Lindenstrauss added that the Tel Chai foundation once appointed a nonprofit group to run a site leased from the Israel Lands Administration for a museum, but the site was actually being used for a restaurant and entertainment center.

State Comptroller Micha Lindenstrauss.
Emil Salman