Secret deal funnels $43 million in Israeli taxpayer funds to settler political groups

This just in: the Israeli government has been financing the political institutions of the settler movement. Shocking, I know. That it was secret? Shocking, I know. That the overseer of those funds was a now-central minister of government? Shocking, I know. That the original use was called a “security grant” but actually paid settlement municipalities as compensation for property taxes not collected on illegal houses not built yet? Mind boggling…and yet totally unsurprising.

At least Finance Minister Yair Lapid ordered all public monies to the settlements frozen, Justice Minister Tzipi Livni called for an investigation. We have long known that the Greater Israel movement entrenched itself in the halls of Israeli governance. And yet the settler movement has failed abysmally in one very important respect: the settlements, SodaStream kerfuffle aside, are still totally dependent on taxpayer funds for economic sustainability. According to Molad: The Center for the Renewal of Israeli Democracy, the think tank that broke the fund funneling scandal, 90% of settlement residents work within Israel proper or are employed as settlement staff. Without the flow of public funds, they would dry up and wither on the vine.

The Israeli TV report below in full:

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3 Responses to “Secret deal funnels $43 million in Israeli taxpayer funds to settler political groups”

  1. KFJ,

    You’re pursing a very odd line of reasoning.

    the settlements… are still totally dependent on taxpayer funds for economic sustainability. According to Molad… 90% of settlement residents work within Israel proper or are employed as settlement staff. Without the flow of public funds, they would dry up and wither on the vine.

    I followed all the links but don’t understand how you reach such conclusions, and the Molad report doesn’t really address them either.

    1) Every working Israeli citizen pays income, sales and property taxes. Those taxes are collected by the state and then redistributed in the form of benefits and services to individuals and communities. Services for communities include local municipal budgets, which include staff salaries, etc.

    Are you suggesting that the Israeli government stop collecting taxes from settlements and stop providing services? Or that it keep collecting taxes but stop providing services?

    To understand whether the settlement municipal budgets are sustainable, we would need to know if the settlements RECEIVE more budgetary support from the central government than they PAY in the form of all combined taxes. If the amount the people pay in taxes is equal to the amount they receive, the communities are self-supporting.

    Even if the communities receive more than they pay out, the question of sustainability can only be determined by decreasing the funds they receive to the level they pay out. If municipal government falls apart, you’re right. But more likely they will respond by trimming staff and services, while maintaining adequate local authority and services.

    2) On the question of 90% of settlement residents working in Israel proper… I just don’t understand what you’re saying. Yes, they work in Israel proper. So what? Are you suggesting that they no longer be allowed to work in Israel proper? Are you saying that all settlement residents should have their citizenship revoked? What exactly are you proposing to achieve this strangulation of settlements?

    3) On the question of extra-budgetary security assistance (i.e. subsidized private security, IDF assistance, etc). Again, part of this is a matter of taxation. As a whole, are the settlements utilizing more state resources than they’re paying for? How much more? Second, are the children of settlement residents drafted to serve the armed forces of the state? (They are, and in a substantially greater percentage than the rest of the country.) Are you saying Israel should stop drafting settlement children? Or that Israel should continue drafting them, but refuse to provide security to the communities they’re from? Your position appears very confused.

    4) Finally, you make absolutely no distinction between settlements. As you well know, there are settlements, and there are settlements, including those whose future as part of the state is so secure their presence is taken for granted by all parties during the negotiations. In addition, there are more isolate settlements for which a consensus may be forming that they should remain as part of a Palestinian state, a position endorsed by some Palestinian officials, but of course, subject to negotiations.

    All in all, this entire line of reasoning, which tries to bypass the perceived future trauma of settlement eviction by advocating… what, selectively abandoning citizens of the state without services or security?… it’s very odd, and, I’ll add, largely removed from the direction of current negotiations.

    There was a time when this blog would have been all over the negotiations, plumbing the details and implications of every publicly revealed snippet. I can’t help but get the feeling that you (a collective “you”) are further removed from ownership over the peace process than at any time in recent memory. Which is sad.


    Victor · February 5th, 2014 at 12:38 pm
  2. Victor, just briefly to clarify my point:

    The largest argument against pulling out of the settlements is the risk of Jew-on-Jew violence, the “civil war.” (Incidentally, threats of civil war have illogically more credence than the harm violence does to non-Jews, but that’s another matter.) If pulling just 6,000 settlers out of Gaza was such an ordeal — thousands of police, sobbing settlers using civil disobedience — then, the question goes, how could we remove 400,000 from the West Bank? There are other erroneous arguments used to insist the settlements must stay, such as security needs, economics benefit, and others.

    These are the implicit cases that I’m arguing against. Molad’s publications highlight the “irreversibility myth” that the settlements are here to stay.

    If: the vast majority of settlers are not ideologues like the Gush Katif faithful, but are there for economic reasons; they merely reside in the settlements, without jobs that would require relocating substantial economic infrastructure; and the settlements themselves are a financial boondoggle in disproportionate state expenses on jobs created merely to employ more settlers, secure sites encircled by Palestinians, and needless standard of living largess…

    Therefore, as Molad says,

    An Israeli government determined to pull the plug on this spree will put an end to the settlement project without sending a single soldier to forcibly evacuate them.

    [...]

    The settlements need not be forcibly dismantled; they should simply be discontinued. The settlement project has no viability without the constant economic and defensive support that comes from and at the expense of the Israeli public.

    The scandal of this funding is that the settlements are not “naturally” growing. Even if so, it’s a specious argument that the federal government should compensate neighborhoods for a rate of “growth” that is ALREADY falsely created by government subsidies. So on top of subsidy, the municipality itself should receive payments for land taxes not collected from houses not built? (Never mind that the very presence of the settlement is illegal under every interpretation of international law by every single Israeli ally, including the US.)

    And not only is the further subsidy fantastical corruption, but it was labeled as a “security” payment! The audacity. So on top of this corruption, consider that the Yesha Council extorted 90% of the public funds for their private activities. Namely, lobbying the Israeli public to (guess what) build more settlements.

    My point is: pull the plug, all the economic settlers will easily find another home to live in (especially if all those subsidies are repurposed within Israel proper), and the ideological settlers will find they can’t live in the future state of Palestine because all their jobs are inside Israel itself.


    Kung Fu Jew · February 11th, 2014 at 8:26 pm
  3. KFJ,

    I still think you’re circling the main issue. What does it mean to “pull the plug”? Molad is not at all specific on this point, which was the subject of my previous comment. Please explain what exactly you’re referring to and advocating. What’s the plug you want pulled? Utilities? IDF security? Citizenship?

    As for the money itself, there are two issues here which should not be bound together. A community is expanding, with the planned construction of 50 housing units, let’s say. It has to lay down road, sewers, electricity… it has to make capital investments for that construction to take place. What happened was very simple, and quite unnatural in the world. A federal government came in and directed local governments to revoke building permits for a specific span of time (was it 11 months?) – the Settlement Freeze instituted by Netanyahu. These local governments had made infrastructure investments, likely backed by loans that had to be paid back on a schedule. In other words, years of planning and bureaucracy had gone into servicing the needs of 250,000 people (not including settlements around Jerusalem). All that planning was suddenly to be put on hold, with the local governments holding the proverbial bag.

    This was an unprecedented political act in Israel. I understand perfectly well that for the far left freezing settlement construction for 11 months is a drop in the bucket, but I will remind you that no Israeli government, left, right or center had ever before taken the step of publicly freezing settlement construction, anywhere, on any level.

    It was a difficult political calculation also, and there’s no need to be naive about the role that this money played in lining up the right-wing acquiescence for the freeze. But at the same time, I think it’s worth understanding that there are real local governments on the ground, doing real government planning and service delivery to hundreds of thousands of people. You can’t just flip a switch and flip them off. This is not a way that responsible people act.

    This money… whatever it was, $40mil, was to be designated to resolving the issues that local governments would have while complying with the freeze. Since the entire point of the freeze was to enable diplomacy with the Palestinians in the hope of reaching a peace accord, $40mil is petty change. So far, it’s a completely defensible and even responsible situation.

    The other issue is whether this money was actually used as intended, to offset the financial costs to local communities of this unprecedented disruption to their operations. Lapid says that a large chunk of the money was essentially laundered to the Yesha Council, in contravention to the agreement that distributed these funds to local governments. But was there an agreement? Some of the local governments say there wasn’t, that the money was given to them, and it’s their right to distribute it however they choose, and that Lapid is deliberately creating a firestorm because the polls two weeks ago showed Yesh Atid bleeding voters. Whatever. This is something I trust the Israeli political system to iron out.

    My basic criticism of your original piece, Molad’s report, and your follow-up comment, is that they are simply not serious. We don’t live in a world where responsible people flip switches and turn off utilities to 400,000 citizens, or withdraw security services from communities established and operating in accordance with Israeli law, which is the ONLY law of the land, you seem to forget.

    I think there’s a certain cavalier indifference implicit in your comments towards the residents of these communities. You, who advocate for the State to normalize the status of hundred of thousands of illegal migrants, appear to be advocating flipping a switch (“pull the plug” in your terminology) and terminating the responsibility of the State to hundreds of thousands of its own citizens. It’s just not a serious concept. It is not connected to any politically viable reality, or practical policy program.

    I’m saying this with some desperation. I think we need a left that is serious, that is anchored in the political and practical reality of the policies it advocates, and that is prepared to take responsibility for the consequences of these policies. “Pull the plug” is not even half an idea – it is cavalier indifference.


    Victor · February 12th, 2014 at 2:31 am

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"I may attack a certain point of view which I consider false, but I will never attack a person who preaches it. I have always a high regard for the individual who is honest and moral, even when I am not in agreement with him. Such a relation is in accord with the concept of kavod habriyot, for beloved is man for he is created in the image of God." —Rav Joseph Soloveitchik