Yesh Atid leader Yair Lapid decided on Tuesday morning to take on one of the issues at the heart of his dispute with the Likud party - the government's policy regarding Keren Kayemet LeYisrael-Jewish National Fund's (KKL-JNF) revenues and assets.

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In a press conference in Tel Aviv on Tuesday, Lapid said that after the elections he intends to propose a bill to nationalize KKL-JNF, turning it into a government company.

Lapid with the KKL-JNF donations box (Photo: Motti Kimchi)

"On the 20th Knesset's inauguration day, Yesh Atid will put a bill proposal on the Knesset’s table to nationalize KKL-JNF, bringing in billions of shekels from the KKL-JNF's coffers into the state treasury and giving ownership of over 2 million dunam of KKL-JNF lands to the public," Lapid said.

"KKL-JNF will turn into a government company and the money in its coffers, which is the public's money, will return to the public."

According to Lapid, "we need this money so we could give our children a longer school day and smaller classrooms; to give the sick medical treatment that is quicker and more efficient in ERs that are not overwhelmed and with shorter lines; to give 190,000 elderly people the possibility to get over the poverty line.

"We need to use the lands to build, build, build, and increase the housing supply in order to solve the housing crisis threatening to take down an entire generation with it," Lapid said.

No supervision or transparency

KKL-JNF was founded as a non-government organization (NGO) before the State of Israel's establishment, whose purpose is to purchase lands and manage them on behalf of and for the Jewish people.

Since 1961, the KKL-JNF, which owns approximately 13 percent of the state's land (close to 650,000 acres, mostly in high-demand areas in central Israel), has not been responsible for planning and marketing at all.

For the past 54 years, these operations have been carried out exclusively by the Israel Land Authority (ILA), which manages the KKL-JNF's land inventory and transfers roughly NIS 1 billion a year – the sum of the transactions – to the organization. The parties, by the way, are involved in a dispute regarding this sum, with the KKL-JNF charging that it is not a true reflection of the land deals.

Prime Minister Netanyahu, Jerusalem Mayor Barkat and KKL-JNF chairman Efi Stenzler planting trees with children (Photo: Sason Tiram)

The KKL- JNF also has a subsidiary, Himnuta, established in the 1930s but has been operating over the past decade as an entrepreneurial land-development company, which owns close to 10,000 acres of land across the country. The KKL-JNF is expected to take advantage of Himnuta's experience in the field when it comes to planning and marketing operations related to the land it gets back from the ILA.

Over the years, KKL-JNF money was used to fund different national projects, with the decision on the scope of the funding and the projects that are funded being made without the involvement of the Finance Ministry's Budget Department and without the supervision of the State Comptroller and the Justice Ministry.

An aide to Housing Minister Uri Ariel sent a letter on May 11, 2014 to the director generals of all the government ministries. In the letter he announces that the Housing Ministry and KKL-JNF have decided on "a joint venture to fund national projects for different ministries. Please send a number of high-priority projects pursued by your office."

The aide asked the leading administrators in each ministry to send him the name of the project, its general description, an estimate of expenses, and a timeline for execution. "This list is presented as our recommendation to JNF," explained the aide.

The letter even included a time table – the ministries had one week to contact a Housing Ministry employee with the request. The Finance Ministry was shocked by the letter. An official in charge of budgets at the ministry wrote back to Minister Ariel accusing him of overstepping his authority and breaking the law.

"I ask you immediately stop this activity," he wrote. Ariel ignored the letter.

KKL tree planting at the Modi'in Park (Photo: Ohad Zwigenberg)

After the outrage caused by Ariel’s letter, the head of the Budget Department, the accountant general, and the deputy attorney general decided to regulate the distribution of KKL-JNF funds.

A decision was made (which was supposed to be included in the Arrangements Law that was to be approved alongside the 2015 state budget) to transfer most of KKL-JNF’s revenues from marketing of lands to the Finance Ministry to distribute them as part of the official budgeting process. The decision was met with strict objections from the KKL-JNF and from Likud MKs Yariv Levin and Ze'ev Elkin, and was never approved or implemented because the government collapsed and the prime minister called for elections.

Despite KKL-JNF being an NGO, politicians have a lot of involvement in the appointment of officials in the KKL-JNF and its directorate is mostly populated with members affiliated to the ruling party. That's why many view the lack of supervision on the distribution of the KKL-JNF's revenues as a means to turn the KKL-JNF into a channel of money-funneling in return for political support, while bypassing official enforcement authorities like the State Comptroller, the Budget Department in the Finance Ministry and the Knesset's Finance Committee.

The Finance Ministry wanted to compel the KKL-JNF by law to transfer a sum of several hundred million shekels, and up to NIS 1 billion, to the state every year for projects in housing and infrastructure. This clause is at the heart of a fierce political dispute between former finance minister Lapid and the politicians on the right, who are defending the KKL-JNF and are not willing to force it to meet the standards of public transparency, but prefer instead for the money to continue to flow to various projects at the discretion primarily of the JNF itself.

According to Lapid, turning the KKL-JNF to a government company will put its revenues under the accepted supervision channels and speed up the marketing and developing of the grounds the KKL-JNF owns.

"The KKL-JNF used to be associated with the blue (donations) box and the trees and forests planted by children in Tu BiShvat. Today, the KKL-JNF stands for corruption, money funneled in secrecy from one place to another without being reported to anyone, and strange appointments like that of the co-chairman, or dozens of directorate members and messengers around the world," Lapid said.

"Today, KKL-JNF stands for funneling tens of millions of shekels to all sorts of political NGOs and satellite-bodies of all parties in Israel, except for Yesh Atid. It's no wonder everyone were against us trying to introduce transparency in KKL-JNF and subjugate it to the State Comptroller as part of the 2015 budget. All of the politicians were against it because they realize it would put an end to the corrupt mechanism they've been enjoying for so many years."

While Lapid is trying to bring KKL-JNF into the fold, the organization was working to part ways with the State of Israel and the ILA.

KKL-JNF director general Meir Spiegler says the reasons for the breakaway from the state are "purely professional ones" and stem from the fact that the state is frequently responsible for violating its agreements with the KKL-JNF.

KKL-JNF said in response: "Lapid, the most failing finance minister in Israel's history, is trying to gather votes during elections and scrape headlines on the expense of the KKL-JNF."