(August 2, 2022 / JNS) The Israeli Security Cabinet’s decision on Sunday to withhold funding from the P.A. equivalent to the amount it disburses to reward terror could prove to be an empty gesture that undermines the law, if Israel ends up returning the funds in other ways, pro-Israel NGOs told JNS.
The Cabinet announced on Sunday that it would withhold 600 million shekels ($177 million) in tax revenue collected on behalf of the P.A., an amount equal to that paid by the P.A. to terrorists and their families as part of its “pay for slay” policy. The decision was in keeping with a law passed in 2018, referred to as the “pay for slay” law.
However, when Israel announced last year that it would withhold nearly the same amount, the lion’s share (500 million shekels, or $148.3 million) made its way back into P.A. coffers through other means, according to several Israel-based NGOs, including the Kohelet Policy Forum and Palestinian Media Watch (PMW).
“By introducing this revolving-door process of freezing the money and then giving it back, the government entirely undermines the idea of the law,” Maurice Hirsch, PMW’s director of legal strategies, told JNS.
According to the government’s latest claim, in a response forced by a Kohelet petition to the Supreme Court in May, the 500 million shekels sent to the P.A. last year came in two payments: One for 400 million shekels ($118.6 million) in August 2021 and the second, for 100 million shekels ($29.7 million), in December 2021.
The government denied that the money represented the return of funds frozen under the pay-for-slay law, explaining that the first payment was due to a change in accounting. Instead of delivering to the P.A. its monthly taxes after 30 days, as it claimed it had done until then, Israel introduced a new, immediate delivery. July taxes that normally would have been paid on August 31 were paid on August 1. The result: Israel delivered two months of taxes in August, both that of June and July, hence the extra 500 million shekels.
The second payment, of 100 million shekels, came through a secret fund, what the government referred to as a “non-budgetary fund.” In that instance, the amount was a loan, the government said.
“It sounds legal on the face of it; Israel’s just paying the P.A. its July taxes on August 1,” Ariel Ehrlich, head of Kohelet’s litigation department, told JNS. “Where it becomes suspicious is that the government’s answer is different from its original one.”
Originally, the government claimed that the entire 500 million shekels was the result of the zero-time accounting change, an argument Finance Ministry representatives made at a June meeting of Israel’s Foreign Affairs and Defense Committee.
Separating out the 100 million shekels, which was taken from a secret fund, and labeling only that part of the 500 million a loan was a new twist, a change in argument, and raised a red flag for Ehrlich and Hirsch.
“We hadn’t even heard about that secret fund until the government’s answer to the court. We were very surprised when we saw it mentioned in their document,” said Ehrlich. “It’s suspicious and strange because no one knows about this fund, where its money comes from and why it is so secret.”
PMW’s Hirsch added, “We don’t know for sure if the existence of the … fund was intentionally hidden. Our understanding is that clearly it was.”
Hirsch said he suspects that the 500 million shekels turned over to the P.A. was taken from the very funds that had been frozen under the pay-for-slay law.
“That is our belief because there doesn’t seem to be any other source,” he said, noting that the payments to the P.A. were made during a politically sensitive time in Israel, when the country didn’t have a budget.
“There’s a provision that says in a situation where there’s no budget, you take the previous year’s budget and divide it by 12. Each month, the government can only spend that amount. It can’t commit to anything above and beyond that. At that stage, the government didn’t have a spare 400 million shekels to give to the P.A.,” he said.
PMW petitioned the Supreme Court in June, demanding that the government explain where the money came from. The court will decide whether to grant that request on August 7.
Hirsch said a comment by Meretz Party head and Minister of Health Nitzan Horowitz at the Cabinet meeting on Sunday in which Israel froze 600 million shekels based on the P.A.’s 2021 terror payments raises still more questions about the government’s truthfulness.
“We have an interest in continued security and civilian cooperation with the P.A. and therefore this move isn’t smart. In the end, we return the money to the P.A. in loans,” said Horowitz.
“He’s [Horowitz] saying it’s not worth implementing the freeze law because we just take with one hand and give it back to them as a loan with the other hand,” said Hirsch, noting that this contradicts the government’s latest claims. “The government told us that only 100 million was a loan. What does he mean that we’re giving all of it back to the P.A. in loans? Unless the government isn’t telling the truth.”
Hirsch also said that the government’s explanation of an accounting change from a 30-day delay to immediate delivery doesn’t square with what he’s seen in the past.
“I have requested for the last four years details of tax collection and transfers of money to the P.A. through Israel’s Freedom of Information Act,” he said. “The answers show they’ve always been paying at zero time. There is no 30-day delay. I received information on the ninth of January 2022 regarding December.”
Hirsch recounted once receiving an answer within hours in December 2020.
“Also, their claim that they’re bringing forward the payment in one month means you should see that there would be no more payments because you brought forward payments from the previous month. But all the payments stay exactly the same until the end of the year. It’s just incredible,” said Hirsch.
Said Kohelet’s Ehrlich, “The biggest red flag is the fact that nearly the exact amount they had frozen according to the pay-for-slay law found its way back into P.A. coffers. I want to see what happens in 2022. Will the government really freeze 600 million shekels, or will it find other creative ways to deliver the money?”
Regardless of whether or not Israel plans to funnel the funds into P.A. coffers via some alternate method, Sunday’s Cabinet decision drew heavy criticism from P.A. officials.
Qadri Abu Bakr, the head of the Palestinian Commission of Detainees and Ex-Detainees Affairs, said on Monday that the decision amounted to “theft” and would also be ineffective, according to The Media Line.
“We will keep supporting the families and will never leave them alone. It’s true there are some financial problems, and that’s why we decreased some salaries to 80%, but we will support the prisoners and their families as long as we can,” Abu Bakr said.
“This money is Palestinian taxes. It belongs to the Palestinians, and no other country in the world would have allowed this situation, which is absolute theft. Israel must transfer this money to the PA immediately. It has no right to it,” he continued, according to the report.
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