Israel’s High Court rejects petition claiming Gantz illegally transferred 500 million shekels to PA

The government denies the money came from funds frozen under the “anti-pay-for-slay law.”

Then-Defense Minister Benny Gantz speaks at a ceremony in Tel Aviv honoring wounded soldiers, Nov. 21, 2021. Photo by Tomer Neuberg/Flash90.
Then-Defense Minister Benny Gantz speaks at a ceremony in Tel Aviv honoring wounded soldiers, Nov. 21, 2021. Photo by Tomer Neuberg/Flash90.

The Israeli Supreme Court, sitting as the High Court of Justice, struck down a petition on Wednesday that claimed the previous government illegally transferred 500 million shekels (more than $140 million) to the Palestinian Authority.

The petition was filed by Palestinian Media Watch (PMW), an Israel-based nongovernmental organization and media watchdog group, in June of last year. The petition claimed that the money was transferred from a frozen account that was set aside under the “anti-pay-for-slay law.”

The law was passed in July 2018 to penalize the Palestinian Authority for paying monthly stipends to convicted terrorists. Under it, Israel deducts monies equivalent to those the P.A. pays to terrorists from the monthly payments Israel transfers to the P.A. and sets them aside in a frozen bank account.

The law stipulates that the money, part of the taxes and tariffs (“clearing funds”) Israel collects on behalf of the P.A., will be unfrozen and paid to the P.A. once it stops sponsoring terrorism in this way.

According to the Israeli government, the P.A. spends between 600 million and 650 million shekels ($170 million to $184 million) each year on stipends for terrorists. Some estimates put that number as high as 1 billion shekels ($283 million). The Israeli government collects 600 million to 800 million shekels ($174 million to $226 million) annually for the P.A., accounting for 65% to 70% of its revenue, not counting foreign aid.

According to the petition, then-Defense Minister Benny Gantz met with the head of the P.A., Mahmoud Abbas, in August 2021 and promised to give him 500 million shekels.

Maurice Hirsch, the lead attorney for PMW who presented the case to the High Court, told JNS that the Israeli Finance Ministry confirmed for PMW that 500 million shekels had passed from Israel to the Palestinian Authority. PMW further explained that the Palestinian Authority’s monthly budget performance update clearly stated that the money Gantz ordered paid to the P.A. was money that was returned from the frozen pay-for-slay funds.

Hirsch also said that PMW received a separate report from the Finance Ministry confirming that the money came from the frozen account.

According to Hirsch, the money was transferred in two payments, 400 million shekels after the Gantz-Abbas meeting in August and 100 million shekels after a subsequent meeting between them in December 2021. The attorney explained that at the time of the second meeting, there ought to have been 1.3 billion shekels in the frozen account.

By the end of 2021, the Palestinian Authority was significantly affected by the loss of funds from the anti-pay-for-slay law, said Hirsch.

Threw them a lifeline

“The P.A. was saying in August that the deductions due to the anti-pay-for-slay law were putting them in a position where they were going to collapse financially because they were spending so much money on salaries for terrorists. They were in a position where they needed to decide between survival and sponsoring terrorism,” he explained.

“A hundred million shekels coming off every month, the P.A. was hurting financially, and the person who saved them was Benny Gantz. He had them by the throat. He could have forced them to stop their terror reward program, and instead, he threw them a lifeline,” said Hirsch.

The goal of the petition was to force the government to return the money that PMW says was withdrawn from the frozen account. “They have no jurisdiction to touch that money, Gantz’s withdrawal would have been completely illegal and unjustified,” Hirsch said. “The government took illegal money; we want them to withhold that money from other P.A. payments and put it back in the account.”

Hirsch further explained that at the time of the August meeting, the Israeli government had not yet passed a budget for that year and therefore was operating under substantial financial limitations. Before a budget is passed, the government is significantly restricted in its access to funding.

Slush fund

“The motivation is clear,” he said, “They needed to quickly pump some money into the P.A. because it was on the brink of financial collapse, and the only slush fund that they had available to them at the time was the money in the frozen account.”

The government has denied these allegations, claiming that the money that was transferred to the P.A. was taken from already processed funds designated for future payments to the Palestinian Authority. The government further alleged that the money was given as a loan and was to be deducted from future payments.

Hirsch said this claim is difficult to accept. “There is no paper trail to support the state’s narrative. It doesn’t make any sense,” he said.

The monthly funding that the P.A. has been receiving from Israel has not gone down since the transfer of the 500 million shekels, he explained. “If it’s a standard loan then why have they not been deducting any money, why is it like the money transfer never even happened?” he asked.

According to Hirsch, the High Court found that the petition was grounded in a disagreement on the facts between PMW and the government. The justices said that in their capacity as the High Court of Justice, they are unable to hold any evidence-based hearings and therefore are limited to working based on affidavits provided by the state. In their ruling they said that because the state claimed that the source of the money was legitimate the court could not definitively approve PMW’s claims.

At the hearing, PMW requested the court review the financial history of the frozen anti-pay-for-slay account. “We said, ‘Don’t trust us, just don’t blindly trust the state’s testimony. Let’s just have a look in the account and then we’ll know for sure,’ ” explained Hirsch. However, the court rejected PMW’s request, saying it was unnecessary for the purposes of the trial.

Hirsch further explained that it is standard practice for the court to operate in this manner.

“They rarely investigate and they rarely look into cases, they just work off of affidavits. If the state provides an affidavit and they just swear there was no wrongdoing, then the court will just believe them. Because of this, 99% of petitions against the government are just thrown out.”

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