This week, on November 25, 2018, the Tel-Aviv District Court has rendered a criminal conviction for bribery of a public official pursuant to Section 291 to the Israel Penal Law – 1977. The conviction is but one of several ongoing criminal proceedings into alleged bribery involving “Yisrael Beiteinu”, one of the political parties in the Israeli parliament.
In its ruling, the Court convicted the former CEO of the Ezra Association (“Association”), Daniel Alinson (“Alinson”) of bribing a former parliament member and general secretary of the “Yisrael Beiteinu” party, Faina Kirschenbaum (“Kirschenbaum”). This decision thus provides yet another example of the type of money transfers and funding of expenses which may amount to bribery under Israeli law.
According to the Court’s ruling, in the process of pursuing new budgetary sources for the financing of the Ezra Association, the Alinson made contact with Kirschenbaum. The latter offered to finance the Association by transferring some of the coalition monies at the disposal of “Yisrael Beiteinu” party to the Association, in exchange for kicking back half of such funding to the party or directly to Kirschenbaum and her family members by way of reimbursement of their expenses by the Association. Such coalition monies are part of the public funded allocated by the parliament to the various coalition parties on the basis of a political agreement entered into by them in the course of the establishment of the government. Thus, in exchange for the transfer of such coalition monies to the Association, and on the basis of Kirschenbaum’s kick-back demand, the Association covered the following expenses in the total sum of $92,649:
- International travel expenses incurred by Kirschenbaum and her family members in the sum of $40,562;
- Electronic devices purchased for Kirschenbaum and her family members in the sum of $8,593;
- Salary of Kirschenbaum’s son who was “fictitiously employed” as the manager of the Association’s internet forum in the sum of $6,942;
- Political survey conducted for the “Yisrael Beiteinu” party in the sum of $36,561.
As was clarified by the Court in its decision, the coalition monies transferred by Kirschenbaum to the Association should have been transferred by regulation to a specific governmental office tasked with then allocating such monies in accordance with the public objective stipulated in such regulation, and not be re-transferred to the “Yisrael Beiteinu” party or directly to Kirschenbaum and her family members. The Court further rejected the defense’s claims as to the alleged public nature of the aforementioned expenses which were paid by the Association as well as the existence of a “joint projects” mechanism between the “Yisrael Beiteinu” party and the Association which would justify such transfer of monies, relying, among others, on the fact that the expenses reimbursed by the Association were not registered as normal business expenses in the Association’s books, but were rather recorded in a special table detailing the amounts owning to Kirschenbaum which was maintained by the Alinson.
In light of the above, the Court concluded that the Association has transferred the abovementioned sums to the “Yisrael Beiteinu” party and to Kirshcenbum in exchange for the provision of budgetary financing originating from the public budget for the Association’s activities. The monies transferred therefore back from the Association are deemed a bribe, and the Alinson, having provided such bribe, has thus been convicted on account of bribery of a public official in accordance with Section 291 to the Penal Law – 1977.
The Court included in its ruling several interesting statements from which one could potentially sketch out the borderline separating a legitimate cooperation between associations and public officials and the provision of bribe:
- The funding by associations of visits by parliament members or a ministers to Jewish communities abroad – the Court determined that such funding is not in itself criminal, provided such funding indeed amounts to a legitimate expense required for the purpose of promoting the objectives of such an association, and which was registered accordingly in the association’s books. This threshold was not met in the present case, since a) Kirschenbaum’s travel expenses paid for by the Association were not registered in the Association’s books, but rather in a separate record maintained by the Alinson with respect to monies owned to Kirschenbaum, as detailed above, b) the monies provided by the Association to Kirschenbaum were so provided not only with respect to any legitimate motive the Association may have but also in order to motivate Kirschenbaum as public employee to transfer public monies to the Association, and c) paid by the Association on the basis of Kirschenbaum’s demands, and not on the basis of any discretion applied by the Association or the Alinson.
- Assistance in the appointment of family members of public officials – the Court determined that the mere assistance by the Alinson with respect to the employment of Kirschenbaum’s son would not have amounted to a provision of bribe had Kirschenbaum’s son met all the criteria required for such a position. The Court contrasted such assistance with the fictive employment of Kirschenbaum’s son as the Association’s project manager, due to the fact that such position did not exist beforehand, was terminated following Kirschenbaum’s son’s employment, and was indeed meant to use as a pretext for the payment of salary to be deducted from the sums owned by the Association to Kirschenbaum. It remains to be seen whether where an employment by an association of a family member of a public official is indeed required in order to serve such association’s real and legitimate need, such employment would still amount to a provision of bribe to a public official.