Jerusalem Municipality Loses Supreme Court Appeal Over Illegal Fund Transfers

The Jerusalem Municipality has suffered a significant legal defeat as the Supreme Court upheld a lower court's ruling that the city improperly transferred tens of millions of shekels over 12 years without competitive bidding. The transfers were based on an internal, illegal procedure the municipality created for itself, often funding projects described as 'joint ventures' primarily within the Haredi sector.

The case was brought to light by a petition from the "Teru'ah" (Awakening) faction and its leader, Adir Schwartz. Between late 2019 and November 2021 alone, the municipality allegedly transferred at least 36 million shekels using this method. Notable recipients included the "Tzam'ah" festival by Chabad Youth, which received 2.3 million shekels, and the "El Hameyan" network of the Shas party for prayer events, which received 1.6 million shekels. Even the Bnei Brak Municipality received 500,000 shekels for a similar event.

The District Court judge, Dana Cohen-Lekach, had previously ruled that the municipality's procedure illegally relied on exemption regulations intended only for government ministries, not for local authorities. Supreme Court President Isaac Amit fully endorsed this decision, rejecting the municipality's appeal and emphasizing that municipalities must adhere to administrative legality and cannot create exemptions from tender requirements.

The municipality claimed it operated with the Interior Ministry's "supervision," but the ministry denied this, supporting the petitioners' stance. Following the dismissal of the appeal, Jerusalem Municipality was ordered to pay 20,000 shekels in legal costs.