Israel's Illegal Campaign Funds Problem
Feb. 5 -- When Israelis go to the polls Tuesday, they do so against the backdrop of an issue familiar to most Americans — forbidden foreign campaign donations.
Donations have steadily grown over the past two decades, experts say, and may have even started standing Prime Minister Ehud Barak on the road to the current snap election, less than two years into a four-year term.
In Israel's 1988 elections, Shimon Peres raised $1.6 million from Canadian distiller Charles Bronfman and French tycoon Jean Friedman.
In the 1992 elections, $4 million came from foreign sources, campaign insiders told U.S. News and World Report.
In the 1996 contest that saw Benjamin Netanyahu become prime minister, up to $8 million was raised from American Jews, according to the Jerusalem Post.
And in the last election, between Netanyahu and Barak in May 1999, some estimates said that number rose to as high as $10 million.
But in early 2000, Israel's state comptroller fined Barak's One Israel party more than $3 million — after revealing that One Israel had funneled large amounts of foreign money through nonprofit organizations set up to support Barak.
"His political troubles started with that scandal," says Menachem Hofnung, a professor of political science at Hebrew University in Jerusalem. "Before that, he was regarded as honest and dependable."
The Israeli Election Showdown
Manipulating the System
The exact amount of money given to Israeli candidates by foreign donors is difficult to estimate. Many of the transactions are completed behind closed doors, and are sometimes billed as policy briefings to Jewish organizations abroad, instead of fund-raisers.
In 1994, Israel passed a campaign finance reform law prohibiting foreign contributions to Israeli parties and partisan political campaigns.
In the past, foreign money has also circumvented the 1994 law in the same way that "soft money" does in the United States — by going for advertising that supports a candidate's agenda, but not a candidate by name.
