High Court weighs petition against NIS 460m. coalition fund transfers during election recess

The High Court of Justice on Tuesday heard a petition by Hiddush and Democrats MK Naama Lazimi challenging the transfer of roughly NIS 460 million in coalition funds after the Knesset entered its election recess.

The petition, filed against the Knesset, Knesset Finance Committee chairman MK Hanoch Milwidsky, and Knesset Speaker Amir Ohana, was heard by a three-justice panel consisting of Justices David Mintz, Khaled Kabub, and Ruth Ronnen.

The court questioned why the same budget requests included both matters that fell under the definition of “special cases” and matters that did not, and why Ohana had no authority to approve a hearing on the latter.

Dr. Yifat Sollel, who represented the petitioners, told the court that this was “like putting matzah on the Passover table, surrounding it with pitas, and saying the matzah makes the entire table kosher.”

The court proposed releasing only the urgent funds and returning the rest to the Finance Ministry, which would determine which transfers were urgent and which were not.

Toward the end of the hearing, the finance minister, through the State Attorney’s Office, asked to present his position and called on the court not to split the budget requests. He asked the court to decide immediately whether to leave the interim order in place or lift it with respect to all the funds. The court will issue its decision later.

Sollel, Hiddush’s deputy director and legal adviser, said: “The finance minister’s notice to the court sounds like a statement by a mafioso, and that is how all the budget requests unlawfully approved by the Finance Committee should also be viewed, transferring hundreds of millions of shekels in public funds to two sectors the government wishes to favor.”

Lazimi said: “The finance minister is behaving like a mafioso toward the High Court judges, demanding that important budgets be held hostage together with coalition funds for sectors close to the government, as an election bribe in every sense of the word.

"Smotrich is trying to threaten the court and prevent it from making the most logical decision: The government and the Knesset must justify the urgency of transferring every shekel of public money on the eve of the elections, as required by Knesset procedures. We will not allow the continued erosion of the Knesset’s standing and the transformation of public funds into a private bank for the coalition parties.”

The petition argues that the Knesset Finance Committee was “unlawfully convened on August 4, 2026, after the Knesset had already entered its election recess on July 18, 2026, despite the fact that the Agreements Committee had not consented to that meeting, and while using the coalition’s power in violation of the duty of restraint and moderation imposed on the government and the Knesset during an election period.”

The petitioners claimed that at the allegedly unlawful committee meeting, “large-scale budget transfers were approved, including approximately NIS 460 million in coalition funds and hundreds of millions of additional shekels for political purposes that were not classified as coalition funds, all in violation of the legal framework established for the Knesset recess, in the Knesset Law and in a decision by the Knesset House Committee that established an initial framework allowing for one Finance Committee meeting, intended primarily to complete deliberations that began before the Knesset entered its election recess, which took place on July 29, 2026.”

They further claimed: “Despite demands by the petitioners and others before the committee was unlawfully convened, no legal opinion establishing and validating the legal basis for convening the committee was placed before it. On the day it convened, the committee chairman stated orally that the legal source was a decision by Ohana. If such a decision was issued in writing, it was not placed before the committee or provided to its members.

“The petitioners will argue that the committee chairman decided to convene the Finance Committee without a lawful source of authority permitting it to meet, and that Ohana, insofar as he permitted and/or ordered the committee to convene, exceeded his authority without being presented with a detailed, substantive, and professional factual basis establishing that the issues on the requested meeting’s agenda and the decisions the chairman sought to advance fell within the exception for ‘special cases.’”

Milwidsky and Ohana, for their part, argued through Yitzhak Bart of the Knesset Legal Department: “There was no defect in the decision that would justify judicial intervention in an internal parliamentary decision. The committee convened in accordance with the Knesset Rules of Procedure and in a manner consistent with past practice during election periods. All the budget requests were transferred to the Finance Committee by the Finance Ministry after being approved by all relevant government bodies, including legal advisers, and therefore comply with the procedures.”

They further argued that “the Israeli government is not a caretaker government. The elections have not yet taken place, and the government has not resigned.”

The Finance Ministry, represented by the State Attorney’s Office, similarly argued that there was no legal impediment, from the standpoint of government operations, to considering the transfer of the coalition funds, while noting that professional reviews of the matter were still underway.