Ministry backs out of Heftsiba deal

Knesset threatens to retaliate with freeze of budget cuts.

Heftsiba 224.88 (photo credit: Ariel Jerozolimski [file])
Heftsiba 224.88
(photo credit: Ariel Jerozolimski [file])
Members of the Knesset Finance Committee threatened Monday to delay approval of planned budget cuts until the money for buyers of homes from the bankrupt Heftsiba company comes through. Committee members were incensed by what they perceived as the Finance Ministry backing out of a promise to the victims of the construction company's collapse. Tempers rose after a representative from the Finance Ministry announced during the committee meeting that it was "not the Finance Ministry's job to refund citizens in the case of bankruptcy. This is an unprecedented step that could bear implications, because next time any other company could ask the government for similar refunds." After hearing the answer from the Finance Ministry, Committee Chairman MK Stas Meseznikov (Israel Beiteinu) said that the delay would be maintained indefinitely as a protest until NIS 25 million were turned over to aid the victims. Meseznikov acknowledged that the protest could cost him his chairmanship of the committee, but called on whoever succeeded him to continue with his protest. "The committee will respond to the Finance Ministry and Finance Minister Ronnie Bar-On's requests in the same manner that the finance minister responds to decisions made by the Finance Committee," threatened Meseznikov. He added that he and the members of his committee were embarrassed and sorry that they had yet to find solutions for the buyers, some of whom became regular fixtures at committee meetings when the issue was on the table. "The finance minister is throwing the people to the dogs. This is his present, right before the Pessah holiday, in honor of the 60th anniversary of the founding of the State of Israel," Meseznikov added. "I hope that with the pressure of the committee, a solution will be found before Pessah." Monday's meeting was held as a follow-up to a meeting on the same topic last week, dedicated to the question of the money that the government promised to hand over to help subsidize financial solutions to the crisis. As part of the original agreement following the collapse of Heftsiba, Israel's banks had agreed to help bail out the apartment buyers - on the condition that the government also helped shoulder the expenses. During that meeting, MK Reuven Rivlin (Likud) said that he had spoken with Bar-On, and that the finance minister had committed to "positively check" the matter of allocating the necessary funds still withheld from Heftsiba victims. Before the meeting closed, ministry representatives sent a text message to Meseznikov's cell phone saying that the minister "was consulting with his legal advisers" and would weigh passing on the sum to the Housing Ministry for distribution to the buyers. But with a solution looking farther away then before, Rivlin expressed his fury Monday with Bar-On. "The finance minister lied to the members of the Finance Committee when he made them believe that the ministry would, in fact, pass on the necessary sum to the aid fund. The minister promised me personally that he intended to act on the topic of Heftsiba and the families who were harmed by it to the restricted sum of NIS 15 million. This promise was the basis of the statement made by Housing Minister Ze'ev Boim from the Knesset podium, saying that the State of Israel would do its part to solve the crisis." Hours after the committee meeting, in spite of the threats, Bar-On met with Prime Minister Ehud Olmert to go over the final details of the planned - and now stalled - NIS 1 billion in cuts to the 2008 budget which were meant to affect government ministries. The two agreed that they would hold another meeting within the next 10 days.