Campaign Finance: Israel

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Executive Summary

Political candidates are included in the party groups and candidate lists competing in the general elections for the Knesset (Parliament). Their candidacy is supported by their party, which incurs expenses in promoting them. Candidates, however, also run independent campaigns in their party primaries. Israel’s campaign finance laws restrict the identity of donors and the amounts of both donations and expenses. Parties and candidate lists may receive funding from both public and private sources. The restrictions imposed by law are recognized as potentially infringing upon freedom of speech. Constitutional rights in Israel, however, are not considered absolute, and have to be balanced against competing constitutional rights, such as the right of equality.

Introduction

Israel maintains a parliamentary system of government, with the Prime Minister serving as the executive authority of the state and the head of the government,[1] and the President serving as the Head of State but not the head of the government.[2] Knesset (Parliament) members are chosen from candidate lists selected by the parties, following their own primaries. The Prime Minister is selected by the President and is usually the head of the largest party, or the party capable of forming a coalition government, as is the case with the current Prime Minister, Mr. Binyamin Netanyahu.

Most major parties elect their candidates in primaries. The financing of the primary elections held by the political parties is regulated by the Parties Law, 5752-1992[3] as amended. The financing of the general elections for the Knesset, as well as those held for the Prime Minister is regulated primarily by the Political Parties (Financing) Law, 5733-1973,[4] as amended.

This report discusses the following issues related to the financing of political campaigns under Israeli law:

  • The length of the period of election campaigns;
  • Funding sources;
  • Restrictions on contributions and expenditures; and,
  • The implications of such restrictions on freedom of speech.

As a general rule, the financing of political campaigns is derived from both private as well as government funding. Parties obtain government funding for the duration of the campaign as well as for ongoing expenses. The funding and expenditures of both political campaigns and ongoing activities are subject to extensive rules of financial disclosure and enforcement.

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Duration of Election Campaign

A. General Elections

The general election campaign period lasts from the “determining day” until the election day. The “determining day” is defined as follows:

  • (1) The 101 day period prior to the Knesset election day, normally four years from the day on which the previous Knesset was elected;
  • (2) For an election taking place under a law adopted by the Knesset to dissolve itself prior to the expiration of its term of office- the third day following the commencement of such law;
  • (3) In an early election, either for failure to form a government, or by decision of the President or the Prime Minister in accordance with Basic Law: the Government and Basic Law:, the Knesset- the third day after the creation of the cause for early election.[5]

B. Primary Elections

  • (1) The period beginning with the day of the decision of the party conducting primaries and ending with the termination of 14 days following the primaries; the party will schedule the primaries within six months from its initial decision;
  • (2) For a candidate for the post of Party Chairman, Prime Minister, a Minister or a Knesset Member- a period beginning on the determining day as defined above, and if the party did not make a decision regarding conducting the primaries within 30 days from the determining day, the period will end at the termination of these 30 days; or,
  • (3) If the election period for primaries has commenced under either of the above options, and the Party later decides to cancel the primaries, the period ends on the day of such decision.

The law clarifies that where the election period has ended in the absence of primaries, and the party decides to conduct primaries within 120 days following the end of the election period, both periods will be considered as one for the purpose of the restrictions on the ceiling on the amount of contributions from one donor and the total ceiling on contributions and expenses.[6]

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Funding Sources for Political Campaigns

A. Private Funding

Sources

a. Individual Contributions

Individual contributions to general elections are permitted as long as they originate from donors who are Israeli citizens and residents above the age of eighteen, and are not anonymous. This is based on an express prohibition against anonymous donations,[7] and on a requirement that contributions may only be made by a voter as defined in the Elections Law.[8]

Although foreign individual contributions are prohibited in general elections, they are permitted in primaries. This conclusion is based on the following Parties Law definition of “donation”:

a “donation”- in money or money worth, directly or indirectly, in Israel or abroad, in cash or in a commitment of any kind, but excluding personal volunteer activity, the value of which does not exceed 50,000 NIS (approximately $12,000), and is not within the occupation of the volunteer.[9]

b. Corporate, Union and Other Advocacy Group Contributions

Party groups, candidate lists and elected officials such as the Prime Minister, Ministers, Members of Parliament, members and heads of local authorities are prohibited from receiving donations from corporations or registered partnerships in Israel or abroad during both the general election and during primaries.[10]

Personal donations by members of Kibbutzes[11] and agricultural societies are not regarded as corporate donations for the purpose of this prohibition on the receipt of contributions, so long as the contributions made by their members are reasonable under the circumstances. Assistance to a candidate from his/her own party is similarly not prohibited.[13] Also permitted are corporate contributions to a cultural or educational enterprise of a party group or of a body connected to a party group and serving a cultural or educational purpose.[14]

Amounts spent or donated to a party group for the purpose of election or ongoing activities within the General Labor Organization (The Histadrut) are not subject to the contribution limits of the Political Parties (Financing) Law, as long as they are reflected in its accounts in a way that will enable the State Comptroller to clearly identify and verify them.[15]

Donations by non-profit organizations (NPOs, amotot in Hebrew) are not prohibited so long as they are reported and do not exceed the ceilings provided by law. An investigation conducted by the Israeli State Comptroller’s Office into the financing of the 1999 elections resulted in a report critical of the violation of mandatory reporting and the excessive donations by NPOs.[16] The Comptroller determined that activities by NPOs may be subject to campaign finance regulation if they constitute a “campaign message,” in that they are designed to influence voters to vote or to refrain from voting for a candidate or for a party group and there is an organizational link between the party group and the NPO.[17]

Contribution Limits

To Candidates

The Political Parties (Financing) Law applies to party groups and candidate lists. Candidates do not have the right to an independent campaign for election to the Knesset election. Party groups and candidate lists nominate their candidate for the post and incur expenses in promoting that individual’s candidacy. Candidates, however, run independent campaigns within their party primaries.

The Law limits the total amount that may be contributed to an individual’s campaign in the primaries to an amount equal to;

  • 405,000 NIS ($97,237.00) plus 2 NIS for every voter above 100,000 voters; or,
  • double this amount for a candidate for Prime Minister or Party Chairman in primaries with up to 50,000 qualified voters; and,
  • four time this amount in primaries with over 50,000 eligible voters.

Additional amounts are provided for candidates who competed for the above positions as well as for a position of a Member of the Knesset in the same party within 120 days.[18]

A candidate may receive one donation or several donations from an individual donor, the aggregate values of which do not exceed 10,000 NIS ($2,401) in primaries. An individual donor may provide donations to different candidates during primaries, the aggregate total of which does not exceed 30,000 NIS ($7,210). In primaries for candidacy for Party Chairman and Prime Minister, where only one candidate may be elected, an individual donor may donate only to one candidate. In primaries where the number of qualified voters exceeds 50,000, an individual donation may amount to 40,000 NIS ($9,594). The law clarifies that the donations of a person and his family members and dependants are considered one donation.[19]

b. To Parties

A party or a candidate list may not receive any donation from a household exceeding 2000 NIS ($480) in an election year and 1000 NIS ($240) for any other year.[20]

3. Limitations on Campaign Expenditures

a. Financial Ceilings

Section 7 of the Political Parties (Financing) Law imposes several limitations on the expenses that a political group is allowed to incur. The ceiling on election expenses is seventy financing units, subject to specific additional limitations (the latest available value of one financing unit in March 2003 was NIS 1,288,900 ($309,825.20)).[21] The law provides that the expenses of a party group;

  • composed of up to five Knesset members is limited to ten financial units;
  • composed of six to 10 Knesset members may not exceed two financing units per each Knesset member;
  • exceeding 10 Knesset members, may not exceed 2 financing units for each of the first ten members, and one and half times of one financing unit for every remaining member.
b. Encouragement of Voluntary Spending Limits

A party group may notify the Knesset Chairman that it is foregoing direct public financing under the Law. This notification will result in a major increase of the allowable ceiling for a private household contribution; from NIS 2000 ($480.687) to NIS 60,000 ($14,403.19).[22]

B. Government Funding

Direct Funding to Parties and to Candidates

Parties are entitled to direct funding of their national elections and of ongoing expenses. The monies are paid out of the Treasury, through the Chairman of the Parliament, into the party’s bank account.[23] Account numbers must be supplied to the Chairman of the Parliament within fifteen days after the determining day.

Conditions for Eligibility

The Law awards the right to be financed to every party group or the candidate list proposed by the party group. A party group is defined as follows:

  • a group which in the elections to the incoming Parliament has submitted a list of candidates as a party group of the preceding Parliament and is represented in Parliament by at least one member;
  • a party, whose representative(s) has (have) been recognized in the Parliament as a party group by the Parliament House Committee; or,
  • a combination of two or more parties which maintain one party group in Parliament.[24]

A party is defined as “a group of people united in order to promote political or social objectives in a legal way and to promote the representation of those objectives in the Knesset by elected people.[25]”

To receive government financing, within 15 days after the determining day (defined above), the party group must have:

  • notified the Chairman of the Parliament of the names of not fewer than two and not more than eight consenting representatives, at least one of whom is a Member and at least one of whom has been declared by the party group and by himself as being familiar with the party group's financial position;[26]
  • submitted to the Chairman of the Parliament a declaration signed by its representatives that it has done everything necessary to ensure that proper accounts of its income and expenditures in accordance with the relevant directives of the State Comptroller were kept,[27] in particular, the Directives of Political Parties Financing (Bookkeeping of Accounts of Party Group), 5738-1978;[28]
  • notified the Chairman of the Parliament of its bank account numbers;[29] and,
  • notified the chairman of the Parliament of the name of the party group’s accountant, his address and other details requested by the chairman, and submitted a consent form signed by that accountant to serve as such.[30]
b. Amount or Formula of Calculation of Campaign Funding

A new party group is entitled to one financing unit per seat won by the party group in the elections, plus an amount equal for one financing unit. For other parties, the financing received is in accordance with the number of seats the party group won in the outgoing Parliament, plus the number of such seats won in the incoming Parliament, divided by two and added by an amount equal to one financing unit.[31]

The funds provided as public financing for an electoral campaign are paid after the delivery of a certificate by the Chairman of the Central Election Committee to the Chairman of the Parliament. It certifies that a party group has submitted a candidate list for the next Parliament, and the party group will be paid its election expenses in advance. The advance is to be in the amount of 60% of one financing unit for each Member who belonged to the party group on the date of submission of the candidates list.[32] In the case of a party group of fewer than five, the above amount will be given if an independent bank warrantee has been submitted for the difference between this amount and the amount calculated based on the actual number of Knesset Members.[33]

When a party group obtains at least one seat in the elections, 85% of the election expenses are paid immediately after publication of the election results and 15% immediately after the State Comptroller has submitted a favorable report following an audit of the political group.[34] An advance received by a party group is deducted from the above payments. If the advance exceeds the amount due to the party group, the excess is to be deducted from the first payment made to the group for operating expenses.

2. Indirect Funding

The Law provides for public indirect funding by providing free transportation to the polls for voters not currently residing near their polling place,[35] by encouraging voters to vote and by explaining voting procedures.[36] The most substantial form of indirect public financing, however, is the allocation of free campaign broadcasts to all parties and candidate lists participating in the elections.

In accordance with the Elections (Modes of Propaganda) Law, 5719-1959,[37] each party and candidates’ lists will be given ten minutes of airtime, and each party already represented in the outgoing Parliament will receive three additional minutes of airtime for each Member. Although the television broadcasting time is free, the program itself must be produced and financed by the parties, and approved by the Chairman of the Central Election Committee. Similarly, radio campaign broadcasts are also free, and are allocated to every party or list for a period of 25 minutes; every party represented in the outgoing Parliament will be given six minutes for each Member.

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Campaign Finance Law and Freedom of Speech

The effect of campaign finance legal restrictions on the right to freedom of speech has been raised primarily in the context of advocacy activities by NPOs. During the course of an audit of the 1999 elections accounts, it had been argued that the limitations on donations provided by the Political Parties (Financing) Law do not apply to election advertising by NPOs. This is based on the principles of freedom of speech, freedom of organization, and the right to engage in non-parliamentary activities concerning social and political issues.

In his 2000 report, the State Comptroller recognized the status and the power of the principle of freedom of speech in Israel’s democracy. He stated, however, that freedom of speech, like other basic principles, has a relative value. Accordingly, democracy is based on additional basic values, including the value of equality of the elections, and the principle of commitment to public interest, which dictates that elected officials should not depend on wealthy people.[38]

According to the report, the objective of Israel’s Political Parties (Financing) Law is to protect these values by limiting the donations party groups may receive. Israel’s legal system recognizes the need to balance freedom of speech with other values, sometimes at the cost of affecting the former. Thus, election laws, including the Political Parties (Financing) Law, as well as the Election Law (Propaganda Means) 5719-1959, affect the freedom of political speech of the party groups themselves. Their impact, however, is for a worthy purpose, since they are designed to protect the values of equality, fairness of elections, and the orderly exercise of public administration. According to the Comptroller, when the legislature provided in the Political Parties (Financing) Law that financial limits should be imposed on the whole extent of political speech, this rule also applies when the speech is by NPOs whose activities contribute to the party groups themselves.[39]

Therefore, a NPO speech or activity may be restricted by the finance law if it qualifies as “election advertising” (may influence potential voters to vote or refrain from voting in a certain way) and if there is an organizational link between the party group and the NPO.[2]

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Conclusion

Israel’s campaign finance law reflects the recognition that democratic elections require the balancing of several competing constitutional rights, including the right to equal access, the opportunity to be elected, and freedom of speech. It has therefore adopted a system of both public and private funding of the general election as well as ongoing expenses of political parties. Different amounts are allotted for these purposes and the law defines the periods relevant for general and primary campaigns.

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For more information on Israel see:

Prepared by Ruth Levush, Senior Foreign Law Specialist

April 2009

  1. Basic Law: The Government, as amended, § 1 & 3, 22 LAWS OF THE STATE OF ISRAEL (hereafter LSI)) 257 (5728-1967/68). [Back to Text]
  2. See Basic Law: The President of the State, 18 (LSI) 111 (5724-1963/64). [Back to Text]
  3. Parties Law, 5752-1992, § 17, SEFER HA-HUKIM [Book of Laws, Official Gazette (hereafter S.H.)], No. 1395 p. 190 (5752-1992), hereafter Parties Law. Full up-to-date version in Hebrew is available at the Nevo Legal Database at www.nevo.co.il (by subscription)/. [Back to Text]
  4. Political Parties (Financing) Law 5733-1973 (hereafter PP(F)L) 27 LSI 48 (5733-1972/73). Full up-to-date version in Hebrew is available at the Nevo Legal Database at www.nevo.co.il (by subscription). [Back to Text]
  5. Id. § 1. [Back to Text]
  6. Parties Law, §28A, as amended in 2008. [Back to Text]
  7. PP(F)L §8 (D2). [Back to Text]
  8. Knesset Election Law (Consolidated Version), 5729-1969, 23 LSI 110 (5729-1968/69), as amended. [Back to Text]
  9. Parties Law §28A, translated by author, R.L. [Back to Text]
  10. Parties Law §28D(a); PP(F)L §8 (A). [Back to Text]
  11. Collective farms. [Back to Text]
  12. The Parties Law, § 28d. [Back to Text]
  13. PP(F)L, §8B. [Back to Text]
  14. WPP(F)L §17. [Back to Text]
  15. See REPORT OF THE RESULTS OF AN AUDIT OF THE PARTY LISTS FOR THE ELECTION PERIOD OF THE FIFTEENTH KNESSET AND FOR THE PRIME MINISTER (STATE COMPTROLLER OFFICE, Jan. 2000) [in Hebrew]. . [Back to Text]
  16. For further information see R. Levush, Israel: Campaign Finance Regulation of Advocacy Activities by Non-Party Organizations, 3 FOREIGN LAW BRIEF (Law Library of Congress, Sep. 2000). [Back to Text]
  17. Parties Law § 28h. [Back to Text]
    19. Id. § 28f. [Back to Text]
  19. PP(F)L, §8(b) & (c). [Back to Text]
  20. Notice regarding a Change of Amount of Financing Unit, 5763-2003, Yalkut Hapirsumim (Government Notices) No. 5070, p. 2124 (2002). [Back to Text]
  21. PP(F)L §8C. [Back to Text]
  22. Id. § 2(b). [Back to Text]
  23. Id. § 1. [Back to Text]
  24. Id. [Back to Text]
  25. PP(F)L, § 6(a)(1). [Back to Text]
  26. Id. § 6(a)(2). [Back to Text]
  27. Political Parties Financing (Management of Party Group Accounts) 5738-1978, as amended, KOVETZ HATAKANOT 592. [Back to Text]
  28. PP(F)L, §6(a)(3). [Back to Text]
  29. Id.§6(4). [Back to Text]
  30. Parties Financing Decision (Financing Units and Payment Dates) 5751-1981, as amended, KOVETZ HATAKANOT 351, 1413 (5759-1999) [Back to Text]
  31. PP(F)L, § 4(a). [Back to Text]
  32. Id. §4(a)(a1)0 [Back to Text]
  33. Id. §4(b). [Back to Text]
  34. PP(F)L, § 18. [Back to Text]
  35. Elections (Modes of Propaganda) Law, 5719-1959, §16-16a. [Back to Text]
  36. Id.§ 15(A). [Back to Text]
  37. See REPORT OF THE RESULTS OF AN AUDIT OF THE PARTY LISTS FOR THE ELECTION PERIOD OF THE FIFTEENTH KNESSET AND FOR THE PRIME MINISTER (STATE COMPTROLLER OFFICE, Jan. 2000) [in Hebrew]; see also R. Levush, ISRAEL: CAMPAIGN FINANCE REGULATION OF ADVOCACY ACTIVITIES BY NON-PROFIT ORGANIZATIONS, 3 FOREIGN LAW BRIEF (LAW LIBRARY OF CONGRESS, Sep. 2000). [Back to Text]
  38. Id. [Back to Text]
  39. Id. [Back to Text]

Last Updated: 07/25/2012