BySARAH BEN-NUN

JUNE 2, 2026 16:00

Updated: JUNE 2, 2026 16:01

State Comptroller Matanyahu Englman determined Likud and Labor fell short of compliance standards during his review of 2024 faction accounts on Tuesday, directing that NIS 150,000 in public funds be withheld from Likud along with NIS 75,000 from Labor.

The review assessed routine accounts for 17 Knesset factions that obtained state support from January 1 through December 31, 2024. Fifteen factions earned favorable audit outcomes, whereas Likud and Labor did not.

The assessment focuses on factions' regular revenue and expenditures throughout the Knesset term rather than campaign-specific ledgers. Israeli regulations on party financing allocate public resources for day-to-day operations outside election periods. The comptroller noted these allocations aim to sustain factions' ties with the public on organizational and ideological fronts.

The penalty imposed by the comptroller takes the form of reduced public allocations rather than a criminal penalty. Key concerns centered on Likud's handling of membership sign-ups. Registered members in Likud participate in primaries that shape the party's Knesset candidate slate, giving the membership list direct influence over candidate selection.

Englman concluded that Likud did not adequately confirm the identities of new members or trace the origins of payments submitted in their names.

The review identified repeated patterns in payment instruments. Credit cards, used for roughly 60 percent of membership fees, showed 16,346 cards covering multiple registrants, representing about 41 percent of cards involved. Among these, 2,059 cards paid for individuals with unrelated surnames lacking apparent family ties.

Bank transfers, accounting for approximately 40 percent of payments, revealed a comparable issue: 13,236 accounts funded multiple members, or about 46 percent of accounts examined. Of that group, roughly 1,039 accounts supported several registrants with differing surnames and no evident relation.

Practice illegal under Israeli law

Englman observed that these patterns suggest membership fees may have originated from sources other than the members themselves. Israeli statutes treat third-party payments for membership fees aimed at securing voting privileges in internal elections as a potential criminal matter.

The comptroller stopped short of assigning criminal responsibility. Instead, the determination focused on Likud's inadequate safeguards that prompted the concern, resulting in the funding reduction.

Englman described the situation as serious, noting it raises the possibility that fees came from external parties, potentially amounting to an offense. Incorporating such members into voter rolls risks distorting candidate selection for the Knesset.

The comptroller emphasized that Likud had received prior warnings on this matter during an earlier review. At that time, the party claimed it examined registration forms and payment records to block third-party involvement or repeated payment use. Englman deemed those measures inadequate and required stronger verification protocols for members and payments.

In the latest review, Likud informed the comptroller that its membership database lacked features to detect repeated credit-card use across applicants or discrepancies between cardholder and applicant names. The party indicated reliance on applicants' statements affirming personal card ownership.

Englman dismissed this method, stating that dependence on self-declarations falls short. Given the direct impact of membership lists on primaries, factions must implement robust, real-time verification for each registrant and payment source.

Likud assured the comptroller it would perform a full examination and implement necessary corrections.

The audit additionally noted that Likud documented salary adjustments and benefits for staff through verbal approvals without written records or formal procedures.

Labor Party violations

Labor received a noncompliance finding after the comptroller identified acceptance of a restricted loan via Beit Arlosoroff, a controlled party entity.

The review showed Beit Arlosoroff secured a NIS 1.6 million loan from another entity, with NIS 750,000 forwarded to Labor in September 2024. Labor also provided a guarantee covering the full amount.

Labor explained to auditors that the transfer addressed cash-flow strains from postponed state reimbursements tied to 2024 municipal elections. The party maintained the action was allowable and not barred by statute.

Englman disagreed, indicating the details pointed to a deliberate loan arranged to channel funds to the faction rather than a standard corporate transfer.

Englman stated that Labor breached the law by accepting a prohibited loan through its controlled corporation.

Outside the two main cases, the audit identified wider fiscal challenges across Knesset factions. The 17 reviewed groups reported combined income near NIS 168.2 million in 2024, with NIS 147.6 million or 88 percent derived from state sources.

Ten active factions carried deficits reaching about NIS 81.2 million by late 2024. Englman cautioned that factions were diverting current public funds intended for inter-election operations to offset prior campaign shortfalls.

The comptroller also noted unreturned funds from parties no longer in the Knesset. Seven inactive groups still owe roughly NIS 43.8 million in loans and excess advances, while Kulanu and Telem have not repaid about NIS 3.7 million in remaining balances.

Englman described the pattern of ten factions holding NIS 81 million in deficits alongside nine defunct parties failing to settle debts near NIS 44 million or return surpluses around NIS 4 million as incompatible with standards of public trust and accountability.

He urged the Knesset to tackle the matter to secure repayment to the treasury and avert future occurrences.