The Supreme Court on Monday rejected the Jerusalem municipality's appeal of a ruling that struck down a procedure the city used for twelve years to transfer tens of millions of shekels to outside groups, most of them haredi, without competitive tender. Chief Justice Yitzhak Amit adopted the lower court's decision and ruled that the procedure "lacks legal basis," journalist Itamar Levin reported.
The case began with a petition filed by the Hitorerut faction on the Jerusalem city council and its head, Adir Schwartz, against the municipality's "joint ventures" procedure. That procedure allowed the city to enter into contracts without a tender in cases where an outside party invested at least 50 percent of a project's cost, relying on an exemption from tender requirements.
The petition claimed that from the end of 2019 through its filing in November 2021, the municipality transferred at least 36 million shekels through this channel.
Among the main recipients named in the petition was the "Tzemah" festival run by young Chabad activists, which received 2.3 million shekels. The Shas party's El HaMa'ayan network received 1.6 million shekels for a siyum haShas and selichos events.
The petition also noted that a siyum haShas held by the Bnei Brak municipality received 500,000 shekels, a gathering of the Pirchei HaDegel youth movement headed by the Porush family received 600,000 shekels, and a siyum haShas of Degel Yerushalayim, also headed by the Porush family, received 500,000 shekels.
Judge Dana Cohen-Lekach of the Jerusalem District Court accepted the petition and voided the procedure. She ruled it unlawful, in part because it relied on exemption regulations that apply to government ministries, not municipalities.
The municipality appealed, but Chief Justice Amit rejected the appeal and adopted Cohen-Lekach's ruling.
Amit emphasized "the obvious point that the municipality must act according to the principle of administrative legality and is not authorized to create an exception or exemption from the tender requirement in violation of local-authority tender law."
He added that "the lower court's decision is well grounded in case law, as reviewed in the district court's ruling, and we found no substantive engagement in the appeal with the finding that the procedure lacks legal basis."
Amit also addressed the municipality's claim that it had acted under the "watchful eye" of the Interior Ministry. According to the ruling, however, the ministry denied this and supported the petitioners' position throughout.
The ruling noted that in June 2023, then-Interior Minister Moshe Arbel instructed his ministry's director-general, Ronen Peretz, to examine granting an exemption along the lines of Jerusalem's procedure. Amit noted, however, that this directive does not confer authority to create the procedure and that the amendment was never carried out.
Justices Ofer Grosskopf and Alex Stein concurred with Amit. The Jerusalem municipality was ordered to pay 20,000 shekels in costs.
