The Ultra-Orthodox Autonomy: Real Estate Worth Billions and Conglomerates with No Regulation or Transparency

Over 1,000 religious trusts, predominantly within the Haredi community, possess extensive assets including land, buildings, apartments, and stores, valued at a substantial sum. These trusts navigate a complex legal landscape, existing between two legal frameworks: the state judiciary and the religious legal system. A Shomrim investigation delving into the origins of this tension and its implications, notably in relation to the Mount Meron disaster and the judicial overhaul.

Over 1,000 religious trusts, predominantly within the Haredi community, possess extensive assets including land, buildings, apartments, and stores, valued at a substantial sum. These trusts navigate a complex legal landscape, existing between two legal frameworks: the state judiciary and the religious legal system. A Shomrim investigation delving into the origins of this tension and its implications, notably in relation to the Mount Meron disaster and the judicial overhaul.

Over 1,000 religious trusts, predominantly within the Haredi community, possess extensive assets including land, buildings, apartments, and stores, valued at a substantial sum. These trusts navigate a complex legal landscape, existing between two legal frameworks: the state judiciary and the religious legal system. A Shomrim investigation delving into the origins of this tension and its implications, notably in relation to the Mount Meron disaster and the judicial overhaul.

The construction of a luxury development on land sold by a hekdesh in Tel Aviv’s Neveh Tzedek neighborhood. Photo: Shlomi Yosef

Shuki Sadeh

in collaboration with

May 2, 2024


Approximately two months ago, the State Commission of Inquiry released its conclusive report on the Mount Meron Disaster, characterizing it as "the most significant civilian tragedy in the history of the State of Israel." The Mount Meron disaster was a tragic event that occurred during a religious festival on April 30, 2021, at Mount Meron in northern Israel. Tens of thousands of ultra-Orthodox Jews gathered at the site to celebrate the Jewish holiday of Lag BaOmer. During the festivities, a stampede broke out in a crowded passageway, resulting in the deaths of 45 individuals and injuring dozens more. The incident raised questions about crowd control measures and safety protocols at such events.

The report not only leveled harsh criticism against the “improper culture that we found within public bodies, governing authorities and among public officials,” it also drew conclusions and recommendations with regard to the prime minister, the police chief, cabinet ministers and several other senior officials. The report also includes many pages dealing with the administrative chaos and the plethora of political and economic interests which characterize the compound in which the tomb of Rabbi Shimon bar Yochai is located – a compound that is managed by four different religious trusts, known in Hebrew as hekdeshim. These hekdeshim are a special type of trust existing under Israeli law, similar to a foundation, which manages land, assets or money that were bequeathed many years ago by their original owners for a specific public purpose. In most cases, money generated by these trusts is donated to nongovernmental organizations that were established to fulfill the aims of the original bequeathment. This system, however, creates a complex web of interests which are almost impossible to trace. In the case of religious trusts – which are the majority of the hekdeshim in Israel – the picture is even less clear, thanks to the connections between various trusts, some of which benefit from the same asset, and especially because there is zero transparency.

The conclusions of the Meron Commission were unequivocal and included the recommendation to close the so-called “Committee of Five”, a body established to coordinate between the different claimants to various land endowments at Mount Meron, and is comprised of representatives of the four hekdeshim and a representative of the state who served as committee chair. Members of the commission were split, however, as to which body should take over responsibility for running the compound: Former justice Dvora Berliner, who chaired the commission, and Maj.-Gen. (Res.) Shlomo Yanai were of the opinion that management of the compound should be entrusted to the state, while the third member of the commission, Rabbi Mordechai Karelitz, wanted a different religious trust to take over.

The Meron commission report provides a rare insight into how the world of hekdeshim works, its legal and administrative dimensions and its complex relationship with the state. These trusts operate in the no-man’s-land created by the ongoing disagreement between the Justice Ministry and the Chief Rabbinate – a dispute that in turn was created by the fact that there are two legal systems in Israel: the state’s judiciary and the religious legal system. This is the source of the neglect at Rabbi Shimon bar Yochai’s tomb that led to the deaths of 45 people on the night between April 29 and 30, 2021. To this day, many other hekdeshim continue to operate, with almost no oversight or enforcement.

The prime minister and the police chief at the scene of the Mount Meron disaster. Photo: Reuters

Both public funds and religious hekdeshim have a trustee, who is responsible for ensuring that the money generated is used for the intended purpose. A religious fund is supposed to be managed by three trustees, while a public fund can be managed by a single trustee, a company or an NGO. Public funds are supervised by the Registrar of Hekdeshim in the Justice Ministry and the rabbinical courts oversee religious trusts. As Shomrim revealed in January 2023, one of the lesser elements of the government’s plan to overhaul Israel’s judicial system and the coalition agreements signed between Prime Minister Benjamin Netanyahu’s Likud party and the ultra-Orthodox parties and the National Religious party is the legal transfer of the Registrar of Hekdeshim from the Justice Ministry to the rabbinical courts.

Should the Chief Rabbinate be empowered to act as the regulator when it comes to hekdeshim and is it even capable of fulfilling that role? The following are Shomrim’s findings.

The Chief Rabbinate in Jerusalem. Photo: Eyal Yitzhar
One of the lesser elements of the government’s plan to overhaul Israel’s judicial system and the coalition agreements signed between Netanyahu’s Likud party and the ultra-Orthodox parties and the National Religious party is the legal transfer of the Registrar of Hekdeshim from the Justice Ministry to the rabbinical courts.

Behind the Hekdeshim: Properties, Land, Apartments and Stores

There are currently around 1,100 religious trusts in Israel, which own – directly or indirectly – assets valued at billions of shekels. In most of the cases, these assets are real estate in Jerusalem with links to ultra-Orthodox society: buildings, plots of land, apartments and stores. The steady rise in real estate prices and a policy of high-rise construction in Israeli city centers has led in recent years to a sharp increase in the value of these hekdeshim, as well as an increase in the number of deals and various efforts to change the purpose of these funds. Changing the stated purpose of a hekdesh (The singular form of hekdeshim in Hebrew) requires the approval of the rabbinical courts. A document published by the administration of the rabbinical courts in 2019 stated that “most of the hekdeshim are massive clusters with complex branches, both open and hidden. Many hekdeshim are so intertwined that they form a conglomerate – an amalgam of trusts, NGOs and even companies. Families, officials and trustees from one hekdesh can often be found, to varying degrees, to be involved in ‘sister’ or ‘cousin’ hekdeshim.”

Hekdeshim in Israel have been established during three main periods and have been handled by three different legal frameworks: during the Ottoman period and up to 1922, religious trusts were overseen by the Sharia courts. During the time of the British Mandate, they were administered by the Jewish rabbinical courts; and from the establishment of the State of Israel in 1948 until 1980, when the Trust Law was passed, they were under the jurisdiction of the old British law, the Hekdeshim Ordinance for Religious Purposes.

Israel's Trust Law, like many legal systems, is primarily based on common law principles. The concept of a trust in Israel is derived from English law and is governed by the Trust Law, 5739-1979, which was heavily influenced by the English Trustee Act of 1925.

Under Israeli law, a trust is formed when a settler transfers property to a trustee to hold and manage for the benefit of beneficiaries. The trustee has a fiduciary duty to manage the trust property in accordance with the terms of the trust and for the benefit of the beneficiaries.

The Trust Law outlines various aspects of trusts, including the creation, administration, duties, and powers of trustees, as well as the rights of beneficiaries. It also provides mechanisms for the appointment and removal of trustees, the termination of trusts, and the resolution of disputes related to trusts.

Additionally, Israel's legal system also recognizes religious trusts, such as hekdeshim, which are governed by religious law and overseen by religious authorities. These trusts may have specific regulations and practices that differ from those outlined in the Trust Law.

According to Israel’s Trust Law, all the non-religious hekdeshim along with the public religious hekdeshim will come under the supervision of the Registrar of Hekdeshim in the Justice Ministry. In practice, however, most of the religious trusts did not register. The fissure got wider over the years until, in 2022, the Great Rabbinical Court of Appeals in Jerusalem made a dramatic announcement, instructing hundreds of other religious trusts not to register with the Justice Ministry. The significance of this announcement is that, as far as the rabbinical courts are concerned, they not only have the authority to hear cases related to hekdeshim but can also be the body responsible for overseeing them. This, of course, greatly increases the chances of mismanagement.

The rabbinical courts, for their part, argue that they are better at supervising the hekdeshim than the Justice Ministry. In 2018, in an effort at least give the impression that it was responding to the criticism leveled against it, the rabbinical courts’ administration decided to create a new position to oversee the issue of hekdeshim within the rabbinical court system – despite the fact that there is no law or ordinance that gives them the authority to do so.

Indeed, while the Justice Ministry operates a dedicated website providing information about all the public trusts in Israel, the rabbinical system does not reveal any information about the religious trusts. Moreover, hearings at the rabbinical courts are held behind closed doors, even for the Great Rabbinical Court of Appeals. This reporter, for example, was recently denied entry to a hearing to determine whether certain hekdeshim in Jerusalem were religious or not.

Further evidence that the rabbinical courts use administrative activism when it comes to religious trusts and are not merely acting as the regulator can be found in the following example: In June 2023, the rabbinical court official responsible for religious trusts, attorney Rachel Wozner, took part in a meeting of the Jerusalem planning commission, which discussed objections to a project to build two tower blocks on land belonging to the orphanage trust which is located on Jaffa Street, one of the city’s main roads. Since there are no actual orphans to look after, a trust with a similar name has benefited from this hekdesh and used it to run education programs for ultra-Orthodox youths. Rabbi Yitzhak Yosef, the Sephardi Chief Rabbi, is a member of the management committee. Wozner decided to side with the property developers. She was also highly active when a group of worshippers who pray at the synagogue which operates on the site submitted a request to have it declared an official memorial to fallen soldiers from the Irgun and the Lehi – there is a memorial board there – and thus hopefully prevent the development project, since they were concerned that a real estate development would lead to their place of worship being shut down.

Why should the regulator bother to state a position on something that is so clearly a matter of planning? As far as the rabbinical courts are concerned, they are the “father of all hekdeshim,” so they must also work to increase the value of the asset, as the rabbinical courts stated in their response to Shomrim. “This is an old and distinguished endowment that was established in 5685 (1925) and is under the jurisdiction of the Rabbinical Court,” the response states. “Therefore, the hekdesh submitted, through its trustees and appointed officers, a betterment plan that included developing land belonging to the hekdesh and preservation of the historical sites therein, including the Kahal Tzion and Ahdut Yisrael synagogues.”

The response adds that, “attorney Wozner, by power of her position, is responsible for managing the religious trusts within the rabbinical court administration, including implementation of the courts’ decisions vis-à-vis hekdeshim. In this context, she has worked and continues to work to ensure that the decisions of the rabbinical courts regarding the hekdesh are implemented and that the rights of the hekdesh are not harmed, God forbid. We welcome the fact that this activity has borne fruit and that the aforementioned betterment plan was recently approved, which will ensure that the profits from the hekdesh are used for important public purposes.”

The hekdesh on Jaffa Street in Jerusalem. Photo: Eyal Yitzhar
Why should the regulator bother to state a position on something that is so clearly a matter of planning? As far as the rabbinical courts are concerned, they are the “father of all hekdeshim,” so they must also work to increase the value of the asset, as the rabbinical courts stated in their response to Shomrim.

The Compromise that Shook the Rabbinical Establishment

One of Jerusalem's largest hekdeshim is the Etz Chaim Hekdesh, which comprises a series of trusts located in downtown Jerusalem and at the city's entrance. Funds raised by this hekdesh over the years were directed to an NGO bearing the same name. However, in 2018, the NGO was dissolved due to significant irregularities in its operations. Subsequently, in July 2019, four of its trustees and its real estate advisor were arrested on suspicion of profiting significantly from the sale of some of the hekdesh's assets to themselves and their relatives. The criminal case against these five suspects was unexpectedly closed in February 2021, for reasons that remain unclear to this day. The Justice Ministry asserts its inability to disclose the rationale behind the case closure. Nevertheless, efforts to disband the hekdesh persisted.

In March 2021, attorney Ronen Matry, who oversaw the liquidation of the hekdesh, submitted a request to the courts – the details of which are being revealed here for the first time. According to the filing, the four members of the hekdesh’s committee and one of its employees, who was also the son of a committee member, misappropriated a total of around 9 million shekels between 2006 and 2010 and that more money had been given to their relatives.

According to Matry’s filing, this happened after assets belonging to the hekdesh were sold and the money raised was used to buy the Neveh Simcha nursing home in Jerusalem. According to Matry, the five suspects were paid a monthly salary by that nursing home for several years, despite the fact that they did not work there. The money, he goes on to claim, was in exchange for their work as members of the hekdesh’s committee – a violation of the Trust Law. Matry’s allegations were based, inter alia, on conversations with the five suspects.

Three of the five are from the same family – Yosef Tucazinsky, Zvi-Aryeh Tucazinsky and Haim Tucazinsky – who were the suspects in the criminal investigation that was closed. The others are Rabbi Netanel Linder, who was also a suspect, and attorney Joseph Shachor. Apart from Haim Tucazinsky, they were all members of the hekdesh’s committee at one stage or another and were trustees in some of the Etz Chaim hekdeshim.

Matry asked the court to order the five men to repay the money into the trust’s dissolution fund, with indexed interest. In their response to the court, members of the Tucazinsky family claimed that they were paid the money as salary for their work as directors of the nursing home and for their work supervising the facility, despite admitting that they had no experience in the field. Shachor argued that he was paid for services provided to the nursing home, including payroll and overseeing expenditure. He further argued that the 15,000-shekel monthly salary he received (around $3,750) was reasonable compared to comparable positions elsewhere. The court is expected to rule on the matter soon.

The fifth defendant, Rabbi Linder, reached a classified compromise with Matry and has paid back some of the money. During the course of the process, he argued that for many years he paid for the upkeep of yeshivas for married men and gave stipends to religious students, and that the payment he received from the nursing home should be seen as a partial repayment of some of those expenses and not as a salary.

The Etz Chaim affair led to shockwaves and mutual allegations within the rabbinical establishment. In January 2019, Shimon Yacobi, the legal counsel to the rabbinical courts, and three other attorneys from the rabbinical courts, sent a letter to the attorney general, in which they accused Ashkenazi Chief Rabbi David Lau, who is also head of the Great Rabbinical Court of Appeals, of ousting Rabbi Shlomo Shtasman from his position as head of the special rabbinical court for hekdeshim, who wanted to investigate suspicions of corruption among ultra-Orthodox hekdeshim and NGOs, including those linked to Etz Chaim. “The ouster of Rabbi Shtasman benefited the interests of people closely associated with Rabbi Lau,” the four legal advisors wrote.

Lau declined to respond to the allegations. In the past, following publication of details of the affair, he has denied the allegation, stating that it was part of a wider reassignment of rabbinical judges.

The Neveh Simcha nursing home in Jerusalem. Photo: Eyal Yitzhar

140 Downtown Apartments, Assets Worth Billions of Shekels

Another of the large hekdeshim in Jerusalem is the Va’ad Clali, which was founded in the mid-18th century to help support the Jewish community in the city. The trust now owns assets in the capital valued at more than 1 billion shekels, including at least 140 apartments in the Nachlaot neighborhood adjacent to the city center. Two NGOs have been the main beneficiaries of this hekdesh’s generosity: “Otzar Hachesed” and “Va’ad Clali Knesset Israel for Rabbi Meir Baal Haness,” According to the findings of an investigation conducted several years ago by the Registrar of Associations, they operated from the same office and were run by the same people; they also shared an attorney – Rephael Stub.

In July 2020, the Jerusalem District Court ordered the dissolution of Va’ad Clali’s NGOs and appointed attorney Amit Lederman as insolvency trustee. The dissolution order was also given based on the findings of the Registrar of Associations, which suggested that the Va’ad Clali NGO was not giving out loans – which was supposed to be a central part of its activities. It also became apparent that, in the case of Otzar Hachesed, its financial reports from 2012 to 2017 showed a significant decline in income from rentals, even though there was no change to the extent of its holdings.

A legal case was pursued against Va’ad Clali in the rabbinical courts, during which the hekdesh’s trustee, Rabbi Aryeh Dvir, was replaced by Matry. A ruling issued by the rabbinical court in November 2018 stated that: “We found fundamental failings in [its] behavior […] The cluster of Va’ad Clali’s hekdeshim is not managed by the hekdeshim trustee [Dvir – S.S.], but by Stub, who treats the hekdesh as if it were his own […] The hekdeshim have assets worth millions of shekels lying unused, which they avoid using like the plague. There has been no activity which sought to better these assets and to enjoy the fruits of them. Worst of all – the Va’ad Clali does not distribute stipends and we can unequivocally state that it does not attempt to achieve its goals: Torah, justice and charity.”

Stub and Dvir’s appeal to the Great Rabbinical Court of Justice was denied. Both of the NGOs denied the allegations in the rabbinical courts and during the dissolution hearings at the District Court, but the presiding judge, Avigdor Dorot, rejected their defense, saying that they “illustrate contrary behavior, which seemingly borders on disingenuity and deception.”

The Va’ad Clali hekdesh affair is far from over. In January 2023, Lederman submitted a request to the District Court to be appointed trustee for the hekdeshim instead of for the NGOs. Within a year, however, the Jerusalem District Rabbinical Court ruled that the Va’ad Clali hekdeshim are religious trusts and that they should be under the supervision of the rabbinical courts. The state appealed the decision in the rabbinical courts and, in late March, a hearing was held on the matter. The rabbinical courts’ administration refused to share the protocol of that hearing with Shomrim.

In response, a spokesperson for the rabbinical courts said: “The documents requested are from the court’s files. For that reason, and in accordance with the law, you should approach the relevant court with your request, in accordance with hearing regulations.”

Attorney Stub said in response: “What the rabbinical courts said is a base falsehood with no factual basis.”

Rabbi Dvir submitted the following response: “I was appointed by the rabbinical courts some 20 years ago to supervise and ensure that things were being run properly in the hekdeshim. Only some of the properties belonged to the hekdesh; most belonged to the NGO. The hekdesh acted in a totally proper manner.”

Attorney Rachel Wozner, Senior Inspector of hekdeshim at the rabbinical courts, and legal advisor attorney Shimon Yacobi at the High Court of Justice. Photo: Shuki Sadeh

Not Just Jerusalem: The Tel Aviv Hekdesh is a Cash Cow

Jerusalem is not the only city in Israel where there are hekdeshim; there are also several in Tel Aviv. One of them is called Sha’arei Torah and is located in the Neveh Tzedek neighborhood. In the 1960, the hekdesh’s trustees sought to change its purpose and set up a yeshiva for married students and the city’s chief rabbi, Isser Unterman, gave his blessing. A small yeshiva was established, alongside a parking lot that generated income for an NGO with an identical name that was established to facilitate the opening of the yeshiva.

In 2009, as Neveh Tzedek was becoming a desirable and affluent neighborhood, and given the debts that the NGO had run up, the trustees sought permission from the rabbinical courts to sell the land to a Jewish-American investor who had been a donor to the NGO for many years. The land was sold and changed hands several times and there are now plans to build a luxury housing development there called the Rav Kook Residences – a reference to the fact that the location was once the home of Rabbi Abraham Isaac Kook, the first Ashkenazi Chief Rabbi of British Mandatory Palestine.

In 2020, attorney Rachel Shakerdge, who served as Senior Inspector of hekdeshim at the rabbinical courts, wrote a report that was highly critical of real estate deals carried out by the hekdesh’s trustees, including the purchase of land in Petah Tikva and offices in the Midtown building in Tel Aviv. “Unfortunately, a hekdesh that was supposed to be a school has become a real estate business, which, within a matter of a few years, has engaged in several significant and inexplicable deals,” Shakerdge wrote. “It appears that the main beneficiaries of these deals were lawyers and mediators who earned generous commissions – and not the hekdesh. It seems like the hekdesh became a cash cow.” According to Shakerdge, the total amount of commission paid to lawyers and mediators over the period of a decade came to 1.2 million shekels.

The legal standing of the Sha’arei Torah hekdesh, which, as stated, funds the activities of the NGO, is currently under review. Its designation as a religious-public hekdesh comes from the fact that it was established during the Ottoman period, whereby any dispute that arises is settled in a civilian court, even though the hekdesh operates for religious purposes. This very issue is at the heart of a legal battle that is currently being played out in the High Court of Justice (see below).

The Justice Ministry told Shomrim in response that, “the Sha’arei Torah hekdesh was entered into the register of hekdeshim on October 26, 2021, as a religious-public hekdesh (this status is under review), since it is managed in practice by the rabbinical courts and was originally established, at the start of the 20th century, in the Sharia Court. It should be noted that being in the register of hekdeshim is purely a declarative matter. There is currently a legal process underway on the matter of religious-public hekdeshim.”

The Sha’arei Torah hekdesh did not provide a response by the time this article was published.

Construction work on the Rav Kook project on land sold by a hekdesh in Tel Aviv’s Neveh Tzedek neighborhood. Photo: Shlomi Yosef

All Roads Lead to the High Court. This Time, Too

Like so many other hot-button issues in Israel, the issue of hekdeshim has also found its way to the High Court of Justice. In July 2022, Attorney General Gali Baharav-Miara petitioned to overturn the Great Rabbinical Court of Appeal’s order to religious hekdeshim not to register with the Justice Ministry. In other words, one branch of the state – the branch that is supposed to be the sole interpreter of the law when it comes to hekdeshim – asked the High Court to help it in its struggle against another institute of state – the Chief Rabbinate.

The High Court, it is important to note, did not historically see itself as the right address to appeal against decisions of the Great Rabbinical Court and declined to get involved in a number of such petitions; it only did so under exceptional circumstances, such as when the Great Rabbinical Court overstepped its authority, when it undermined the rules of natural justice or in cases when judicial remedy is needed.

The state attorney’s office, for its part, argues that in the aforementioned case the rabbinical courts have at least overstepped their authority. At a hearing in December 2023, the justices tried to explain to the parties that the solution must be found in legislation. A representative for the attorney general, Neta Oren, responded by saying that, over the past decade, there have been many attempts to resolve the issue in the Knesset – without success. “There are political considerations that are delaying it,” she said. “It has been on hold for many years. The court has been presented with certificates purporting to be public, with the emblem of the State of Israel, issued by an entity not authorized to do so … the register with invented numbers … We all understand the significance of this when it comes to third parties, to issues of money laundering, to communications with banks. It is in the public interest that the issue be transparent and ordered.”

Attorney Neta Oren from the state attorney’s office, in the High Court of Justice. Photo: Shuki Sadeh

Shimon Yacobi, the rabbinical courts’ legal advisor, argued at the hearing that, “if anyone has done things that go against the public interest, it’s officials from the Justice Ministry.” He also said that the person responsible for holding up legislation on supervision of the hekdeshim is the former deputy attorney general, Erez Kaminitz. “All this time, we have been administering supervision of the hekdeshim in practice,” Yacobi said. “Looking back, I am sorry to say that the Justice Ministry is trying to take control of the religious hekdeshim and manage them. That is the purpose of this move.”

As far as the Justice Ministry is concerned, supervision of religious hekdeshim is designed to reduce corruption and bring more order and transparency to the rabbinical system. According to one senior former official from the state attorney’s office, “the concern is that the heirs of the trustees are getting money from the hekdeshim or properties that they are selling off – or that they ask the rabbinical courts for approval to sell a building that’s worth 100 million shekels for half that amount. And in the middle of all this are powerful families in the ultra-Orthodox world who get involved. With all due respect to the unit that they set up [Senior Inspector of Hekdeshim at the Rabbinical Courts – S.S.], the Justice Ministry has much better infrastructure for dealing with complex financial matters like these than the rabbinical courts.”

This is a summary of shomrim's story published in Hebrew.
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