Why real estate developers have to pay bribes?

As the Holyland Real Estate project bribery investigation developes, one has to ask why a honest businessman is forced to pay out millions to the people of the municipality? All that the businessman wants is to build and sell apartments, an activity beneficial to the municipality (more taxes), to the city inhabitants (more apartements) and for water engineers like me. People should be incentivated and subsidized to motivate them to build more, instead of putting obstacles in their way as it is done in Israel.

With the arrest of former Jerusalem mayor Uri Lupolianski, Globes magazine analyses the case and gives an idea how feels to be a builder in Israel today.

The suspicions against Lupolianski relate to his term as mayor of Jerusalem, from 2003, and also to the period when he was deputy mayor, when he also served as chairman of the local Planning and Building Committee and was in charge of the municipality's engineering division, between 1993 and 2003. Throughout the period, Lupolianski was also chairman of Yad Sarah, the non-profit organization that lends medical equipment.

Lupolianski is suspected of having demanded and received bribes from the Holyland developers during these periods. He is alleged to have received NIS 1.5 million up to 1999, and a further NIS 1.4 million in the period 2000-2006. The money was given as donations to Yad Sarah.

In addition, Lupolianski is alleged to have received $30,000 for his own use, to pay political activists during the mayoral elections of 2003. It is further alleged that, in 2005, he received NIS 100,000 in the form of a donation to a rabbinical college run by his son.
In return for these bribes, Lupolianski is alleged to have acted diligently to facilitate the Holyland project... Among other things, he is alleged to have expedited an urban planning decision in the local Planning and Building Committee, and acted to bring about the rejection of nearly 1,000 objections to the project and to prevent a reduction in the height of the buildings by two floors, and to reduce betterment levies payable...

Under questioning, Lupolianski denied all the allegations, and claimed that the monies transferred to Yad Sarah were donations, and that the Cherney family, which was involved in the Holyland project, was a longstanding supporter of the organization.

In short, Lupolianski took no monies for himself. He demanded donations to Yad Sara which is a wonderful charity (my mother received a wheelchair from them, which I returned after her death with a donation of 1500 shekel). I am 100% sure that he asked for donation to his charity from every person coming to his office. I used to have a Keren Kayemet Blue Box in my office and ask people to put their spare coins in it. I asked my children to put coins in it. What did Lupo for the developers? Expedited the bureaucratic process. Exactly what a head of the Planning and Building Committee (that he was) is supposed to do.

The reality is that the permitting process normally takes about ten years. In the meanwhile, the developer's land is producing no income, he has to retain architects, attorneys, etc. to promote the process, he has to pay to he bank to secure the availability of a loan and is living in a general feeling of uncertainty if and when he can start building. Promoters get desperate as they see the years passing and are ready to do anything to advance the process and start building. The bureaucracy is terrible. Lupo is not corrupt and was a good mayor.

Addition: Today, the real estate developer David Appel was convicted of bribing the three public officials so that they would favor his real estate plans through his company, Migdal Hazohar Ltd.

Appel's indictment in 2003 included three charges. On the first charge, the judges ruled that Appel, through Migdal Hazohar, financed Regev's election campaign to the turn of NIS 1.4 million, and gave Regev other benefits through Tavin. Appel's interest in Lod concerned projects in the Ganei Aviv neighborhood and the rezoning of agricultural land in Moshav Ginaton for residential use.

On the second charge, that Appel gave a NIS 95,000 bribe to Ben-Ari to promote his interest in rezoning land in the Givat Shmuel Local Authority's jurisdiction, the judges ruled that exactly the same things occurred as in the bribes paid to Regev.

On the third charge relating to Tal, the judges ruled that Appel sought to create a sense of obligation by Tal by giving him benefits in kind and promises to employ his wife.

This third chargre is interesting. Appel promised to employ the wife of a bureaucrat and made him small favors, nothing that could be considered a "bribe". Maybe he brought him a bottle of whisky for the New Year. All he wanted was that the bureaucrat be accesible and friendly. Without these things the bureaucrats dont even talk to you, they rarely even answer their phones. You have to have their private phone numbers. A promise (unfulfilled) of employing the "pakid" (buraucrat)'s wife is considered punishable.