Israeli gov't plans to abolish the offense of ‘fraud and breach of trust,’ a central charge in PM Netanyahu's ongoing corruption trial

Israel’s governing coalition plans to abolish the criminal offense of “fraud and breach of trust” in the Israeli penal code, which is a central part of the accusations against Prime Minister Benjamin Netanyahu in his ongoing corruption trial. 

The bill is sponsored by Coalition Chair MK Ofir Katz (Likud), Constitution Committee Chair MK Simcha Rothman (Religious Zionism), and MK Michel Buskila (National Unity–Likud), and will be discussed in the Ministerial Committee for Legislation next week before advancing to the Knesset. 

The sponsors explained in a statement that the offense “severely harms the principle of legality and the foundations of criminal law,” is “vague,” and has been “sharply criticized by legal experts from across the political spectrum.”  

The planned bill is highly controversial and immediately drew harsh condemnation from the opposition, as Netanyahu is charged with the offense in all three ongoing cases against him and the bill could derail the trial. 

According to Section 4 of the Israeli Penal Code, “Where an offense has been committed and the prohibition against it is repealed by legislation, criminal liability for committing it shall be nullified; proceedings that have been initiated shall be discontinued.” 

Cases 1000 and 2000 are mainly based on the charge of fraud and breach of trust, meaning they could be completely thrown out if the legislation passes. Only in Case 4000 is Netanyahu charged with another offense – bribery – but the judges have signaled that he may be acquitted of the charge. 

“Over the years, the offense of fraud and breach of trust has become one of the vaguest and most controversial offenses in Israeli criminal law, despite numerous attempts by case law to delineate its boundaries,” the bill’s authors argued. 

They added that “there is a range of offenses in Israeli law used to combat corruption: bribery offenses, money laundering offenses, insider trading, fraud offenses, forgery, obstruction of justice, and more. In these offenses, the elements of the crime are clear and well-defined.” 

Ynet News reported that coalition members want to advance the legislation through a fast-track process in the coming weeks. 

Similar initiatives have been attempted for decades, as various politicians criticized the “fraud and breach of trust” section of the criminal law, which was established in 1977 and states that “A public servant who, in the course of performing his duties, commits an act of fraud or breach of trust that harms the public, even if the act would not constitute an offense if committed against an individual, shall be liable to three years’ imprisonment.”

Despite this, the opposition characterized the coalition’s bill as a blatant attempt to abolish the trial against Netanyahu. 

Yesh Atid leader and opposition leader Yair Lapid stated, “Yesh Atid will stand like a wall and fight attempts to turn Israel into a corrupt and undemocratic state. We will fight this madness in the Knesset, in the streets, and in the courts, and we will stop it. This is not a reform – this is a full-scale coup that will turn Israel into a failed, backward third-world country. The coalition has declared war on democratic and progressive Israel.” 

Gadi Eisenkot, head of the new Yashar party, charged that “The October 7 coalition is working to abolish the offense of ‘fraud and breach of trust’ for which Netanyahu is charged. This is the same coalition on whose watch the gravest fraud and breach of trust in Israel’s history occurred – between the state and its citizens.” 

He claimed that the coalition’s actions, including the planned bill, are not “not out of love for Israel or responsibility to its citizens, but for coalition survival and job preservation.” 

Leader of the far-left Democrats Party, Yair Golan, denounced the planned bill as “a mafia-style move by a government whose senior members are fleeing justice and the law. The message to citizens is clear: it is permitted to deceive and betray the public trust, as long as the chair remains stable. This is a government fighting the rule of law.”