A devistating critique of Israeli society and government

Olmert isn’t alone

By Daniel Doron, ISRAEL HAYOM

What does it say about Israeli society and the system of government when a prime minister is convicted of taking bribes?

There will always be a few rotten apples. But the Holyland case, and many other instances of bribery at the upper echelon, show us that the corruption spreading in the government is part of the system that allows politics to control the economy.

Former Prime Minister Ehud Olmert had partners: mayors, city council members, the city engineers, cohorts on the planning committees and wheelers and dealers. But Holyland isn’t alone at the top. Every day, incidences of destructive corruption in the public and private sectors are discovered, from IDB and Hadassah to many municipalities and even the Keren Kayemet and the military chief of staff (all allegations, of course).

Corruption has become a national plague, an integral part of the Israeli regime of concentrated power. Knesset members and the government bureaucracy have gathered immense economic power. They gouge most of the population for taxes while exempting their cronies. They grant the inner circle monopolistic rights worth billions.

There are a few honest people among them, but is there any chance that anyone from that crop won’t become infested, that an open door won’t tempt thieves? Certain politicians and bureaucrats and their friends who serve the tycoons allow them and their huge companies to steal billions from hundreds of thousands of families who can barely stretch their budgets to the end of the month.

Power corrupts, and absolute power corrupts absolutely.

A list of “pigocks” (“havasim” in Hebrew, a play on the words for “pig” and “peacock”) was recently published that included many former senior figures in the Treasury and the Bank of Israel. In exchange for bloated salaries and millions of shekels in bonuses, they “manage” the tycoons’ monopolies. To their discredit, they help tycoons wring all sorts of benefits out of the government, all sorts of privileges and monopolistic rights that squeeze the public, especially low-income citizens, out of billions by setting inflated prices. They receive giant salaries, even if they are the failing directors of businesses that earn profits only by exploiting the public.

Aided by top lawyers, who twist the law to their liking, and with the help of leading accountants, who make worthless presentations that obscure the bad situation of the tycoons’ businesses; with the aid of friendly bankers, PR people, and chirping media canaries, they have pulled billions in credit out of our pension funds and flung them at speculative projects. Billions in pension fund money have been wiped out and emptied the coffers of the Israeli economy, whose excellent human resources and the trillion shekels in foreign investment were supposed to make one of the richest economies in the world. These are the successful “captains of industry” whom attorney Ron Caspi warns us against restraining, lest they leave, abandoning us with nothing.

The Dankner family, for example, got the franchise to produce salt from government property at Atlit, near Haifa. As agricultural ground, it wasn’t worth much, but for some reason the Israel Lands Authority gave a green light to upgrade the lots for extended construction. Their value soared. The deal didn’t go through, but a letter of intent was enough for Bank Leumi to give the Dankners a loan of 358 million shekels ($103.5 million) to purchase some 12 percent of Bank Hapoalim and leverage their status in the bank to take control of IDB and other key companies, only to bankrupt them.

The tycoons’ thievery has wrecked families.

It also undermines our security. Over a million young Israelis have moved to the U.S. and to Europe, not out of lack of patriotism but because they cannot support a family on 5,000 shekels ($1,400) a month when the price of an apartment is equal to 140 salaries and the price of products and services are twice of those in the U.S. The chance of promotion in the workplace is slim. Most employers are controlled by tycoons or by monopolistic unions rife with corruption that prevent outsiders from moving up the ladder.

Israel wouldn’t be the only country that corruption — which lets politicians, oligarchs, and monopolistic unions control the economy — causes to crumble. But it would be the first Jewish state, whose children gave their lives to found it, to be destroyed by people lusting after power and lucre, because most of its people — even the elite — are ignoring the fact that without bread there can be no ideals and that the economy is being exploited, and are saying nothing.

May 18, 2014 | 3 Comments »

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  1. This article is ridiculous. What makes Israel so much more corrupt than other societies? You think the U.S. is so pure? Why is there so much misconduct in the Justice Department and the IRS, among other places? Not that people are bribed, but people do what they want to achieve some ulterior purpose, perhaps to reward and punish certain entities seeking a preferred tax status at the IRS…in the case of the Justice Department, I wouldn’t know where to begin with the Holder administration….”Fast and Furious”…the former head of the Civil Rights Division who probably lied to the U.S. Civil Rights Commission (perjury?) and then was appointed Secy of Labor. DOJ lawyers consistently lie and deceive in litigation before the federal courts….how do I know? I’ve seen it time and again from the other side. There was the scandal involving Gary Aguirre who was an enforcement attorney at the SEC who was thwarted by higher ups in his efforts to secure a deposition from John Mack of one of the big financial firms. Mary Schapiro left the SEC in a hurry after one of her own IG investigators tried to investigate her for perjury to Congress. Her stated reason? She wanted to spend more time with her kids and volunteer at an animal shelter. Give me a break…when somebody says they want to spend more time with their kids, it means they were fired or resigned under a cloud. Real reason: could it be the investigation which could have resulted in a very big scandal for Mary? Interestingly, the Inspector General investigator who was pushing the investigation was fired summarily and without due process on trumped up charges. Of course, the investigation of Mary Schapiro died. Interesting that no one who remained in the SEC Office of Inspector General saw fit to continue the investigation. Why? It was a hot potato.

    Fact is, I sat a few feet from Olmert at a luncheon in California back about ’74, and I didn’t like him. Just gave me some very unpleasant vibes. He’s also the guy who led Israel into their last major war. Too bad he wasn’t in prison already by 2006.

    And keep in mind, it was an alleged anti-semite in the U.S. Courts who maliciously and without justification over-sentenced Jonathan Pollard to a life sentence.

    So, don’t say that Israel is so corrupt, until you take a look at the U.S. I know this is a blog about Israel but you made comparisons to the rest of the world….

  2. Israelis come from many lands and cultures too many of which are infected with dishonesty in one form or another as being commonplace.
    That Israel sent one of its major politicians to prison is a good sign. It shows that corruption will not be tolerated in any stratum of society. That no one is exempt from prosecution for misdeeds. The Olmert case is a giant step in the right direction. It shows that baksheesh, bribery will not be tolerated in an area of the world where it is an accepted practice. Keep on top of it and Israel will ultimately win out over these evils.

  3. The way the article reads the transition from the corrupt government onto the tycoons who by the way would’t be able to play their game without it, it’s done by the author in a way that a hundred years ago marxist/socialists revolutionaries would have been proud of him. But wait a minute, aren’t we talking about the same corruption inherent to the modern socialist/corporatist system? One is nineteen, the other one is twenty minus one.