David Horovitz
Journalist & Author

The finance minister is limiting his authority. The prime minister wanted to fire him. Now Accountant-General Yaron Zelekha is preparing a blueprint to clean up government finances and practices

Every year, Transparency International, a Berlin-based NGO seeking to fight corruption worldwide, publishes a Corruption Perceptions Index, ranking and rating nations on the basis of a selection of surveys. Its methodology is not above criticism, primarily a concern about self-fulfilling prophecy – the notion that the business people and analysts who are polled might themselves be influenced by past surveys and fail to recognize genuine changes for the better or worse. But the index – which for 2006 placed Finland, Iceland and Denmark in joint first place as the world’s least corrupt nations, and Haiti in last place, 163rd, as the worst examplar – is widely regarded as a reasonable barometer. It certainly makes for plenty of headlines.

In Israel, it also makes for increasingly uncomfortable reading. From 16th place in 2001, Israel has slipped to a dismal 34th in the 2006 rankings, released a couple of months ago. We may still rank above Italy (45th), South Africa (51st) and Greece (54th), but we are now no longer even top of our region, ranking after the United Arab Emirates (31st) and Qatar (32nd).

‘Once Israelis would be offended when their country was compared to a South American republic,’ observed Yaron Zelekha, the accountant-general, when referring to the Corruption Index last month. ‘Today, those who would get offended [by the comparison] are the South Americans.’

Indeed so: Uruguay is 28th in the latest rankings, Chile 20th.

But Zelekha had more: ‘The State of Israel is more corrupt than it might appear to an observer from the outside,’ he asserted, speaking at a Hebrew University conference on corruption in the public administration. ‘We’re lucky that the researchers [at Transparency International] are unaware of the entire truth.’

Zelekha is a controversial figure. While he has campaigned relentlessly since his appointment by finance minister Binyamin Netanyahu in 2003 to root out corruption and shatter what he has termed ‘improper [financial] norms’ across government, he has himself been the subject of critical assault and had run-ins with officials in his own ministry who have accused him of over-zealousness, of exaggerating claims of wrongdoing and of misdealings of his own – all of which he has denied.

Prime Minister Ehud Olmert said not long ago that when he was finance minister more than a year ago, he wanted to fire Zelekha ‘for improper and subversive activities toward his colleagues.’ He said he gave a list of these alleged misdeeds to Attorney-General Menahem Mazuz, that Mazuz ‘showed understanding,’ but that it was decided to put the matter on hold because of the looming elections. After those elections, said Olmert, Zelekha’s fate became an issue for the new finance minister. Zelekha reportedly clashed several times with finance minister Olmert over the privatization of Bank Leumi, and recently gave several hours of testimony to police investigating the affair.

Current Finance Minister Avraham Hirchson is also reported to want Zelekha out, but if so would be thwarted by a legal ban on dismissing officials who have made charges of impropriety so long as those charges are under investigation. Hirchson has twice recently limited Zelekha’s authority – over credit payments to cash-strapped local authorities and over the tender for providing banking services to state employees.

Last month, Zelekha, who is married with two children, complained to the police about anonymous death threats made against him and his family. His wife told Army Radio of a message on her mobile phone that warned, ‘First we will take care of Yaron and after that we will put an end to you and break your arms and legs.’

He had previously told a conference that his team’s government cleanup mission had ‘startled prehistoric beasts who for years furtively sucked the lifeblood of the nation’ and that the ‘coalition of beneficiaries illegally helping themselves to state funds has declared war against us.’

He added: ‘I was not deterred.’ He and his family are now, however, constantly attended by bodyguards.
While these death-threateners and prehistoric beasts went unnamed, a State Comptrollers’ report handed to Mazuz last October did contain a specific allegation. Zelekha reportedly asserted that he had been warned, via a friend, that if he didn’t back off from one particular line of investigation, Omri Sharon ‘and his father are going to walk all over your head.’

Depending on your point of view, all of this might lead one to regard the outspoken Zelekha as a hypocritical, self-aggrandizing and overzealous busy-body poking thorns into the flesh of an efficient, honest government machine or, alternatively, as a heroic champion of financial propriety in a cesspit of dishonesty, a rare shining knight worthy of admiration and all possible public support.

But whatever you make of him, there is no denying the malaise. When former environment minister Tzahi Hanegbi was confronted with allegations that he had made dozens upon dozens of political appointments to his small ministry – an affair over which he is now on trial – then-Knesset speaker Reuven Rivlin rushed to his defense by arguing, accurately, that everyone had been doing it for years.

‘Hanegbi is not the only one who made political appointments, and he should not have to pay the price for generations of ministers,’ Rivlin said.

Then we have the scandal currently engulfing the Tax Authority – with allegations that political connections and pressure secured illegal tax breaks for the well-connected.

Ministry after ministry (including the Treasury itself) has had to clean up long-standing non-kosher practices encompassing everything from the inappropriate employment of political appointees, to false registration of nonexistent assets, to off-the-book, tax-free payments and benefits to staff. Irony of ironies, it has been alleged, one of the worst offenders in terms of dubious tax-avoidance practices was the Tax Authority itself.

The case for more effective, independent supervision is unarguable, as is the case for the extension of that oversight by the Accountant-General’s Office to areas currently beyond its remit, such as the Israel Lands Administration, local authorities and government hospitals.

EVEN AS he has publicly wailed about endemic corruption, Zelekha has publicly counselled optimism. ‘The civil service is mostly clean, pure and committed,’ he declared at another conference, in Herzliya last month, sponsored by the Eretz Israel Museum. ‘The faults are correctible, and we can easily fix them.’

To that end, the accountant-general has said he is shortly to publish a blueprint for fixing the flaws, a series of measures to dramatically bolster the checks and balances. Among the proposals he has already made public is one to set ethical guidelines for politicians to follow. ‘Neither the watchdogs nor the politicians themselves know what is permissible and what is not permissible for a politician to do,’ he said at the Herzliya event. Even the most well-meaning of legislators might thus unwittingly fall foul of the law.

Zelekha also wants outside scrutiny over the appointment of ministry directors-general, to ensure that ministers cannot place inexperienced and inadequate loyalists and friends in those vital positions.

He wants to see a massive increase in personnel and budgets for law enforcement agencies grappling with public sector corruption.

And perhaps most crucially, he wants the various watchdogs within the ministries – including the internal auditors and legal advisers – given full independence so that they can properly supervise and critique the hierarchy they are scrutinizing. Internal auditors at government ministries ‘have no separate budget, so every investigation they make requires the approval of those being investigated,’ Zelekha noted in his Herzliya address – clearly an untenable state of affairs. As things stand, only the accountant-general’s own officials in the various ministries have the necessary independence to function effectively, he said.

That lack of independence – and the confidence to act that goes with it – was plainly a contributory factor in facilitating the alleged abuse at the Tax Authority, at Hanegbi’s ministry and at various other ministries.
Frankly, one dreads to think what the potential for the coercion and intimidation of these hapless, vulnerable would-be watchdogs has created elsewhere – which scandals have yet be exposed, and which never will be. This concern is only reinforced by the alleged campaign of intimidation being waged against Zelekha.

THE FULL extent of Zelekha’s proposed reforms will become clear in the very near future. Only then will we be able to judge if he has gone overboard with the over-zealousness his critics claim is a guiding characteristic or sensibly addressed the flaws and proposed appropriate solutions.

What he has made public thus far, however, seems eminently reasonable, indeed vital – a series of steps that, if unlikely to threaten the likes of Finland, Iceland and New Zealand in the estimable least-corrupt top spots of Transparency International’s annual table, should lift us back above the Qatars and the UAEs toward the Portuguese (26th) and the Spanish (23rd).

And if such reasonable, common-sense improvements draw opposition, therefore, it will reflect much less on the embattled accountant-general than on his critics.

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