Political Corruption in Israel

Political corruption is not necessarily criminal. Accordingly, the book at hand considers both illegal and legal behavior. Political corruption is the misuse of public power for private gain. This book describes and analyzes examples of political corruption in Israel since the establishment of the state. To that end, it focuses on holders of elected office, and senior civil servants, namely those persons at the pinnacle of government. The author surveys a broad panorama of cases and examples from the early days of the state until the beginning of Prime Minister Netanyahu's second (and currently serving) government. The analysis considers to what extent a pattern of corrupt behavior has come to characterize Israeli politics and public service.  The case studies are based on court rulings, state audit reports, decisions of the attorney general, personal interviews conducted by the author, surveys and publications in the media.

The Main Argument

The economic liberalization of the second half of the 1980s transformed the nature of politics in Western countries, including Israel, and brought about changes in the pattern of political corruption. The presence or absence of social forces espousing political values other than the profit principle and the maximizing of personal benefit determined the outcome of economic liberalization on political corruption.

Unfortunately, the Israeli political elite blindly adopted the neo-liberal logic almost in its entirety, undermining numerous institutions that might otherwise have helped economic liberalism contribute to greater freedom and equality. In addition, the political elites devoted significant efforts toward redefining relations with the Palestinians, even in the absence of any real democratic legitimacy. These attempts were pursued by questionable means, undermining the party system, changing basic rules of governance, and treating corrupt leaders with "kid gloves" as long as they were perceived as capable of realigning relations with the Palestinians. All of this had a decisive effect on the development of political corruption in Israel.

When dirty tricks failed, and the institutional changes initiated by the political elites (particularly, the direct election of the prime minister) did not achieve the desired results, the next move adopted by some of those seeking an arrangement with the Palestinians, or at least a period of calm and security, was supporting "strong" leaders (as the saying goes: "When you need a thief, you grant him a pardon"). The struggle between those seeking to use political tools to address the Palestinian issue and those opposing such efforts significantly influenced the situation in the Likud party, and particularly the moves initiated by Benjamin Netanyahu and Ariel Sharon.

At the same time, some of the opponents of an arrangement felt that all means were legitimate in support of the settlement project, from extensive political appointments, and campaigning against the High Court of Justice to supporting strong leaders, as long as they were perceived to serve the hawkish political agenda. One can hardly overstate the negative influence of the settlers and their many political supporters on the desire to constitute a democratic nation-state with recognized borders, founded upon the rule of law. In the absence of these elements, corruption, in its various forms, thrives.

In addition to all of the above, increasing economic concentration has given rise to a new reality. A few of the country's wealthiest families have become the central players in a number of critical areas of the economy, and economic clout often speaks louder than governmental power. Israel has become more capitalistic, but not more free, liberal or equal. The fact that the subject is now on the public agenda indicates that Israeli is not a banana republic.

Principle Findings

The rise in suspected corruption among holders of elected office and senior civil servants - Over the years there has been an overall increase in the number of Knesset members and ministers convicted of corruption. Over the past twenty-five years, the number of Knesset members whose immunity has been lifted for suspicions of involvement in corrupt acts is nearly twice what it was in the preceding twenty-five years.  In other words, every twenty to twenty-five years, the number of Knesset members whose immunity was removed due to suspicions of their involvement in criminal acts that may be classified as corrupt has doubled. It should be noted that since 1969 the courts have acquitted only three holders of national office: Ehud Olmert, Avi Yehezkel, and Meir Shetreet.

Improvement of investigation and conviction of corruption - In some respects there is the possibility of improvement. The convictions of the years 2008-2010 (Shlomo Benizri, Abraham Hirchson, and Tzachi Hanegbi), the trial of Ehud Olmert currently underway, and the investigations taking place at the time of the writing of this book are all related to events that, for the most part, occurred in 2006 or before. Indeed, following the completion of this book, new cases may yet be uncovered, and still others may never come to light. Moreover, the basic problems of Israeli society still await resolution, or at least those that encourage corruption.[1]  Nonetheless, it would appear that there has been a decrease in certain types of criminally corrupt acts since 2006.

The potential for political corruption and its prevention - Although in 2004 there was a demonstrable change in the struggle against corruption, it was not steady, and some of the indicators are not encouraging. The change was not the result of a political shift or a new culture of governance. Things changed simply because some of the senior players just went too far, Sharon departed from the political scene, and the understanding dawned that corrupt politicians could not be treated with kid gloves.

Of even greater concern is that senior politicians who played some part in major corruption scandals continue to wield tremendous political   power. Some of them even hold senior office at the time of writing. Furthermore, the overwhelming majority of the public, as well as decision makers and shapers of public opinion, still regard the United States as a source of inspiration, despite the fact that its regime is one of the most corrupt in the developed world, if not the most corrupt of them all.

The fragility of the change can also be seen in the identity of those who struggle against corruption. Since 1990, there has been no broad-based protest against the conduct of elected officials, although there has been no lack of justification (the recent social protest, which began on July 14, 2011, is a move in the right direction). Politicians for the most part have avoided any clear, unequivocal condemnation of the colleagues' corrupt conduct, and most have at various stages supported others who were involved in corruption.  The political parties have played only a marginal role in the struggle. The media appears to be playing a diminishing role in the struggle, and the contribution of the print media seems greater than that of television. Channel One exposed two cases, Ma'ariv newspaper exposed one case, whereas Channel Two and Yediot Aharonot newspaper have not exposed any major cases over the last few years. On the other hand, Israeli society has witnessed the emergence of forces that have fought and are still fighting against patterns of corruption.

Changes in patterns and scope of political corruption - The patterns of corruption and their scope have changed. During the fifties, corruption was largely connected to strengthening the ruling party; during the eighties and nineties, it was, at least in part, related to attempts to accumulate political power (both by circumventing the election financing laws, and by handing out jobs). In the last few years, on the other hand, material gain has been the dominant feature. Bribery, embezzlement of public funds, the use of double invoicing, money laundering, etc. are all intended for personal, not political gain. There has been a manifest decrease in the scope of blatant political appointments and in certain forms of corruption that were widespread in earlier election campaigns. The elections of 1988, and the internal elections of the Likud in 2002, produced scandals that eventually reached the courts. The past two election campaigns, on the other hand, did not produce any corruption cases.

The centrality of corrupt practices - Corrupt use of political power is an important factor in Israeli politics and civil service. One cannot fully understand the development of the power structure in Israeli society, and such historical developments as the process of nation and state building, the change of the government in 1977, Netanyahu's first term of office, Sharon's ascent to power, and the status of the High Court of Justice without addressing the subject of political corruption, and the public response to what was presented as political corruption. Almost every decision that required an enlistment of political support was accompanied by the corrupt use of political power.

Political corruption as an instrument to gain power - A significant number of politicians made their way up the political ladder through the corrupt use of political power, and afterwards, through the corrupt use of governmental power.

 Political corruption as a systemic problem - Although political corruption began as a symptom of a structural problem, it developed into a problem in and of itself, and forms yet another element preventing the resolution of the structural problems.

The inefficiency of political corruption - While there are many structural reasons and excuses for corruption, it has no justification and yields no benefit. Corruption does not help in the attainment of noble ends. Corruption undermines the legitimacy of important democratic decisions, and thereby creates an additional political problem. And corruption is not necessarily self-destructive, as evidenced by the economic concentration of the Israeli economy over the last few years. Of late, corruption is not even enlisted in the name of noble causes, but rather serves entirely ignoble cravings and motivations, such as greed, jealousy, and extravagance.  

General Recommendations

The book presents general recommendations concerning the struggle against corruption, as well as some specific recommendations. To begin with, it proves that there is no standard format for combating political corruption. For example, in certain situations, centralization of the government is preferable to decentralization. The privatization of state-owned companies may lead to extensive corruption; transparency, as such, may actually increase the scale of corruption especially if it is regarded as providing legitimacy for certain actions.  Concentrating the battle against corruption in one government institution is detrimental to the overall battle against corruption. It is sometimes better to identify and address the causes of corruption rather than make do with supervision, enforcement and deterrence. However, in other circumstances, such an approach is unlikely to be effective, and direct treatment of the symptoms-the patterns of corruption themselves-is preferable.

Second, we must bear in mind that that even if there were a wall-to-wall coalition in support of the battle against corruption, and even if everyone agreed upon the definition of political corruption and the methods required for its elimination, the reforms instituted to limit it might have a negative effect on the public and political ethos, and even lead to an increase in the scope of corruption in the long run. For example, establishing a direct correlation between the financial compensation of tax auditors and the rate of their tax collection may reduce patterns of corruption in the tax authority in the short and medium terms, but in the long term may blur the distinction between the governmental and the economic realm. The blurring of that distinction may, in the long run, harm the public ethos and even increase political and governmental corruption.

Third, since the struggle to reduce political corruption is in itself a political struggle, which necessitates a coalition of forces, just as in any battle over disputed values and resources, there are greater chances of success when the corruption being fought against is the kind perpetrated by small criminals who are responsible for concrete, defined damage. However, when corruption is systemic, success in its elimination depends on political ability, including willpower, leadership, responsible elites, and a proactive public.

Finally, the arguments not in favor of the battle against governmental corruption should serve as a reminder that the effort must be lead-naturally in the framework of the law, and in strict compliance with the rules-in a manner that is intelligent, multidimensional, fair, and aggressively but not belligerently. The struggle to reduce corruption must not overly impinge upon the ability of the public's elected representatives to govern; it must not deter appointed public servants from properly exercising their discretion, and adopting essential decisions. It should not lead to the creation of a crippling, corrupting bureaucracy, and must not foster delegitimization of the political process. As usual, the truth is in the details-in strengthening the autonomy of the legal advisor of the local authority, in creating simple proceedings, and in the proper treatment of big business.

Concrete Recommendations

Changes in party financing - In order to reduce the influence of donors on holders of elected office, and without impinging the right of citizens to attempt to influence the political system, any donation exceeding a certain amount-to be determined by law-should be transferred to a special public body, or to a blind trust of the party, established for that purpose. The donations transferred from the fund to the candidates and their parties should be anonymous. The idea is to transfer the funds in a manner that prevents identification of the donor (and the body in charge will forward an appropriate notification to the tax authorities).

The proposed law would create a situation in which the recipient of the donation would never be sure of the identity of those who donated to his or her campaign. While a wealthy donor can continue to claim to have supported a particular candidate, the elected official will have no way of verifying that claim, just as he has no way of verifying the identify of those who voted for him in the elections. Ultimately, the uncertainty regarding the identity of donors can function as a negative incentive against attempts at using corrupt means for influencing public representatives. This kind of system might reduce the scale of private contributions to parties, but the damage would not necessarily be great. First of all, the reduced scale of donations would affect all of the major parties, so it would not harm competition. Second, conceivably, the first to withdraw because their names would not be published might well be the very donors who intended to exercise improper influence, and perhaps even to use their contribution as a means for developing corrupt relationships with various candidates.

 An additional recommendation for reducing the influence of the wealthy, and to encourage the parties to "return to the public" is the establishment of a "matching" financing arrangement. Each party would receive a sum from the state budget equal to that of any individual donation that does not exceed a certain amount (for example, if the party succeeds in acquiring a donation of NIS 500, it would receive an additional NIS 500 from the state). It is recommended that a ceiling not be imposed on the total of donations that a party may raise from private sources, as long as no single donation exceeds the fixed maximum. It is also recommended that there be no restriction on campaign expenditures if all of the income is based on donations as stated above.

Selection of the parties' candidates for the Knesset - In addition to the above, it is recommended that economic incentives and appropriate legislature be used to encourage parties to restrict membership in the body that selects the party's candidates for Knesset election, irrespective of whether the electing body consists of all the registered members of the party, the party convention, the party senate, or a selection committee. Membership would be limited to regular paying members of no less than three years seniority. Such methods should be used to encourage the parties to conduct a three-stage selection process for determining their list of candidates to the Knesset. That process should comprise several selecting bodies. First, a screening committee composed of senior party members (who are no longer serving in the Knesset) would prepare a list of recommended candidates. The proposed list would consist of fifty candidates, or double the number of the party's Knesset members, whichever is higher. A second committee would be tasked with confirming or rejecting the candidacy of serving Knesset members, and amending the list proposed by the screening committee. Finally, the list of candidates would be determined by the party's electing body, which would, as stated, be restricted to party members with some minimal seniority. In addition to the above, a term limit of no more than two terms should be imposed on the heads of  local authorities, unless the head of such an authority receives more than 50% of the votes of the eligible voters (as opposed to 50% of the ballots actually cast).

Formation of a coalition in local government - The Attorney-General should determine clearer guidelines for the forming of coalitions following elections to local government councils, or in the wake of coalition crises. These guidelines should be forwarded to the legal advisors of the local authorities.  In this context, it is essential to clarify the distinction between a legitimate political promise and one that is corrupt.

Supervision of municipally-owned companies in the local authorities - The level of local authorities' supervision over municipally-owned companies is weak, even though the annual budgets of the local authorities amount to billions of shekels. It is recommended that the directors of municipal companies be appointed only after they have been vetted by a qualifications committee, similar to the Appointments Committee established under Amendment 6 of the Government Corporations Law, 5735-1975. The local authority's legal advisor would be given the authority to require further examination of a pending appointment, if information emerges that raises suspicions relating to the candidate.

Similarly, all local council members who are members of the local planning committee, as well as senior office holders in the local authority, should be required to submit a financial disclosure statement immediately upon their appointment, and for each of the two years after leaving the position. The statements should be submitted to the internal auditor of the authority, and delivered to the State Comptroller. A procedure should be established for determining the accuracy of the declarations, which would include random examinations of declarations by the Tax Authority (similar to the audit procedures for the annual income tax returns).

These are some of the recommendations for reducing the scale of political corruption in Israel. The important message is that political corruption in Israel should and can be reduced without undermining the democratic nature of the regime or its effectiveness.  However, such change requires attention to the small details, as well as to such additional goals as strengthening the political parties and increasing the involvement of the Israeli public in politics. Two central questions emerge from all the above. Are the people with the ability to reduce the incidence of political corruption at all interested in doing so? And, should it emerge that they lack the desire to cooperate in such an endeavor, will the Israeli public as a whole, or in part, see a need to combine their efforts to promote this important goal?

Video of the Book Launch of Political Corruption in Israel

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