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The Institute for Ethics and Economic
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ECONOMIC CORRUPTION INCREASES. Israeli daily, Yediot
Ahronot, said today that economic corruption has increased since 2000, making
it one of the most fraudulent economies in the world. A 2005 World Bank
report said
parliamentary body
debates dismissal of
Israeli police question
Sharon over bribery allegations in land deals. Police
questioned Ariel Sharon, the Israeli prime minister, about a corruption
scandal in which a leading businessman was last month indicted for giving him
bribes. Sharon, who has denied any wrongdoing, may also face charges if
Menachem Mazuz,
Corruption Inquiry
May Pose Political Hazard for
Sharon Is Questioned by Israeli Police in Two Political Corruption
Cases. The Israeli police questioned Prime Minister Ariel
Sharon for seven hours in connection with two investigations into possible
cases of political corruption involving Sharon and his two sons. Corruption PROBES targeting Sharon gaining
attention. It was
reported that attorney general and the national police, is investigating
Sharon and two of his sons in three separate corruption cases. The cases
involve several land deals and campaign finances from SA link as Sharon
faces corruption probe The Israeli public prosecutor’s office opened an
investigation into Prime Minister Ariel Sharon and his two sons regarding
payments to the family for the financing of The new charges against the
Sharon family include, among others, the illegal financing of more than five
million schekels ( R9-million), which Sharon received in 1999 from different
sponsors through “dummy” firms for the financing of the internal-party
election campaign against then prime minister, Benjamin Netanyahu. In October
2001, Sharon was requested by the head of the Israeli audit office to pay
back the bulk of the money. Sharon took out a mortgage on his sheep farm,
which the bank has since withdrawn. He then received $1, 5-million
(R13-million) from a South African businessman. The office of the prime
minister has rejected all requests of the investigators. (Independent Newspaper, January 7, 2003
summary by Sherldine Tomlinson). Police question Benizri about corruption in foreign workers tendersThe
Israel Police National Fraud Unit questioned Minister of Labour and Social
Affairs Shlomo Benizri on suspicion of bribery, fraud and breach of trust
from allegedly intervening in ministry tenders for foreign workers. Benizri
is the main suspect in a major and complex investigation opened by the
National Fraud Unit last year. The investigation has focused on the receiving
of bribes and benefits in exchange for tailoring tenders for foreign workers
worth millions of shekels to suit his political associates. The police are
investigation a suspected linkage between Benizri, contractor and foreign
worker mediator Moshe Sela and aides to Rabbi Reuven Elbaz, considered
Benizri’s political patron. The police said the suspicions against Benizri
were the most serious ones brought against a senior public figure in years. (Globes News, First Arab minister resigns The first Arab Cabinet minister in Israel
has resigned Sunday. It is believe that Salah Tarif is suspected of
corruption charges that involve the passing of $5.000 from a Palestinian businessman
who was attempting to obtain Israeli citizenship to a Senior Ministry
Official. Tarif has denied the allegations against him. However, Attorney
General Eljakim Rubinstein is planing to indict him of the charges against
him. Tarif is a member of the Druze religion, which is an offshoot of Islam,
has served as a legislator since 1991. A replacement for Tarif has not been
named. (Yahoo News (Associated
Press),
SCANDAL INVOLVING PURCHASE OF ACADEMIC DEGREES BY BRIBING
EXPOSED; TEACHER’S UNION CHAIRMAN ADMITS MISTAKE. Investigations are on into the scandal involving the purchase
of academic degrees by tens of educators, public sector employees, members of
the police force and the army from several universities, to benefit from
salary increases and promotions. Avraham Ben-Shabbat, Chairman of Histadrut
Teacher’s
Jerusalem, WIFE SAYS GOVERNMENT OFFERED POLLARD $2 MILLION. Jonathan Pollard is a former US Navy intelligence analyst, who was arrested in the US in 1985 for spying for Israel. Pollard has already served 16 years of a life sentence for espionage. Now, according to his wife, Esther, the government of Israel has offered Pollard nearly $2 million to relieve Israel of its responsibility to seek his release. The offer, made by an unnamed Israeli official during a recent prison meeting, was rejected by Pollard. "My husband is being treated like a piece of meat, bought or sold alive," Esther Pollard said. (Source: The Jerusalem Post, November 27, 2001, summary by Pavlidis George). BANK
LEUMI LINKED TO MONEY LAUNDERING. The Swiss regulatory Federal Banking
Commission ordered the dismissal of the manager of the Swiss branch of Bank
Leumi (Israel) for violating money-laundering laws in accepting funds linked
to former Peruvian spy chief Vladimiro Montesinos. The banking commission
said it had found "significant shortcomings with Bank Leumi le-Israel
Ltd. in opening banking relationships with politically exposed persons."
"The bank did not exercise due diligence with regard to Montesinos. Despite
significant amounts deposited and indication of activities in arms dealing,
it did not investigate any further," added the commission's report.
(Source: The Jerusalem Post, November 13, 2001, summary by Pavlidis George).
NATIONAL FRAUD UNIT SWOOPS DOWN ON SHARON’S ELECTION FUNDING ANOMALIES- FINE TO THE TUNE OF NIS 600,000 LEVIED. National Fraud Unit investigators searched the offices of Advocate Dov Weissglass, who is the attorney of Prime Minister Ariel Sharon and the police confiscated documents related to Sharon’s election run last year. State Comptroller and Public Complaints Commissioner, Eliezer Goldberg, has said in a report that Sharon’s team, including the Prime Minister’s son Omri Sharon, raised funds for the election run in an illegal manner. Goldberg mentioned in his report that the funds came mainly from the Annex Research Company, whose shares were owned by four US residents, ever since the transfer of the shares happened in June 1999 after Ehud Barak’s election victory, and that Omri Sharon was the main controller of the Annex’s expenses. Since the election fund of NIS6.1 million came into Israel from abroad it is considered illegal funds. Moreover, Omri Sharon and the appointed CEO of Annex refused to clarify on the funds and sources of financing related to Annex on grounds that it might incriminate them. Goldberg has levied a fine for Annex’s illegal activities. (Globes – Israel’s Business Arena, October 25, 2001, summary by Aruna Balakrishnan). CALLS FOR MAYOR OF JERUSALEM TO QUIT OVER CORRUPTION Opposition party and city council members, Yosef (Pepe) Allu, Meretz Party, and Ron Wolf, Jerusalem-Now Party, have demanded Ehud Olmert, Mayor, resign his position for his part in neglecting the handling of the corruption-scarred building regulations department. The collapse of the Versailles Hall was due to the facility’s entrepreneurs wresting exemptions and altering the building’s original designation; the municipal department’s non-enforcement of the establishment’s owners’ requirement to operate with a bona fide permit; the municipality treasury’s inability to coax payment of city taxes and water bills, and non-execution of order to all regional council heads to at least visually inspect Palkal system structures in their jurisdiction. Ra’ad Nashashibi, building inspector in the Talpiot industrial zone, testified at a January, 2001 trial of former departmental director, Dudu Biton, that he lined his pockets with bribes during his career. Nashashibi received a six-month prison sentence and time in mandatory public service in return for testifying against his former work colleagues. The corruption-plagued construction regulation department has ignored reports of dishonest building inspectors, widespread neglect of building infractions, disappeared inspection reports, and total contempt for the law. Proposed toughened-up standards for building regulation were never put into effect, therefore safety of Talpiot area facilities has never been upgraded. (Ha’aretz News, May 27, 2001, summary by Marg Reynolds).
NETANYAHU
CLEARED OF CORRUPTION CHARGES. Israel's Attorney General cleared Benjamin
Netanyahu, former Prime Minister of Israel, of corruption charges. In his
22-page written opinion, Attorney General Elyakim Rubinstein said that he
doubted there was enough evidence for the charges. "I have decided to
close the file against Mr. Netanyahu on the allegations against him due to a
lack of sufficient evidence necessary to put him on criminal trial,"
Rubinstein said. The peace process between Palestinians and the Government of
Israel was severely strained during Netanyahu's term as prime minister (1996
-1999). Palestinian officials didn't comment the possibility of a Netanyahu
return, saying it was "an internal issue." (Source: New York Daily
News, September 28, 2000, summary by Pavlidis George). JERUSALEM,
THE DREAM AND THE NIGHTMARE. Yasser Arafat Palestinian Authority runs
a government of tyranny and corruption.
Abdel Satter Kassem a professor of political science at Najah University
was imprisoned after putting his name
on a petition to stand against the tyranny and corruption of Palestinian
government. Journalists can not write
freely about the government because their stories will not get
published. According to Rawya
Shawa a member of the Palestinian
Legislative Council the Israeli government remits to the Palestinian
Authority around $500 million per year coming from the proceeds of duties taxes and wage deductions paid by
Palestinians to Israeli. This money
does not go to the state budget, it is deposited in a black box alone with
the proceeds of the Authority’s monopoly control of oil. According to Ms. Shawa the black box
contains around $4 billion which Mr. Arafat uses as he considers necessary.
(The Wall Street Journal Europe, September 20, 2000, summary by Maritza
Rosado). FORMER MINISTER
JAILED FOR ACCEPTING BRIBES Arieh Deri, the founder of a party of the
dispossessed who rose to the status of kingmaker and a crucial peace talks
player, went to jail Sunday, swearing his three-year sentence for bribetaking
would bring a religious revolution. Thousands of Deri´s followers accompanied
him to prison gates, where they compared him to Nelson Mandela, biblical
Joseph betrayed by his brothers and Jewish martyrs who swore their allegiance
to holy writ while they burned on pyres. Deri, 41, called on his followers to
continue his work bringing poor Jews of Middle Eastern background over to the
strict Orthodoxy that the Shas party espouses. Under that platform, Shas has
increased its power from four seats in parliament in 1984, when it was
established, to 17 today. It is now the third largest party. He predicted his
jail stay would galvanize the movement, and led a chant of a toll-free number
set up to take calls from followers reporting secular Jews. Shas activists
would then reach out to the nonbelievers. ``He is innocent!´´ his followers
chanted along in a parking lot outside Nitzan Prison, just east of Tel Aviv.
Some wept, others fainted. Turnout was far lower than organizers had
anticipated - about 20,000 people instead of the touted hundreds of
thousands. Last week, activists had gleefully warned of ``hours´´ of rioting;
the rally broke up as soon as Deri left the stage. Some blamed police for blocking supporters from arriving.
Government officials dismissed the claims, and said the numbers reflected the
drop in Deri´s popularity following his resignation from the party last year,
after his conviction. ``People don´t like to identify with a criminal,´´
Justice Minister Yossi Beilin told Israel television. While it had nothing to
do with the sentencing, Prime Minister Ehud Barak´s government was a favorite
target at the rally. Barak has become unpopular with Shas supporters because
of his recent declaration that he would introduce a secular constitution to
Israel, undermining rabbinical authority in areas of marriage and divorce. On
Sunday, Barak further enraged Shas legislators when his Cabinet voted to
dismantle the Religious Affairs Ministry. Barak says the
ministry - most recently held by Shas - has become a bloated bureaucracy
aimed mainly at keeping party activists employed. Parliament, which is in
recess until October, must approve the move. Throughout the day Sunday, two
police were injured in clashes, police said, and three Shas activists were
detained for throwing stones - a blotter that pales in comparison to other
demonstrations in this protest-intensive country. The protest highlight
emerged not from Deri supporters, but from a daredevil paraglider who floated
above the crowd bearing the slogan ``Number One Thief´´ on his wings,
prompting lusty boos from the crowd. Shas leaders seemed ambivalent about
showing support for Deri. Rabbi Ovadiah Yosef, the party´s spiritual leader -
once Deri´s mentor - barely looked at Deri and spoke only briefly and then to
urge the crowd to behave. He left quickly, before Deri spoke. Deri´s
successor as party political leader, Eli Yishai, did not even speak, instead
sitting stone-faced, surrounded by security guards assigned him a few months
ago when he began getting death threats for not voicing enough support for
Deri. It was a pronounced changed from when Deri entered politics in 1984.
Barely in his 20s, he was seen as a brilliant young star who strove to
reconcile religious and secular Jews, as well as Sephardic Jews of Middle
Eastern origin who had been neglected by the state for years with the
European Jewish establishment. With an ever-ready smile, he was a novelty: a
handsome young spokesman for a sector most Israelis regarded with suspicion.
Most significantly, he nudged Yosef into issuing a groundbreaking religious
ruling that said saving lives was more important than keeping territory. For
the first time, advocates of talks with the Palestinians had religious
ammunition. The prospect of handing over territory rove the nation, and after
the 1992 elections Deri´s Shas - now kingmaker - crowned the dovish Yitzhak
Rabin prime minister, setting the stage for the Oslo accords. That same year,
Deri was indicted for accepting bribes from contractors for favorable
treatment while he was interior minister. He was finally sentenced in a lower
court only in 1999. He appealed to
the Supreme Court, and this year it reduced his sentence from four years to
three Some in Shas, including Yosef, blamed Deri for drawing out the process
through his refusal to cooperate with the police. Yosef also believed Deri was cultivating a personality
movement; his conviction became the centerpiece of last year´s elections. AOL
News (AP), Sept. 3, 2000 http://www.aol.com Netanyu, the
former prime minister was questioned by the police to check if he accepted
gifts and bribes, misused funds etc. (NYT. Feb 21, 2k, p. A2). Israel is seen as paradise for money
laundering since it is not illegal to bank or spend illicit proceeds. An
Egyptian said Israel has “Childish fear of Corruption.” The fear has caused
many powerful people including former Prime Ministers, President Ezer
Weizmann, Jerusalem Mayor Ehud Olmert, former Justice Minister Tsahi Hanegbi,
etc. However, it is this fear of
corruption that makes Israel a first world country according to Hillel
Halkin’s article. (WSJ, Mar 29, 2K, p. A22). President Ezer
Weizman, 75, allegedly accepted $400,000 from a French investor Edward
Seroussi, a Sudanese born jew during 1985 to 1993. However, prosecution is not recommended. Mr. Seroussi also paid
$800,000 to pay off debts for a political party Mr. Weizman tried to create
in 1988. (NYT, Apr 7, 2K, p. A12). Mr. Barak focused
single-mindedly on the vain hope of achieving a swift resolution of the
intractable and complex Israeli-Arab conflict. But Arab intransigence dashed
his high hopes, while his coalition is plagued by internal dissention,
paralysis and widespread allegations of corruption. There is a way for Mr.
Barak, who usually lands on his feet, to turn this adversity into advantage
Israel's corruption problems are no different, essentially, from those of
most democracies, especially with a strong socialist or statist background.
In Israel, as in Spain, Italy, France or Germany, state intervention in the
economy has created a cozy, corrupting relationship between money and power.
Israel differs only in degree. Despite several reforms, the public sector
still consumes 53.2% of GDP, and employs every third person. Government owns
over90% of land (by releasing it to favorites, it creates billionaires
overnight) and much more. While the biggest Israeli bank Ha'poalim was sold
to private owners, it still controls most savings, illustrating how
"privatization" has increased concentration of economic and
political power. (WSJ, International Commentary, May 23, 2000). JERUSALEM -- Israeli Court Orders Jailing
of Party Chief in Bribe Case. The Supreme Court ruled today that the
once-powerful leader of the strictly Orthodox Shas Party, Aryeh Deri, should
be jailed for three years, upholding his conviction for bribery and fraud.
(New York Times, July 12th, 2000).
Israel: Arieh Déri, ex-chef of the Shass party, will be imprisoned in
September (Le Monde Interactif, 25.8.00,
http://www.lemonde.fr/article/0,2320,seq-2037-88868-QUO,00.html) Headline,
25-AUGUST-2000, Link may not work after a few days. PAYMENTS ETHIC DECLINE, MORE CHECKS BOUNCED http://support.casals.com/aaaflash1/busca.asp?ID_AAAControl=2983Israel´s Business Arena http://www.globes.co.il Inside Israel - investigative news source exposing corruption. http://www.virtual.co.il/business/inside/
The Index of Economic Freedom (by Driscoll-Holmes-Kirkpatrick) for 2001 places Sri Israel in the “Mostly Free” category with a rank of 54 (Ranks range from 1 for Hong Kong to 155 for North Korea, Wall Street Journal, Nov. 1, 2000). H. D. Vinod’s trimmed correlation analysis indicates that countries free from economic regulation are less corrupt. After allowing for some exceptions by 20% trimming, the correlation is near 0.9. |
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Design:
Theo den Brinker |
Copyright:
Hrishikesh D. Vinod 2000 |
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