One of the more emotional photographs published lately in the Israeli media is that of Stanley Fischer on the day of his appointment as Governor of the Bank of Israel, proudly displaying his Israeli ID card issued by the Ministry of the Interior.
Some people do not like the idea that the man serving as governor of the Bank of Israel did not grow up or live here, considering this as a flaw in his Israeli-ness. This is not a serious argument. It contradicts everything that the Law of Return stands for. Fischer's Hebrew is also to his credit.
Some people do not like the idea that the man serving as governor of the Bank of Israel is a millionaire from the top echelons of Citigroup, a man from the global financial system who has a possibly suspicious arrangement whereby he put his shares and options into a blind trust, rather than selling them. This attitude is also baseless. Fischer has a reputation as an upright man, and his acceptance speech included several interesting comments on social issues.
The case of Jacob Frenkel
But Stanley Fischer has a delicate problem that ought to be dealt with in public. It is true that he has received an Israeli ID card, and it is possible to believe that he is proud to carry it, but he is not prepared to give up his US citizenship.
Fischer should explain, because Israel had a remarkably similar case with a previous governor of the Bank of Israel, Jacob Frenkel. In August 1991, when he held dual Israeli and US citizenship, Frenkel took over as governor of the Bank of Israel. In April 1992, "Globes" revealed that Frenkel still had US citizenship.
Frenkel said at the time that before he took up his appointment as governor, he had applied to the US State Department and Immigration and Naturalization Service (INS) to revoke his US citizenship, but that the bureaucratic procedures were delayed. In the wake of the report, Frenkel quickly completed the process of revoking his US citizenship at the US Embassy in Tel Aviv.
Should there be a difference between Frenkel and Fischer?
Foreign sovereignty
From the US perspective, Frenkel's case involved someone born in Israel, whereas Fischer was born in the British colony of Northern Rhodesia, now Zambia, and both men were granted US citizenship. A US citizen cannot be loyal to a foreign government. A person applying for US citizenship takes an oath of allegiance as part of the naturalization ceremony, during which he or she declares, "I … renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state or sovereignty..."
It should be emphasized that from Israel's perspective, neither Frenkel then nor Fischer now have any legal problem. However, the US holds that it not possible for a US citizen to receive such a senior post in a foreign government, which involves loyalty to that country. Upon taking office as governor, Frenkel understood the significance of the issue and expedited the surrender of his US passport. Fischer does not think this.
It should be noted that Prime Minister Ariel Sharon, who welcomed Fischer's appointment, personally understands the problem of dual citizenship. In 1981, as minister of defense, he sought to appoint Arie Genger as "special advisor for production and military aid and special ties", even though Genger had US citizenship at the time and insisted on keeping it. The Ministry of Defense employees' legal representative contacted then-Prime Minister Menachem Begin and showed him the US oath of allegiance. Genger's appointment was immediately dropped.
The Bach committee's arguments
The matter of Fischer's US citizenship came up in the deliberations of the Bach committee, as noted in its conclusion: "Regarding dual loyalty in the general and national sense: Prof. Fischer is about to immigrate to Israel and will ask for Israeli citizenship, while simultaneously retaining his US citizenship.
"We asked Prof. Fischer and all the other interviewees the question: Isn't there a blemish in dual citizenship? It should be noted that the law does not forbid dual citizenship in relation to the post of the governor of the Bank of Israel, but nonetheless the question remains, even if there is no violation of the law.
"The interviewees (except for Prof. Fischer) opined that, taking all the facts into consideration, including the identity of the country involved and the decision of the candidate to immigrate to Israel thanks to a worthy Zionist enthusiasm, there is no real risk in this case of a conflict of interests
"When we posed this question to Prof. Fischer, he told us that he was willing to accept Israeli citizenship, and in the event that any problem of conflict of interest arose, he would act as a loyal Israeli citizen.
"There can be legitimate differences of opinion on this question, but taking into account all the circumstances relating to the immigration of this man to Israel, as we mentioned above, there is no material flaw in this matter that would justify disqualifying the appointment of Prof. Fischer to this job."
"There are differences"
So much for the Bach committee. A senior Bank of Israel official, close to both Fischer and Frenkel, was asked on Tuesday why Frenkel acted as he did, while Fischer has acted differently, and whether they should have acted in the same way.
He replied that Frenkel represented the government of then-Prime Minister Yitzhak Shamir in negotiations for loan guarantees with the US administration, which was why he surrendered his US citizenship.
Another source tried to argue that Frenkel had emigrated from Israel and applied for US citizenship, before returning to Israel to become governor of the Bank of Israel, whereas Fischer never emigrated from Israel; on the contrary, he is immigrating.
Fischer declined to provide an explanation, either in public, or in response to an enquiry from "Globes".
Published by Globes [online], Israel business news - www.globes.co.il - on May 5, 2005