They wail constantly about a lack of governance. That officials have too much power. But when the time comes to make unpleasant and unpopular decisions that are in the national interest, the prime minister and his ministers disappear. They fade from view, and leave the officials to deal with the pressure groups and the damage. This week, the beneficiaries of the anarchy were the police, prison warders, Mossad and ISA pensioners, and, not to be compared, tax evaders and money launderers. The State of Israel "gained" international ignominy, and the public purse was plundered for NIS 7 billion. But who cares?
"A huge disgrace for the country," said State Revenues Supervisor Frieda Israeli. The representatives of the Ministry of Finance, the Ministry of Justice and the Israel Tax Authority sat in the Knesset Finance Committee and tore their hair out in frustration. For a year now they have been trying to get through the committee the rules that will make possible exchange of information on suspect bank accounts between the Israel Tax Authority and its overseas counterparts. Israel gave its commitment, a hundred or so countries have already ratified them, but the rules failed to pass. Why? Because the managers of the charity funds instructed Finance Committee chairman Moshe Gafni (United Torah Judaism) to block the legislation at all costs.
The charity funds are a two-faced beast: on the one hand, an admirable social institution that helps the needy; on the other hand, a shadowy banking system that turns over billions and acts outside the law, without control or supervision, a channel for money laundering and tax evasion that flourishes and prospers under the closed eye of the Supervisor of Banks. In a country that presents itself as advanced and Western.
The whole problem arises because the charity funds fear to look after the money themselves, and transfer it to accounts they open in legitimate banks. The banks are supposed demand disclosure of the source of the money, but a temporary arrangement was put together for the charity funds designating them as "public benefit institutions" that are exempt from disclosure. That arrangement is due to expire in August, and Gafni wants to anchor it in legislation. A law that will legitimize lawless, criminal behavior. Moreover, Gafni is furious at banks that fear criminal proceedings (under the Money Laundering Prohibition Law) and refuse to work with the charity funds unless they report the sources of their money. Gafni is demanding sanctions in the law so that these wayward banks that are not prepared to take responsibility for the charity funds shady dealings can be punished.
OECD Secretary General Angel Gurría sent warning letters to the prime minister and the minister of finance - in vain. Netanyahu and Kahlon are prepared to bear international disgrace, just not to have to confront Gafni and the haredim. Not a single coalition Knesset member came to the Finance Committee session this week to defend the country's honor. MK Mickey Levy (Yesh Atid) was the only one who tried to appeal to Gafni's better nature. "This story will cause the country huge damage, let me deal with it," he said. It turns out that there are righteous people even in the Knesset.
What's NIS 7 billion?
In an another episode, the lack of governance by the prime minister and his ministers came with a price tag. This week, the National Labor Court dismissed the state's appeal against the ruling obliging it to pay a wage supplement "for absence of employment stability" to police officers, prison warders and Mossad and ISA pensioners. This supplement was awarded to the IDF in 2006 in exchange for its agreement to lay off thousands of career personnel. Unlike in the IDF, employees can’t be laid off from the police, the prison service, the Mossad or the ISA, and there is therefore no logical reason to extend the supplement to them, but what can be done when salaries are linked to those in the career army? The cost of the supplementary payment backdated to 2006 is NIS 7 billion, to which should be added the annual cost henceforth of NIS 700 million. Where will the money come from? The only option is an across the board spending cut. Less to education, less to health, less to welfare, less to the weak.
Ministry of Finance officials are convinced that the court ruling could have been avoided. The government only had to decide that although the payment is automatic, it is paid in the pension. That would have led to rejection of the appeal and would have saved the crazy payments. But Minister of Public Security Gilad Erdan refused to cooperate, the prime minister did not intervene, and the government did not discuss the matter. Why should they quarrel with the police and the prison officers? Let Kahlon worry about the NIS 7 billion budget hole.
Published by Globes [online], Israel business news - www.globes-online.com - on June 28, 2018
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