When Avraham Katz-Oz became chairman of the national lottery, Mifal Hapayis, a ticking bomb was waiting for him in the form of the legendary pension granted to his predecessor, Gideon Gadot. But Katz-Oz preferred to ignore the problem in the hope it would go away. When then attorney general Michael Ben-Yair pressed him to deal with the issue, Katz-Oz rejected the attorney general's recommendations, saying, "the pension was legally approved and I didn't come here to become my predecessor's hangman."
Amazingly similar things were said by the heads of Bank Leumi in 1987, when Ha'aretz reported on Ernst Japhet's equally legendary pension: "It was legally approved by the board of directors and cannot be changed." But public pressure forced them to reverse their position and file suit against Japhet, and the "legally approved" pension was cut dramatically.
In September 1997, Ha'aretz got its hands on the details of Gadot's pension and made the numbers public: NIS 46,000 a month, in addition to a one-time payment of NIS 875,000. The pension began to be paid the minute he retired at age 55. It was calculated on the basis of accrued rights of 6 percent(!) a year and included "overtime," 13th- and 14th-month salaries and all sorts of other inventions that inflated it to an insane amount. The accounting also included the years when Gadot was an MK and did not even receive a salary from Mifal Hapayis. For a perspective on the amount of money involved, an MK's salary at the time was NIS 22,000 a month and a minister's was NIS 24,000 a month. So how could the Mifal Hapayis board have authorized such enormous sums?
It did not take long for a public outcry to begin, demanding that the pension be reduced to a logical sum. Katz-Oz continued to insist, "I do not intend to initiate a change in the pension." But the public pressure mounted until he decided to establish the Amnon Zichroni committee, which examined the case and recommended that the pension be cut. Instead of NIS 46,000 a month, Gadot would get only NIS 5,000 a month. Instead of a one-time payment of NIS 875,000, he would get NIS 221,000.
The entire affair could have been brought to a successful conclusion at that point. Katz-Oz could have implemented Zichroni's recommendations, and justice would have been served. But Katz-Oz decided to hand the decision over to the chairman of Mifal Hapayis's public committee, Justice Meir Shamgar. Shamgar accepted all of the Zichroni recommendations and ruled that the pension was an extreme deviation from accepted norms and that the entire arrangement should be canceled. Nonetheless, he decided, "it would be inappropriate" for Mifal Hapayis to cancel it; instead, it should ask a court to reduce the pension.
The justice therefore displayed insensitivity to public funds. Leumi decided on its own that Japhet's pension should be cut and only afterward went to the courts. Shamgar knew that the courts work very slowly - and indeed, that is what happened. In 1998, Mifal Hapayis filed a suit against Gadot, Elitzur Goren and Rachel Gueta, and since then the case has been proceeding at a turtle's pace. Nobody is in a hurry. It is public money, after all. Judge Varda Vyret-Livne of the Labor Court has all the time in the world. She lets the sides speak for as long as they want, ask as many questions as they want and bring as many expert witnesses as they want. The defendants know how to exploit that effectively. Between one set of hearings and the next, half a year can go by. And after five years of hearings, there is no end in sight. Furthermore, whatever that court rules can be appealed to a higher court.
Thus despite the enormous unfairness of it all, and despite the corruption, Mifal Hapayis continues to pay Gadot his pension, which today totals some NIS 62,000 a month - twice the salary of a minister, MK or ministry director-general.
Katz-Oz is uncomfortable with the nonresolution of the problem. Now he is trying to speed up the legal process, and admits that he was wrong. He says that he should have cut the pension upon receiving the Zichroni report. He also fears that the new chairman of Mifal Hapayis, who takes up the position this coming July, will not be very interested in the affair. Thus
it could simply fade away, with Gadot continuing to receive his pension until the age of 120. If that happens, it will be a terrific lesson for the public in management, ethics and the law.
The lengthy proceedings in our court system trample over the rule of law and give a prize to criminals. Such an important trial should have taken five months, not five years - and still without an end in sight. Thus the deterrent and educational effects have both been lost - because in a state where the wheels of justice turn so slowly, they turn justice into injustice.
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