The police's recommendation to indict Ephraim Gross and Zvi Tadmor - Ben-Zion Ben-Shoshan seems to have only been acting on their orders - did not surprise anyone who is involved in events surrounding the Bank of Israel.

On November 21, 2005, in an affidavit submitted to the Jerusalem Labor Court, bank director general Yaakov Danon wrote that the central bank had for years knowingly passed on incorrect annual reports on wages at the bank to the treasury's wages director.

The affidavit also stated that the head of the bank's finance unit, Esti Schwartz, had notified Gross and Tadmor that the annual salary reports were incorrect.

	Advertisement

When the Bank of Israel was founded at the end of 1954, it was decided that the bank's employees would enjoy higher wages than those of other public-sector workers.

But the bank's workers - and management - were not satisfied with the gap in pay in their favor. For years they managed to find ways to make more - both above and below board - including various and sundry benefits and bonuses, many of them illegal.

They exploited the fact that the Bank of Israel, like the Knesset and the State Comptroller's Office, were almost completely independent in setting its own wages. And they took very good advantage of the fact that over the years the various wage directors in the treasury never took much of an interest in what was happening at the central bank.

The situation only changed in 1999 when Yuval Rachlevsky was appointed as the Finance Ministry's wages director. Rachlevsky took quite an interest in what was going on at the bank, and the more he found out, the more he discovered the corruption permeating the place.

Since the wages director started publishing an annual report in 1992 on salaries in public-sector bodies, the Bank of Israel has also been required to report on its salaries to the treasury. And that is how the public discovered the outrageous salaries at the bank.

A thorough investigation by Rachlevsky - and even more so internal leaks - exposed that the bank's workers received in addition to incredible salaries other benefits and bonuses that are unacceptable in the public sector.

This is where the story of Gross and Tadmor begins. They did everything in their power to keep the public from knowing about these benefits, and bank employees cooperated.

It seems - and the truth will come out at the trial if they actually are brought to court - that the reports to the treasury did not include some of the benefits. It may be because they thought that such monetary benefits were not pay.