Accountant General accuses Kadima of corruption in local government - Haaretz

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Last update - 07:23 25/09/2007

Accountant General accuses Kadima of corruption in local government

By Moti Bassok, Haaretz Correspondent

Yaron Zelekha set another snarling cat among Israel's political pigeons Monday by alleging corruption involving officials from Kadima, the ruling party.

The accountant general charged that local governments run by Kadima officials got preferential treatment from the Interior Ministry when it was run by Roni Bar-On, who is today the finance minister. Specifically, the preferential treatment involved inflated "rehabilitation" (restructuring) payments, according to Zelekha.

Deputy Attorney General Sarit Dana told Zelekha Monday that she had checked the grants transferred to local authorities and found no truth in his claims that Interior treated certain local governments preferentially.

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In response, Zelekha wrote to Attorney General Menachem Mazuz and attacked his office's procedures: "It is not clear based on what auditing procedures the inspection was conducted, but it is doubtful whether they would have met any accepted norms of auditing," he wrote.

The furor actually began last week, when Zelekha first complained to Mazuz, and reportedly involved not only Bar-On but his predecessor at the Finance Ministry, Abraham Hirchson.

In his initial complaint, Zelekha alleged that a year and a half ago, Bar-On, then interior minister, and Hirchson transferred inflated "rehabilitation" payments to local authorities that were headed by Kadima party members. Bar-On discriminated against other
local authorities, such as those headed by Likud people, Zelekha charged.

Bar-On's office responded to the allegations with fury, denying all and saying it was a shame that the accountant general was trying to leave scorched earth behind when he goes. (Zelekha's contract runs out in October, and Bar-On has stated that he will not extend it. Zelekha says he will fight his ouster and has a legal opinion that his treasury position is not subject to fixed terms of office, and therefore, as long as his professional functioning is satisfactory, he should remain.)

Bar-On's office also said that during his stint as interior minister, the ministry had taken radical steps to restructure local government, making it more viable. Bar-On never related to the political affiliation of a city's leaders, his office stated; his actions were based on objective criteria.

The government had budgeted NIS 300 million to help bankrupt or floundering municipalities weather their ills and begin recovery programs. Zelekha charged that one local authority in the north, led by a person identified with Kadima, was granted 11 times the support it should have. Zelekha refused to transfer the money, he said,
arguing that the accountant general's office could not operate in a criteria "vacuum."

Zelekha's refusal to transfer money without criteria exacerbated the ill-will that already existed between himself and Hirchson, then the finance minister. At the end of the day, the criteria were presented to him and Zelekha was forced to transfer the money.

Monday, Dana, the deputy attorney general, advised Zelekha by letter that she had looked into his complaint and found it to be baseless. In her letter, copies of which were sent to a long list of addressees, Dana also noted that on Sunday, a meeting had been held at Zelekha's office in the presence of all the bodies involved in handing government aid over to local authorities, including representatives of the Interior Ministry, the treasury's budget department and even the accountant general.

At the meeting, the Interior Ministry's auditor, Oshik Ben-Atar (who is directly subordinate to Zelekha), stated that his inspection of money transfers to 27 local authorities, out of 48 for which money was approved, found possible deviations from the criteria.

But representatives of the Interior Ministry rejected his claim, saying that in the two days prior to the meeting, their own officials had inspected all 27 of those local authorities, and found no irregularities.

Meanwhile, state assistance for 11 other local authorities is being held up by the dispute, and Dana argued that since no problems have been found so far, the money should be paid without further delay.

"No irregularities whatsoever were found in the in-depth inspection carried out into the allocations to the 11 local authorities in question," Dana wrote to Zelekha. "The explanations presented to me by the Interior Ministry officials demonstrate that the ministry's decisions were based on work by the ministry's professional echelons. They
were based on recommendations and relied on substantive considerations.

"Given the nature of the explanations offered by the Interior Ministry about the 11 local authorities, I find no reason to continue our inspection regarding the other local authorities," her letter continued. She therefore recommended that the money be transferred right after the Sukkot holiday.

In response, Zelekha wrote to Mazuz that rehabilitation agreements had been signed with 48 local authorities, which could be divided into three groups. One consists of 18 local authorities about which Interior has been blocking information since learning that Zelekha was on the prowl.

The second comprises 19 local authorities with signed rehabilitation agreements that are currently being implemented. Those are the ones on which the complaints focus (the list includes Kiryat Malachi, Alfei Menashe, Yavniel, Kiryat Bialik and others).

A third group is the 11, for which plans have recently been prepared, but which are on ice at Zelekha's order so that the plans can be inspected for compliance with known criteria.

Although discussions about the criteria have been taking place for a year and a half now, Zelekha said, he was only presented with the list on August 26, 2007. When he compared the criteria with actual allocations to both the 19 and the 11, serious deviations were evident. These discrepancies "raise question marks about the process of resource allocation to the local authorities in general, as it is clear that the
criteria were not the only parameter dictating the allocations," he wrote.

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