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The ingrained, unthinking nepotism at Israel's government companies is one of the worst ills in Israel's culture of labor. In this respect we are just another third-world country, where tenders for cushy jobs are published purely for formal reasons of protocol, but actual hiring depends on contacts.

It is true that the state comptroller didn't quantify the accrued damage caused by nepotism. Indeed, how can you calculate the damage caused by a division manager at some port who covered for a forklift operator who happened to be his cousin, after the operator happened to ruin the forklift because he had no clue how to operate the machine and hadn't been trained? The damage in a case like that is a chain: the forklift breaks down and cargo cannot be loaded and unloaded, which hurts importers and exporters, and so on.

Nepotism, which flows beyond blood relatives to friends as well, isn't confined to the powerful unions and veteran workers. It touches the very Histadrut labor federation itself, one of whose leaders recently got his son a plum job at Haifa Port. It isn't only unions: management is involved.

The general managers and board chairmen at the government companies don't want to confront the unions, which remain as powerful as they ever were despite the best efforts and reforms of finance minister Benjamin Netanyahu.

Reform of the ports? The chairman of the Transport Workers Union at Haifa Port is one Meir Turgeman. He's practically omnipotent at the port. With a snap of his fingers he can cause one person to be hired and another to be fired. The status of the union chairman at Ashdod Port, Alon Hassan, is practically the same as that of the general manager, Shuki Sagis.

Got it. How about structural changes at the Mekorot water utility? The one who will make it happen, or not, is Meir Elezra, the eternal labor committee chairman. Moving onto the Israel Electric Corporation, the union chairman is Ziko Zarfati; and at Israel Post it's Reuven Karazi, both of whom sound belligerent enough, but in practice they actually run the company as much as, if not more than, the appointed management.

Is that necessarily a bad thing? It is, insofar as favoring relatives and friends is concerned. But there's an upside to the unions power, too. They have become an integral part of the management backbone at the government companies and they are management's address when labor relations take a rocky turn.

The establishment of the unions also gives them the feeling of shared responsibility for the company's future. The unions of today, unlike the unions of yore, don't rush to call strikes. They know that when systems collapse, they, too, will founder.