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Four years ago, the CEO of Clal Insurance, Rimon Ben Shaul, was one of the first supporters of a plea bargain deal for his conviction as part of an insurance cartel. When asked about this in a newspaper interview, Ben Shaul said: "I'm not ready to pay the emotional and family price of a five-year trial. Therefore, I signed the plea bargain." Ben Shaul was also the first one among those convicted who resigned from his position in the insurance industry when the convicted insurance executives began to contest the Insurance Supervisor's demand that they step down from their posts. Immediately upon his resignation, Ben Shaul was named the CEO of Clal Industries and had a good term in this office that helped make people forget about his involvement in the insurance affair. Ben Shaul now heads the Koonras Technologies investment company, which is part of the Shrem group. The punishment he received then (a one-year suspended sentence and NIS 300,000 fine) has been forgotten and he can return to any position in the insurance industry if he so chooses.

On the other hand, Dr. Itamar Borovich, who was the CEO of The Israel Phoenix Assurance Co. during the cartel period, and Levy and Noga Rahmani, who still manage the Ayalon insurance company, thought differently. They refused to sign the plea bargain deal and chose to go to trial. The Jerusalem District Court yesterday convicted them of a series of violations and monopolistic actions in the fields of auto, home and commercial insurance. Ayalon and its managers were also convicted of restrictive practices in the field of heavy engineering equipment. Sentencing hearings are scheduled to begin in February 2002.

What messages are inherent in the different approaches of Ben Shaul and Borovich, and Borovich and Rahmani? A final conclusion can only be made after the latter receive their sentences, but it can already be surmised that the delay did not work to their advantage: It's reasonable to expect that the prosecution will demand harsher punishment than that meted out to the executives who signed on to the plea bargain. The prosecution has great interest in demonstrating that a delay does not serve the interests of the accused. By this it hopes to encourage defendants to agree to plea bargains and thus save the need for unending court proceedings. This is the first message.

The second message is that if a defendant does not sign on to a plea bargain, he may be tried on more serious charges. For example, The Phoenix and Ayalon were convicted of fixing prices and discounts in the car insurance field, while this count was dropped from the plea bargain arrangement.

The third message is the most important of all. The trial of The Phoenix and Ayalon demonstrated that the cartel caused real damage to policyholders, contrary to the assurances of the insurance firms. A plea bargain prevents a thorough and exhaustive discussion of the matter and enables the guilty parties to soften the charge sheet.

In the case of a cartel, the managers convicted under the plea bargain arrangement claimed that there was no proof that policyholders suffered any harm. For some reason, the state prosecution decided not to insert a declaration of this sort in the plea bargain, so the cartel convicts have since been free to cite this fact as indisputable proof that no harm was caused to the public by their restrictive practices.

Judge David Cheshin ruled that Ayalon "significantly profited from the cartel and flourished due to its existence." And here he concluded discussion on the question of harm caused to the public. Policyholders who were harmed apparently cannot benefit from this ruling, because the statute of limitations prevents them from submitting a class action suit.