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The Bank of Israel is not just another bank. It is the economic and moral compass of the Israeli economy. The holy of holies of the public and private sector. It must warn of economic injustice and act to correct it. The central bank must be trustworthy, transparent and honest - an ethical institution of the highest level.

Recently the bank published research recommending the cancellation of the "car maintenance" payments many workers receive, and replacing them with a salary increase. The argument was that such "car maintenance" payments force some workers to buy a car even though they do not really need one. The change would reduce the number of cars on the road by some 20,000, which would also be good for the environment: less pollution, less traffic and fewer accidents.

Could there be a better recommendation?

The Bank of Israel pays car expenses to all its employees. And not just maintenance, but maintenance deluxe. Anyone defined as serving in a postion as a "required official" is entitled to receive 100 percent reimbursement for all their car expenses, however much that might be. Bank of Israel employees are granted a kilometrage quota well above that accepted in the civil service, and they are allowed to receive "reimbursement for trips made in the line of duty" in addition to their regular car expenses. In other words, double payment for the same expense.

And what happens if an employee does not own a car, or does not even have a driver's license? The central bank has solved that problem, too. They have granted such employees reimbursement for "expenses" at half the rate of those who have a car - the Bank of Israel's version of a con job.

It should be clear that the story does not end with just the car expenses payments. For many years the bank's workers organized for themselves, with the full cooperation of the management - which also received the same agreed upon benefits - dozens of payments and deals that greatly increased their pay and put them at the top of the public wage scale, even higher than the workers at the electric company and the ports.

The Bank of Israel also specialized in improving the already eye-popping retirement benefits of its senior officials. They received a promotion of two additional salary grades upon retirement, instead of the one granted to most civil servants; three months of paid leave to acclimate to retirement; three different types of additional vacations; reimbursement for unused sick days; and a fictitious enlargement of the number of years of seniority based on the employee's health, their spouse's health or just to "encourage retirement."

This is how they carried out an elegant robbery of the public purse.

After a long, drawn-out battle that took years, the bank signed a new wage agreement in December 2007, which slightly cut these corrupt terms. But the Bank of Israel does not see any reason to follow the law. Recently it was decided to compensate the bank's senior employees for the slight clipping of their outrageous conditions - because how can they make ends meet on only NIS 40,000 a month?

True, they make more money than the director general of the treasury, who only makes NIS 32,000 a month; and more than a cabinet minister, at NIS 36,000. But who are these people in comparison to a Bank of Israel senior official?

The latest invention is the brainchild of Raphael "Rafi" Lankri, the head of the Human Resources and Administration Department and the former head of the bank's union, who is also a close confidant of the bank's governor, Stanley Fischer. Lankri, as a powerful figure at the bank, knows all the corrupt agreements better than anyone else. And now he is the leading candidate for the post of director general of the central bank - an appointment that must not be allowed to happen.

Lankri invented new rules for promotions, which shorten the period of time an employee needs to wait between pay grades - and every increase in grade means thousands of shekels more each month. It is also obvious that such raises are later included in the state-funded budgetary pensions veteran retirees will receive, without any need to contribute from their own paychecks. So the total cost of these promotions will be in the hundreds of thousands, if not millions, of shekels for each worker.

The Bank of Israel also did not take the trouble to notify the Finance Ministry's wages director, Eli Cohen, of its new promotion rules. The bank continues to ignore Cohen even though he is legally responsible for supervising the bank. The Bank of Israel has gone even further and refused to show Cohen the wage agreement it recently signed with its newly appointed general counsel, Dita Shamir, despite Cohen's repeated requests to receive the contract.

The new Bank of Israel Law, which Fischer is pushing, contains a clause removing the bank from the treasury's supervision. If this clause passes, the bank will no longer be required to receive approval from the ministry's wages director, or from the finance minister for any changes in wages.

The bank is proposing instead the establishment of a public council, to which it will then report. The council will include respected members of our economic elite, on whom a few tens of thousands of shekels a month do not make much of an impression. They will not have any budgetary limitations, and they will approve everything easily. After all, why should they not be nice to the governor and other senior officials? It's not their money, is it?

We can see what happens to behavioral norms, morals and honesty when an institution operates without effective supervision and without budgetary constraints. It is likely to be infected by corruption and immorality.