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This is the story of a senior Israel Defense Forces officer, who at the end of 36 years service in the military was given a pre-release vacation - nine months at full pay, within the limitations of active service. After one month, he changed his mind, and decided to end his military service that very day. The head of the army's retirement division let the officer in on a secret "custom": If an officer urgently wants to end his service within the first 10 days of any given month, the facts are rewritten, false data is entered into the computer and the release date is recorded as the end of the previous month, thereby bypassing pensions regulations and allowing the officer to earn thousands of extra shekels.

For this particular officers, the "custom" was bent a little more, because it was already the 11th of the month, but what does one more day matter, or one day less, the main thing is that the army continues to raid the national coffers. This scandal would not have been exposed, nor the custom outlawed, had the officer's appetite not grown beyond proportion, turning his act of acrobatic accounting into a very flimsy excuse for trying to get elected to the Knesset without the requisite cooling-off period.

Last summer, after three years of wriggling, the officer - Lt.-Gen. Shaul Mofaz - finally succumbed to the pressure of one stubborn man, attorney Amnon Lord, and paid the NIS 12,000 back into the defense budget. The Military Advocate General's office, which is the product of the environment in which it exists, found that there was no legal need to demand that Mofaz and 180 other officers return the money they were paid. But Mofaz understood - at a very late stage - that moral and public calculations also carry a certain weight. Mofaz the retiree benefited from a gross deviation from the law; Mofaz the cabinet minister is responsible for ensuring that this benefit is not overly bloated, since that would cause a strain on the IDF's already stretched resources.

Struggles over power, authority and finances between the Defense Ministry and the IDF have been going on since the 1950s and 1960s, when deputy minister Shimon Peres stood up to every chief of staff apart from Moshe Dayan. These skirmishes are now making a comeback, despite the excellent relationship between Mofaz and Dan Halutz. The chief of staff constantly reminds his political overlords that the IDF budget is not synonymous with the defense budget, but, in fact, makes up just 70 percent of it. Halutz puts the emphasis on improving efficiency in the army. He also points out that the army is experiencing a lack of funding - NIS 1.5 billion a year, to be exact - as opposed to the civilian branches of the defense establishment. Members of the General Staff complain about duplications, waste and superfluous salaried employees in the Defense Ministry.

Halutz and his deputy, Gen. Moshe Kaplinsky, are leading a revolution from the top: Halutz revealed that the IDF has far more anti-tank weapons than the enemy has tanks, and suggested that the army could live without some of these weapons and could invest in other, more relevant and up-to-date items.

Things are changing, some would say frenetically, in the various branches and divisions of the army. The Armored Corps and the Engineering Corps, for example, are going to be unified into one "attack" unit, while the Ordnance and Logistics Corps will become a single assistance division.

The revolution will not adversely affect the brigadier generals. The cuts will primarily hurt colonels, but, in the grand tradition of the IDF - and because of the character of Halutz, who finds it hard to break bad news to his subordinates - will spare the top brass. Non-serving brigadier generals, who are waiting for another chance, will not be required to quit. There is no justification for the person filling the very limited position of head of C4I holding the rank of general; the rank was a throwback to the days of Brig. Gen. Ido Nehushtan of the Air Force. The pressure to promote Meir Kalifi, a protege of Mofaz, contributed to his appointment as a second brigadier general in the ground forces, even though his equivalent in the Air Force would only be the third-ranking officer there, a squadron leader, while the No. 2 in the Air Force would be subordinate to an officer who ranks lower than Kalifi.

Despite contradictions of this type, the general direction that Halutz is taking would appear to be correct, but it should be treated with a measure of doubt as long as Mofaz is his boss. There is, for example, no methodical explanation for the expensive upgrading of officers' cars: What is good for a brigadier general is also good for a general, but only a defense minister free from his private precedents can introduce a new, decisive and modest policy - one that does away with the worship of status symbols and steers clear of excessive perks.