Raiders of the Lost Coffers

The public sector wages report for 2004 shows that senior bank officials comprised the top 14 spots on the list ranking government-paid wages

Years ago, when the central bank managed to prevent any peak into its dark cellars, we thought the highest paid public officials were the workers at the Electric Corps., Israel Refineries, the Airport Authority and the Ports Authority. When we criticized the "big unions" we didn't know that they couldn't stop laughing at the central bank.

For years, the central bank refused to provide the treasury with information about the wages the bank paid. David Klein, the previous bank governor, even went to the High Court of Justice to prevent exposure. Only when management changed in mid-2005 did the corrupt truth come out: Salaries are sky high and senior echelons of the bank lied when they didn't include in their calculations their retirement grants, special vacation time and days off for professional studies. This week, Attorney General Menachem Mazuz ordered a criminal investigation into the matter.

The public sector wages report for 2004 shows that senior bank officials comprised the top 14 spots on the list ranking government-paid wages. The monthly salary of the record holder, Moshe Ben Aharon, reached NIS 98,000, while the monthly wages of number 14 were NIS 75,000. Not a hand shook at the central bank when against public norms, these crazy salaries were paid, and vacation days cashed in, every month. There are about 100 strange and different wage bonuses invented by the central bank's workers' committee and management. There's not enough room here to list them all, so we chose a few examples:

The bank's workers enjoy a 13th salary per year, which is not at all prevalent in the public sector. They get an automatic 1.2 percent wage hike every year they remain on the job, compared to the norm of 1 percent. They get "a framework agreement bonus," which means between 23-34 percent in addition to their basic salary, and they get "encouragement wages," for just showing up to work. They get travel allowances and car allowances and their phone bills are covered up to 1,500 conversations a month, not to mention their cellular phone costs which are fully covered by the bank.

The bank subsidizes 70 percent of their lunches, but they also get a "lunch bonus" of NIS 850 a month. The bank invented an entirely new, 20-day month to inflate vacation and sick days as it grants special vacations for every family occasion and unusually more sick days that can be cashed in. The bank does not count Fridays and Saturdays as sick days, so the workers don't "miss out."

Workers from the rank of 11 and up (and there are 24 ranks at the bank), get 16 rest days a year, while the maximum in the public service is 13 days. The bank's schedule for the value of such rest days, meant to be spent at a spa, is 30 percent more than in the public sector. The bank gives all its workers and pensioners a "celebration grant" for family occasions, gifts for new enlistees, a Hanukkah gift and a gift on Women's Day. The rate of gift-giving is much higher than in the civil service. The bank subsidizes summer camps for employees' children, school books and 80 percent of the dental insurance premiums for employees and their families. Department heads in the bank enjoy an additional 25 percent more than the maximum grade and automatically get the benefits of a 40-year veteran of the bank no matter how long they have been there. Isn't this all corruption? They get cars from the bank, but also car allowances for about 1,000 kilometers a month, which shows up in their pay slips as something called the "equating contribution." Long live the inventiveness of the bank's economists.

Those licking most of the cream of these benefits are not only the top 10 managers but 144 people who make up 18 percent of the bank's employees. They make an average of NIS 47,000 a month, which is 40 percent more than the salary of the treasury's director general, an MK or a minister.

The seeds of this riot were sown with the bank's establishment in the 1950s, when it was decided that it would not be part of the civil service, but would enjoy tenure, a budgeted pension and the other social benefits provided by the state. In addition, the bank's management was given the authority to decide on its own how big a budget it would get and how high the wages it paid would rise - irrespective of treasury policy. And when there's no budget cap and no supervision, corruption flourishes.

Now the ball is in the hands of the bank governor, Stanley Fischer, and the bank director general, Yaakov Danon. They don't want to deal with scandals from the past and demand reimbursement from senior officials who left before the middle of 2005 - because that is more convenient for them.

Fischer and Danon don't understand the severity of the scandal and don't appreciate the impact of the outrage felt by the public after learning of the great robbery. They must demand a refund of all the money that was illicitly paid to workers since 1985, otherwise the scandal will never die. Only when they fix the injustices of the past, will they be able to sing a new wage agreement that erases all the corrupt clauses and turns over a new leaf at the bank.

The bank's heads should understand that nobody will listen seriously to the governor about the budget - the deficit, efficiency, reforms, savings and proper management - if he doesn't first clean out the stables at the bank. If Fischer wants to save the central bank, he has to stick his hand deep into the mud. It may not be nice, but it is necessary.