Gila Almagor, the grande dame of Israeli stage and screen, is raising her voice. But she’s not speaking from her usual pulpit, at the Habima national theater, rather in a courtroom in defense of her beloved workplace, which is facing the threat of liquidation.
“Do you want us to go out and beg for money? What is this? There’s never been such a thing. I’ve been an actress for 63 years and I don’t recall a day like this. I had to grab a dresser to prevent her from committing suicide,” said Almagor, at a hearing at the Tel Aviv District Court on Sunday, concerning a request to close down the theater because of its enormous debts.
The request had been submitted already in September by a company that sells subscriptions to the theater, citing a debt of 2.8 million shekels ($807,700), although some sources estimate that the theater's overall debt totals as much as 76 million shekels (about $22 million).
In any event, it seems as if Almagor's cri de coeur was heard: On Monday, the president of the district court ruled against closing Habima and appointed trustees who will manage its finances instead of its present administration, under general manager Odelia Friedman, who will be relieved of her responsibilities for now. This step will enable the government to transfer the promised, much-needed funding to Habima. Moreover, in his decision, Orenstein also cited the necessity of allowing the national theater to continue its operations and to avoid mass firings of employees.
That will not be the first time that Habima was rescued from being shut down. The Tel Aviv theater, established in Russia in 1917, has suffered from a chronic crisis for the last 30 years.
A watershed moment in the theater’s troubles came in October 1995. The government agreed to help rescue Habima from its economic plight, but officials in the Finance Ministry decided that the funds would be transferred not as a budgetary allocation but in the form of high-interest loans. The effect was to further entrench Habima in debt, with most of the repayments going to pay off the interest rather than the capital.
Three different recovery plans were proposed for the theater between 1995 and 2012, but its management failed to meet the goals set down in the agreements as preconditions for receiving tens of millions of shekels in aid.
A state comptroller’s report in 2016 was harshly critical of both the state and the management, and particularly of CEO Friedman and the state-appointed auditor, Boaz Gazit (who is today a consultant to the theater). The comptroller’s criticism was aimed not only at Habima’s failure to implement the recovery plan but also at the artistic quality of its productions. The report noted that in some cases Habima had failed to transfer sums withheld from employee salaries for pension, social security and training purposes — a criminal offense. In addition, it stated, trade union fees and taxes were also not paid in full.
Throughout this entire period, actors and suppliers who worked with Habima had to cope with checks issued without sufficient funds and payments that were postponed repeatedly.
“I know they owe money to many people, including me,” said a translator who works with the theater but did not want her name published. “They gave me checks and told me not to deposit them because they wouldn’t be honored. The checks weren’t cashed and I’ve been holding onto them for a year now.”
A producer who worked with Habima in the past, and who was forced to compromise with the theater over the money he was owed, said: “I was forced to give up part of their debt and the remainder was spread out in payments. Artists and producers are afraid of not working at all, so they collaborate with their bullying conduct. This is horrible and happens under the auspices of the state.”
In addition, it seems that in a few cases, the theater did not pay for the rights to plays it staged from overseas, an issue that was also mentioned in the 2016 state comptroller’s report. Such complaints have come from the United States and Britain. In recent months, Israel's Foreign Ministry has received a complaint from the Croatian Embassy that one of its playwrights was not paid by Habima.
Another claim against the Habima management concerns nepotism. The daughter and the son-in-law of the theater's legal adviser, Doron Tishman, act in its plays. The bureau chief in general manager Friedman's office is the niece of Esti Applebaum, deputy chairwoman of Habima's board of directors. The wife of Shraga Bar, a businessman who has connections to the theater, is an actor at Habima. A bookkeeping employee is married to the person responsible for transportation there. Gil Kaftan, the brother of the theater's artistic director, Moshe Kaftan, acts in Habima plays, as does Moshe Kaftan's ex-wife Maya Maoz.
Habima's budget is based on income from the government and from subscriptions and ticket sales from shows, which include both original Israeli productions and others imported from abroad. A smaller part of its revenue comes from renting out rooms in its central Tel Aviv premises for lectures and outside performances.
Here we go again
Meanwhile, Odelia Friedman served as Habima's general manager, an appointment she received in 2012. Originally, she started out as a bookkeeper and worked her way up, eventually becoming acting general director in 2007. Her contract was renewed recently for another three years.
Among colleagues in the theater world who have complained about Friedman's administration is Ilan Ronen, Habima's former artistic director, who said: “So far, I have not been paid for the play ‘Who’s Afraid of Virginia Woolf?’ – a production I did in July 2018. And the same goes for another production from this year, ‘The Imaginary Invalid.’”
Added Ronen: “Everyone is suffering, I know it from other artists too – lighting, set people, etc. It has become an axiom: Either they don’t pay or they pay much too late."
Others have criticized the fact that under Friedman, Habima made large investments in productions that draw crowds but focus less on so-called high-quality shows. One example: the recent huge production of “Mama Mia,” from Britain.
For her part, Friedman rejected the claims against her and harshly attacked the government.
“The debts to the state stem from the high interest on the loans from the 1990s – 14 percent. They total 20 million shekels,” she told TheMarker. “The government is well aware of our financial situation. In addition, we lost 18 million shekels because of the renovations to the building, which went on for five years. In Britain, they specifically built a different building for the national theater while their premises were under renovation. We were forced to wander between all sorts of small venues."
In the last six years, Friedman added, "we have had a budget surplus. The problem stems from the three loans we took out: In 1994, in 1995 and in 2013. In September 2018 the Culture Ministry made an explicit promise to transfer a payment of 10 million shekels. It didn’t happen, in part, because since the first Knesset election [in April], there hasn’t been a functioning government.”
The State Comptroller’s report from 2016 criticized you personally. Didn’t you think about resigning?
“Why should I quit? The fact that the government owes the theater money – that means I did something wrong? We are trying to pay on time. I delayed the payments to the pension fund because there wasn’t enough money. As opposed to what was said in the report, this is not a crime.”
Channel 10 reported that in a closed discussion with Habima employees, you said you were trying to sweet-talk Culture Minister Miri Regev, and a special role was written for her in a skit for Habima’s 100th anniversary celebration.
“I do everything possible for Habima. The skit was written for public relations purposes for Habima. So all the media outlets covered Regev reading Chekov.”
Why do you sign checks that might bounce?
“You need to differentiate between payments to suppliers as opposed to salaries. Salaries have been paid in recent years. The salaries for the last month weren’t paid because the Culture Ministry stopped the theater’s regular budgets. Now a loan from the Histadrut [labor federation] has come in and we can pay salaries. I don’t sign checks that aren't covered, only postdated checks. This is legitimate behavior. The claims of artists against the theater are over royalties. I’m not proud of it, I embrace the artists, but the theater has no money.”
You aren’t paying certain artists overseas either. This creates diplomatic incidents.
“True, Habima has gotten a bad name around the world. But in the case of Croatia there wasn’t a diplomatic incident. We were approached by the Croatian Embassy in Israel about it. We’re not denying we didn’t pay.”
What about the claims of nepotism in the theater?
“There is no nepotism in Habima. The actors are cast by the artistic director and the director, not me.”
As to the matter of Esti Applebaum’s niece being employed at Habima, Friedman said, it was checked by legal advisers and also by the state comptroller's office and nothing inappropriate was found. In the case of the husband of the bookkeeper, the husband is a partner in a transportation company but it won in a competitive bidding process and does not receive any preferential treatment; moreover, payments have been delayed to this company too ... As for [Moshe] Kaftan’s ex-wife and brother – they worked here before him. Nepotism is when someone senior gives a relative of theirs a job. No such phenomenon exists here,” Friedman asserted.
We won't be treated like hostages
The data presented on Sunday at the Tel Aviv District Court concerning Habima's financial situation came from a report compiled by Hagit Georgi, an accountant who was commissioned by the ministries of finance and culture last May. Habima apparently refused for months to grant Georgi full access to the documents she needed to analyze the situation: She told the court that only on November 12 did she begin to obtain the necessary materials “and only then did the theater agree to cooperate. I am convinced that the debt is 70 million shekels, if not 100 million shekels. The figures are for September 2019, because those are the ones they were able to give me, but even when I examined the theater’s books for September, some of the expenditures are not listed. When I arrived I was regarded as an enemy of the theater.”
The report Georgi submitted indicates that Habima owes the government about 17 million shekels, in addition to about 15 million shekels to suppliers and another 12 million shekels to Bank Leumi. Moreover, about 4 million shekels are owed to actors, playwrights and stage crews (not including money set aside for vacation days and compensation), due to a months-long failure to pay salaries. Last week the actors’ union, in cooperation with Shaham – the Israeli Actors’ Guild, announced that it will strike if wages are not paid within 14 days. Another organization representing local artists threatened to discontinue its members’ participation in Habima productions.
According to Georgi’s report, even after the request to liquidate the theater's assets was submitted on September 23, “[the theater] issued dozens of checks, most of them post-dated, to various suppliers, for a cumulative sum of about 1 million shekels.”
“At court we underwent a disturbing and painful experience that reveals an ongoing failure on the part of both the theater’s administration and government authorities,” said a representative of the actors guild. “We won’t allow Habima's actors to be treated like hostages, and we will insist that the actors be an integral part of the theater’s [financial] recovery process.”
During the hearing, Habima attorney Doron Tishman asserted that Georgi's report was flawed and its figures inaccurate. “Almost 400 people have worked and they deserve a salary, and they’re like hostages due to no fault of their own,” he said, adding that he estimated that the theater’s debt to all its creditors is 43 million shekels, but it also has some assets to offset it.
Georgi’s report also mentioned alleged irregularities in the appointment of Friedman, the general manager. According to regulations, a person in that position is supposed to serve for four years and may be reappointed to a second term, but may serve for no longer than a total of 10 years. However, Friedman has been serving for over a decade and the report found no protocol for the renewal of her appointment.
For his part, attorney Gabi Safran, who represents the organization filing for liquidation of the theater, told TheMarker that “both Habima’s creditors and government representatives expressed their complete lack of confidence in the present administration and blame it for the current difficulties."
Habima offered this statement in response: “It is a pity that the State of Israel, which is now being run by treasury officials rather than ministers, is presenting inaccurate figures to the court, under the aegis of an infuriating hunger for power and bizarre media spins that are trying to create a drama. Treasury officials are forgetting to mention that the principal deficit is the fault of the government, while on the other hand the theater is completing six consecutive years, every year, with an operating surplus, and is suffering only due to past debts to the government and the high interest that the government is charging the national theater, because it chose to give it loans instead of grants.
"The theater’s audited records demonstrate that the deficit is significantly lower than what was presented in the court. The Habima national theater rejects the figures presented out of hand, and demands that the government immediately implement promises made during the past two years and to transfer the regular allocation without delay to enable us to pay salaries to 400 actors and other employees.”