100 Most Influential: Defense

Outrageous pensions that nobody will touch.

The defense club always had a sound business model. In a paranoid country whose neighbors aren't that friendly, it always was easy to ensure a budget, most of which was dedicated to salaries, benefits and, of course, pensions.

This is a strong club that includes the defense minister, the Israel Defense Forces chief of staff and other top generals, and over the years it's managed to preserve its budget even as civilian budgets shrank. Even the current budget, which called for slicing the defense allocation by NIS 3 billion, was a bit of a bluff — the budget was to be increased in future years, and now even that NIS 3 billion cut is in question. Defense Minister Moshe Ya'alon, IDF Chief of Staff Benny Gantz, his deputy Gadi Eizenkot, Defense Ministry budgets chief Re’em Aminoach and Defense Ministry planning chief Nimrod Sheffer control a budget of NIS 58.4 billion this year, equal to 16% of the state budget and 6.5% of Israel's GDP.

It's already been said that the defense establishment is a bit of a country within a country, that Israel is an army that happens to have a country. How else would you explain the fact that the IDF is "selling" state land in central Tel Aviv and other cities? That senior defense officials demand "emergency" funds from the government in the silence of night and get them? Why is our army still banging on its war drums while other armies in the region are disintegrating? And why is it clear to all that should there be a major event, the army will still get extra money?

A few weeks ago, the top brass announced a "dramatic" cut that included shutting entire air force units and cutting reserve training, but not a word on the salaries or pensions in the standing army. These are never touched, even though pension payments make up 9% of the defense budget. But the outrageous pensions — which start at age 50 — aren't the only outrageous thing in the defense establishment. Defense retirees often fall straight into the arms of Israel's 600 or so defense companies from whom they were making purchases up until their discharge, including giants Elbit Imaging, owned by Michael Federmann; Israel Aerospace Industries, under the helm of chairman Rafi Maor, and Rafael Advanced Defense Systems, led by CEO Yedidya Yaari. And then there's the fact that these people gain experience on the state's dime and within a few years are exporting that expertise to the Americans without paying any royalties to the state. Another popular second career for former defense chiefs is in politics.

It doesn't seem that anything is about to undermine the defense establishment's power, even though everyone sees the injustice and the lack of equality. But there's one problem: Israel can't keep cutting civilian budgets and increasing security spending while remaining a country that people want to live in.

Moti Bassok and Ora Coren contributed to this report.

Defense Ministry