Analysis |

The Frenkel Affair: How Not to Manage a Crisis

The problem is not with the fallen Bank of Israel candidate, but the con artists who created the affair.

Amir Oren
Amir Oren
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Amir Oren
Amir Oren

Jacob Frenkel's decision yesterday evening to end his candidacy for the position of the governor of the Bank of Israel put an end to an embarrassing affair but not to the root of the problem. The problem, as usual, is not so much in the person appointed, but in the people who appointed him and the mechanism behind the appointment.

Frenkel is going back home, but the con artists who created the affair are still here, arrogant as ever, discovering imaginary conspiracies and blaming each other for their expensive mistakes.

Prime Minister Benjamin Netanyahu had many months to find a replacement for Stanley Fischer. He wasted all that valuable time only to get to Frenkel post-Fischer, as if we are talking about the ambassador to a foreign nation, who according to the official protocol may not arrive in his new post before his predecessor has left the country. Netanyahu did not check out his own candidate; he trusted their acquaintance, their membership in the club of senior officials who do not like to pay.

Finance Minister Yair Lapid behaved the same, and said afterward in his characteristic shallow arrogance, that the Hong Kong story was taken from Google. If that was true, then we could have expected Lapid to also make such a small effort and prevent Israel the embarrassment, as if there is not enough embarrassment from linking the titles Prime Minister and Finance Minister to the names Netanyahu and Lapid.

Another Yair, Frumer, the chairman of the union at the Foreign Ministry, had a more important role in the Frenkel affair than Lapid. If the government were an airplane, he proved that its powerlessness at takeoff is accompanied as well by its impotence in shortening the flight and landing safely. The Foreign Ministry labor sanctions built the scaffolding that allowed Frenkel to climb down from the tree of his appointment.

There is not a single person in Israel whose job is to peek into the closets of candidates for senior government positions and shake out the skeletons. A security guard from the Bank of Israel, or the head of the sandwich preparation department (because in previous times there were those at the central bank who took sandwiches home for the family) undergo a stricter examination than the governor.

President Barack Obama cannot appoint cabinet secretaries and other senior officials without the FBI. But who needs the FBI when Bibi and Yair want Yankele? (Just to remove any doubt, FBI is not the acronym for Frenkel Bank of Israel.)

Is the Bank of Israel at all a bank in Israel? This is an obvious question since candidates for the board of directors of an Israeli bank are required to fill out an application that would have failed Frenkel, if he had ignored the question in section 4: Have you been investigated? The Bank of Israel governor after all is not just the cabinet's economic advisor. He is also the uber-supervisor the supervisor of the Supervisor of Banks. The official expectations for the governor, it turns out, are lower than those for the people he supervises.

The court petitions against Frenkel's appointment came before the Hong Kong incident was thrown into the ring of the Turkel Committee, which is responsible for vetting senior government appointments and is headed by retired judge Jacob Turkel. The state's response to the petitions reflected the justified assumption that the appointment was not a done deal, and the time had still not arrived for the High Court of Justice to examine it.

The Turkel Committee in its present form was appointed on August 22, 2010, exactly the same day that then Defense Minister Ehud Barak announced that his choice for the next IDF Chief of Staff was Yoav Galant. The committee's term was set at three years. This means that in three weeks the Turkel Committee will cease functioning and disappear. If Frenkel had not decided yesterday or was convinced to decide on the exit that was apparent at the beginning of the affair, then the cabinet would have had to appoint another retired Supreme Court Justice to replace Turkel and start all over again.

Netanyahu has not found time for this responsibility either, if he was even aware of the problem. While it is not a law, only a cabinet decision changing the nature of the appointment for example, to add three months to its term as was done for former State Comptroller Micha Lindenstrauss can finish the Frenkel business. But it is not at all certain that Turkel, who is used to clearing off his desk, would agree to discuss the next candidate for the job.

The Frenkel affair should be studied by all politicians, CEOs and their spokesmen to learn how not to manage a crisis. Frenkel made every mistake in the book, from that day in Hong Kong and throughout the three weeks the examination dragged out. His media advisers hardened or at least were unable to soften his offensive behavior. And two arrogant politicians who tempted him to fall into the hopeless affair did not know how to rescue him in time with at least a small part of his honor intact.

The final service Frenkel can offer to Israel is to make the government avoid more Frenkels. There is no point in another Turkel Committee without a process, one similar to that in the Justice Ministry's unit that investigates police officers or that in the police's security unit in the international crimes division. The secret of an appointment is in the preliminary investigation, but of course Netanyahu and Lapid know better.

Jacob Frenkel, left, with Prime Minister Benjamin Netanyahu.Credit: Kobi Gideon

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