An Exodus We Didn't Need

Many of the Finance Ministry's top hands are decamping, leaving empty desks and rookies to deal with mounting pressure from tent dwellers; could 40 years of bumbling bureaucrats be in the offing?

The social unrest spreading through the country caught the Finance Ministry completely unprepared and at the worst possible time. Top people have been decamping and many of its highest posts remain unmanned, with no suitable candidates in the offing.

Its personnel problem is evident in the way the ministry has been dealing, or not dealing, with current events. For instance, nobody there estimated the cost of the prime minister's suggestions for resolving the housing crisis, which Benjamin Netanyahu put forward at a press conference last week (affordable housing, more student dorms and student discounts for public transportation ).

Yuval Steinitz
Tomer Appelbaum

The price the ministry put on the tent protesters' demands (that "NIS 60 billion" paper ) was flawed to the point of humiliation. The cost of some demands was wildly overestimated, some were listed twice.

It's hard to imagine the Finance Ministry making such amateurish blunders in the past, recent or distant.

Netanyahu named Finance Minister Yuval Steinitz to head a panel of ministers and experts to handle the protesters' demands. On the one hand, it's a show of Netanyahu's faith in Steinitz. On the other, if things at the ministry were normal, this would be entirely its show.

Relations between Steinitz and Netanyahu have seen ups and downs since this government's establishment two years ago, and the last three weeks, since the uproar began, have been no different. Netanyahu's status has also been rocked since then.

Not a day has passed that he hasn't issued responses and decrees, some quite odd. Steinitz, on the other hand, has kept his cool. His comments have been level-headed - but he's walking a thin line. Any mistake could be his last.

The difficulties at the ministry have also hurt morale among the rank and file. Ministry veterans have never experienced such sweeping changes at the top in the middle of a government's term. Some go so far as to whisper that the brass is playing its final notes.

Haim Shani 'the traitor'

The hardest blow to the ministry is definitely the resignation of Director General Haim Shani last week, after just two years on the job.

Sources close to the minister even accuse Shani of treachery. A prominent figure in Israel's high-tech industry, Shani had been brought to the ministry by Steinitz personally; it took him no short length of time to learn the ropes of macroeconomic policy, how Israeli bureaucracy works and how to communicate with other leaders in the civil service.

Just when Shani seemed to have figured out the job, his relations with Steinitz soured and he quit. As if that weren't bad enough, at the height of the crises, he up and flew to Chile for a family event, leaving the country for the two most critical weeks in this socioeconomic crisis.

Not only that: Shani is co-chairman of the competition committee created to examine economic concentration in the country. (The other chairman is Eyal Gabbai, the soon-to-be-former director general of the Prime Minister's Office ).

The Chile jaunt, albeit scheduled well in advance, removed Shani from the critical stage of preparing the first draft of recommendations, after Netanyahu demanded the panel deliver by September 1. The Finance Ministry's top person on the committee won't even be there.

No successor has been named for Shani. Steinitz, evidently preoccupied with the social upheaval, hasn't had time to look for one. Talk that Moshe Terry, former head of the Israel Securities Authority, would be tapped proved unfounded.

Terry wants to be tax commissioner, not director general of the Finance Ministry. Steinitz needs to find somebody prominent with proven leadership qualities, from the business world or academia, to help pull the Finance Ministry from its rut.

Need powerhouse, get novice

Shani's resignation is just one of many in the last three months. The worst or the rest was the resignation of Udi Nissan as head of the state budget department, a key division, after two years.

He does have a replacement: Gal Hershkowitz, as of next Monday. Hershkowitz had held a low-level job at the budget department in the past - coordinator of healthcare budgets from 1996 to 2002. Then he served a stint as chief financial officer of Gihon, the Jerusalem water and sewage company, and in recent years worked as CEO of Egged Europe. Question marks hover over his qualifications to head the budget division.

Hershkowitz will be filling some mighty big shoes. Past heads of the budget department included the likes of David Brodet, Ohad Marani, Kobi Haber and Aharon Fogel. Even if his appointment turns out to be wise, it must take months for him to learn the ropes - at the very time that the Finance Ministry and government need a powerhouse budget chief, not a rookie.

Moreover, Rotem Peleg, head of the defense budget, is also quitting. A division veteran, Peleg was supposed to help Hershkowitz learn the job. Instead, just as he settles in, Hershkowitz will have to find a replacement for Peleg. Again the timing is dreadful, just as budget cuts from defense are being demanded to pay for the protesters' wants.

But that's not all. Yehuda Nasradishi, the tax commissioner during the last four and a half years, quit, effective April 31. Unable to find a replacement, Steinitz asked him to stay for the time being. No successor has been found yet.

One of the reasons Haim Shani quit is that Steinitz rejected the recommendation of the search committee, which Shani had headed, to appoint industry assessor Moshe Asher as tax commissioner. But Steinitz wanted Moshe Terry.

Then there's Shuki Oren, who quit as accountant general after doing a wonderful job for three and a half years. He's been replaced by Michal Abadi-Boiangiu, who seems to be a terrific choice and likely to turn into a leader at the ministry. But she's still a newbie.

The bottom line is that the ministry is in turmoil and Shani's resignation probably dooms the structural changes he planned there. One was to strengthen the office of the director general at the expense of the division managers, who didn't like the idea.

But now the top priority is to find a successor for Shani, a strong personality that will restore the ministry to its former strength, and for that the ministry needs a director general whose qualifications are not a source of controversy.