Public Money, Private Eyes

Private investigators are being employed by the state, in a legally questionable practice, to determine whether Israelis are eligible for their tax discounts and social benefits.

A single mother of three in the advanced stages of pregnancy, who is being identified simply as D., just wanted to receive the discount on Givat Shmuel's municipal day-care to which she was entitled. She submitted an application, including the documents attesting to her financial situation, but quickly found herself in the midst of a probe by a private investigations firm, hired by the Social Affairs Ministry.

"It started as a little spat with a municipal employee who wanted to know why I was receiving disability payments from National Insurance," she recounts. "I asked why that was her business and how it related to my request, and that started an argument. A few days later, I received a letter from a private investigator stating that he was appointed to look into my financial means, that I needed to show him documents and that he'd be coming to my house 'to get an impression.'"

City hall and the Social Affairs Ministry informed D. that if she refused to cooperate her request would be denied. But she was outraged by the invasion of her privacy. "I don't want to share my problems with the whole world," she says.

After a fierce fight with the municipality, and after presenting a letter from her psychiatric doctor stating that allowing a private investigator into her home would harm her mental state, Givat Shmuel dropped the probe and granted her the discount based on the documents she had already submitted. "It's simply humiliating that I needed to get every municipal employee involved in my psychiatric situation so that they'd drop the private investigation," she says.

For many Israelis, many of whom need assistance from the authorities, a run-in with a private eye is unavoidable, and cooperation is a precondition for receiving what they are entitled to. In most cases, they're aware they're being investigated, but private eyes are asked to conduct covert investigations as well.

When the Association for Civil Rights in Israel got involved and complained to the Givat Shmuel municipality, it received a response that boils down to "everyone does it." The municipality stated that the investigation was conducted by a company that won a ministry tender, and that it saw no problem. "We believe that welfare authorities have the right to use these services to find details they don't have in order to determine eligibility," it stated.

The municipality is correct. The private investigators are indeed employed through a state tender. In other words, the state has privatized investigations into determining whether its citizens are eligible for various discounts and benefits.

'Terror' tactics

Often, Israelis' run-ins with the investigators are quite unpleasant. A Jerusalem resident named Yoni Buchsbaum requested a municipal tax (arnona ) discount because he was a student and had a low income, and he gave city hall copies of his paychecks as part of his application. A month later, he received a phone call from a woman presenting herself as a representative of a private investigations firm.

"She told me I had to agree to an investigation at my home and submit all sorts of approvals. I told her that by law I don't have to do a thing, but an hour later I received a call from another investigator who told me that this would advance my request, and asked me to give him all sorts of documents. I told him I would give him documents, but that I wasn't willing to be interrogated," recounts Buchsbaum.

Buchsbaum started pulling together documents including bank statements, tax documents and information about his girlfriend, but he received a letter from the municipality stating his request had been denied because he hadn't cooperated. "I fought it, but eventually the municipality explicitly told me I had to be interrogated in order to receive the discount. Since it was a significant sum, I agreed to meet the investigator," he says.

The investigator spent an hour and a half questioning him in his apartment, wandering around, as is standard for such investigations. Ultimately his request was denied. "I can prove that I'm eligible, but I just didn't have the energy to continue with this. That's their method - they try to exhaust you. You feel like a criminal simply for asking what you're entitled to. The local authority is employing terror," he says.

The ACRI alleges that the government's use of private eyes is inappropriate - it oversteps authority, and harms people's basic right to privacy, dignity and fair process. The association, which handles many cases of Israelis who say they've been harmed by such private investigation firms, contacted the Interior Ministry and the Social Affairs Ministry with a request to find out what law entitles them to privatize financial investigations into private citizens.

The ministries evaded giving a real answer. They stated that these were legitimate actions, but couldn't state under what law. The ACRI then contacted Attorney General Yehuda Weinstein, asking that he order the ministries to halt the practice. When Haaretz contacted the Interior Ministry, the Social Affairs Ministry and the Justice Ministry, the ministries heaped the responsibility onto Weinstein. In the meanwhile, they're still employing private eyes.

False pretexts

There are plenty of reasons to think that this practice may be problematic - not least the following legal case.

The Social Affairs Ministry has been choosing private investigation firms via tenders for years. A year ago, one of these tenders made it to the High Court of Justice. One firm petitioned the court, asking that the tender be canceled because it asked applicants to submit price quotes for illegal investigation practices - undercover investigations, and investigations under false pretexts in order to obtain personal information. According to the petition, the tender stated that the tender winner would need to be able to obtain private information under false pretexts, most likely medical information. By law, medical information can be shared only with the patient's approval or by court order.

"It's possible to obtain medical documents through some effort without patients' knowledge," states one private investigator. "It's very difficult, and necessitates questionable, if not illegal, methods."

The firm ultimately withdrew its petition at the advise of the court, because it had been a bidder in the tender. But the justices, sitting in a panel headed by Elyakim Rubinstein, wrote that the state would do well to avoid issuing tenders for illegal acts, and should not have done so in the first place. But the tender wasn't canceled. Instead, the Social Affairs Ministry stated it would use only legal means of investigation.

"The Social Affairs Ministry issued this tender regarding checks into financial eligibility alone. Investigations into other matters have not and will not be conducted. The ministry obeys the law and is upholding its commitment to the court," it stated.

How do private eyes conduct their investigations? In most cases, the party under investigation is fully aware - the investigator contacts them and tells them they are being checked following their request for a stipend or discount. Generally, the investigator then arranges a time to meet the person, although some investigators admitted to us they sometimes prefer to show up at someone's home unannounced.

By law, investigators have to identify themselves before starting the investigation, during which they try to establish details about the person's financial situation, sometimes based on furniture or other items in the person's home. The problem is that people don't always realize that, by law, they are under no obligation to cooperate with the investigator, and that they're giving personal and financial information to another private citizen, not directly to a government authority.

A request for an arnona discount is contingent on signing a form that allows the municipality to check the recipient's status through all legal means. "We tell them it's part of the application process, which leads them to believe that if they don't cooperate, their request could be refused," admits one investigator. "As far as the citizen is concerned, we work for the authority, and that's not far from the truth. In most cases, the investigator won't spend too much time at the person's home. We come unannounced only if we suspect we'll be misled if we coordinate the visit in advance - for instance, if the applicant were to bring people who don't live there in order to substantiate his claim that he lives with all his children."

The ACRI believes this practice is a violation of basic laws as well as various rights. ACRI attorney Anne Suciu sent Weinstein a letter stating, "The investigation process includes visiting the person's home and penetrating his personal life and his most sensitive personal information. This process brings feelings of denigration and sometimes even persecution. In addition, the authorities' decision to investigate a person requesting assistance based on documents tags that person as a 'suspect' who must prove his innocence."

When legislators wanted to give public bodies the right to investigate, they did so explicitly, as it is a violation of a citizen's rights, adds Suciu. Therefore, anyone conducting an investigation needs explicit legislative backing, which doesn't exist for the above types of investigations, she says.

Furthermore, even if a legislative basis existed, it still would be unconstitutional to outsource the work to a private company, Suciu adds. "Handing over sensitive powers to a private entity is a serious violation of the individual's basic right to privacy, dignity and fair process," she states. "These investigations are presented as mandatory processes, and individuals are made to believe that refusing to participate will lead to their request for a discount or assistance being denied."

Plus, private investigators face a conflict of interests, Suciu notes. "A private investigator, motivated by profit considerations, wants the authority to continue working with him and thus will be inclined to 'prove' himself by conducting particularly aggressive investigations, ostensibly to uncover cases of fraudulent requests," she states. She cites a private investigator's contract, as exposed by the state comptroller, which explicitly states that the investigator will be paid "only when it turns out that the details the investigator is being asked to confirm enable the discount to be decreased or canceled."

Undercover agents

Some investigators who spoke to Haaretz reject these allegations.

"The investigator meets with the applicant and sits with him for an hour, more or less, and that's all," says one. "There are investigators who'll bang on the door, wander around the apartment and peer into the fridge and cabinets. But an honest investigator won't leave his chair without requesting permission."

Local authorities and government ministries sometimes go beyond open investigations and ask private eyes to go undercover. They try to get an impression of the applicant's lifestyle by speaking with neighbors or entering the applicant's apartment under false pretenses. Sometimes, applicants find themselves facing technicians whose services they never requested, or municipal workers looking into an ostensible complaint. One investigator recounts a case of a private eye who presented himself as the representative of a foreign company that was looking to employ the applicant. The investigators are forbidden to enter a home if an adult isn't there, but one said that a handful of his comrades don't follow that law, and in order to finish the job quickly will check inside a home even if the only person there is a child.

Attorney Daniel Peretz, head of Israel's union of private investigators, offers calming words: When it comes to arnona discounts, private eyes don't follow citizens, they only cross-check details included in the application, he says. "These aren't private individuals, they're certified private investigators," and they follow the Justice Ministry's code of ethics for the profession, he says. They're subject to close oversight, and many are also officers in the army or the police force. As in any field, there are a few bad apples, but most investigators behave properly, he says.

Investigations are proportionate, delicate and subject to oversight, Peretz states. "Investigators won't go into a house and open closets. That's a violation of privacy, and they could lose their license for it," he adds. "Investigators don't want to lose their license that easily." In addition, by law, investigators must not be paid based on their results, he says.

Ultimately, says Peretz, investigators are helping preserve public funds. "In most cases, there's no problem and the person receives his allowance - most citizens don't lie. In 5% of the cases it turns out the state or authority was justified in its decision to investigate, and thus damage to the public coffers is prevented. In this way, the investigations are very much in the public interest."