Treasury Drops PR Firm Over Conflict of Interest Worries

Withdraws from agreement with Scherf Communications, which works with several of Israel's largest companies.

Ilan Assayag

The Finance Ministry is dropping a major public relations firm, just days after the state comptroller raised concerns that Scherf Communications might face conflicts of interests because its customers include some of Israel’s largest companies.

Finance Ministry Director General Yael Andorn announced yesterday that the ministry would not work with Motti Scherf’s firm.

State Comptroller Joseph Shapira had started looking into the terms of the contract, which was announced only four days earlier.

On Sunday, the Finance Ministry announced that it was hiring Scherf for NIS 20,000 a month. In that announcement, it stated that it had addressed issues relating to conflicts of interest.

In yesterday’s announcement, the ministry stated that Scherf Communications had been chosen after scoring the highest in a tender process, and that the issue of conflicts of interests would be addressed in a detailed agreement. It added, “Given the major processes being led by the Finance Ministry, and so that there not be any doubt, at this point the ministry will not be working with an external communications firm.”

After Sunday’s announcement, Shapira asked the treasury for the details of the agreement, particularly those regarding conflict of interest, sources told TheMarker.

The comptroller has criticized the appointment of private advisors to government ministries in the past.

Finance Minister Yair Lapid spoke with Andorn after Sunday’s announcement, in the wake of public criticism, and they agreed to cancel the agreement with Scherf.

Sources close to the Finance Ministry said Lapid was troubled by the possibility that his ministry’s media advisor might also be serving as media advisor to Bank Leumi CEO Rakefet Russak-Aminoach and to Idan Ofer, controlling shareholder of the Israel Corporation.

Currently, the Finance Ministry does not have an in-house spokesperson.