State Comptroller: Barak Did Not Act as Expected of a Minister

In a special opinion section of the annual State Comptroller's Report, Micha Lindenstrauss blasts defense minister for deviating from public norms in regards to the consulting firm he transferred to his family upon entering the cabinet.

State Comptroller Micha Lindenstrauss harshly criticized Defense Minister Ehud Barak in a special opinion published Tuesday on the company Barak transferred to his daughters upon entering the cabinet.

According to the opinion, Barak's operations were not in line with the public norms that are expected of a minister or a ministerial candidate. Moreover, it said that Barak did not act in accordance with the rules to prevent conflicts of interest.

Ehud Barak - Nir Keidar - May 2011.
Nir Keidar

The opinion, which was published along with the annual State Comptroller's Report, was requested by the Knesset's State Control Committee.

In addition to criticizing Barak's behavior, the opinion outlined ethical guidelines for what ministerial candidates may and may not do.

Barak set up the company, an international consulting firm named Ehud Barak Ltd., in 2002, a year after losing a special election for prime minister.

In June 2007, a few days after winning the Labor Party's leadership primary, he transferred the company to his three daughters. Three days after that, he joined the Olmert government as defense minister.

Lindenstrauss examined the transfer in light of the Asher Committee rules, which were formulated to prevent conflicts of interest between a minister's (or deputy minister's) public duties and his business interests. The rules are supposed to sever the minister completely from such interests.

According to an investigation by Haaretz journalist Uri Blau, Barak's former company has earned revenues of about NIS 6.5 million since he took office in June 2007. Of this, some NIS 5 million went directly to Ehud Barak Ltd. and the remainder to a subsidiary called Cardo Business Development Ltd.

Lindenstrauss criticized Barak for transferring the company only three days before his appointment, instead of immediately after winning the primary, since that victory guaranteed his entry into the cabinet: The Defense Ministry had previously been held by the man he beat in the primary, Amir Peretz.

The comptroller also slammed Barak's refusal to let Lindenstrauss scrutinize the company, as Asher Committee rules require.

An associate of Barak's on Monday denied that Barak had violated any rules in the matter.

He also stressed that the report found no hint of criminal activity on Barak's part, nor any suspicion about the legitimacy of the firm's revenues since June 2007.