Israel's Defense and Finance Titans Are at War

Finance Minister tells Haaretz: 'I have declared war on Ehud Barak on the issue of transparency and control and it will happen - if not now, then later through Knesset legislation.'

The senior Defense Ministry official was boiling mad and immediately launched his attack. "The Finance Ministry doesn't run the country, they are not our bosses. What do they know about security, anyway? How can they make any decisions about it? Is it their problem when a soldier is killed?"

He was just getting started: "I'm not their clerk and I'm not a civil servant; I'm a security man with the DNA of a security man, and the result is the devoted handling of security issues. Standing army men are not like other civil servants. There's more to them. They are security people who serve the state. So let the treasury get off our backs and stop babbling about 'transparency and control.'"

The senior official gave an example: "If a factory that's producing something for the security forces has a problem - and it doesn't matter if it's a shoe factory or fuse manufacturer - they don't go to the treasury, they come to us. If there is a security coordinator who only has a half-time position, we'll provide the money so that he can be employed full-time, because security concerns are in our DNA."

He was speaking so fast and forcefully that I could barely get a word in edgewise, but I finally managed to interject. You are essentially saying, I said, that the Defense Ministry doesn't implement its budget according to the clauses approved by law, but does exactly what it feels like with the money, without supervision, without transparency and without any control.

"What does transparency and control mean?" he replied. "The responsibility for security is on us. That's our mission. We see the defense budget as a big soup pot, from which we take what we need according to the security demands."

Wait a second, I said. What would happen if the Education Ministry acted similarly, and would decide, on its own, to transfer funds from the budget for building new classrooms, to increase the number of inspectors or to improve teachers' benefits?

"Don't compare," the senior official says, decisively. "We deal with life itself, not with everything around it. A teacher isn't thrown out if she makes a mistake; an officer is. We also don't deal with newspaper commentary," he says, throwing a barb at me. "The financial press is not balanced when it comes to the army.

"Look. For example, we are arguing with the treasury about the wages of standing army pensioners. The treasury says they are just like other state employees, and we say they deserve more because they aren't civil servants, they are security personnel.

"I'll tell you a little secret," he continues. "The state benefits from our flexible budgeting. Because the state assigns us all kinds of missions that we execute from inside that big soup pot, like building the fence along the border with Egypt, or sending a plane with equipment to Turkey after their last earthquake. That's why there's no chance that the current situation will change."

At least one thing is clear from all this: Everyone agrees that neither the treasury nor the Knesset exerts any control over the defense budget. But this is a serious problem, because we're talking about public money. Supervision and control are like sunlight - they illuminate, disinfect and prevent waste, errors and corruption.

Even the Mossad and the Shin Bet security service are subject to inspection and control from the Finance Ministry's controller-general, and the Mossad says this doesn't affect its field operations. The Mossad chief even said this arrangement facilitates savings and efficiencies, because everyone knows someone is checking and commenting.

There is a risk (and such things have happened ) that if the army is forced to make cutbacks, it will choose to cut back on training and reserve call-ups rather than, say, implementing the recommendations of the 2007 Brodet Committee to reduce salary costs by two percent a year.

The lack of transparency and control also leads to generous interpretations of everything that relates to salaries, because the interpreter is the army's Personnel Directorate, not the controller-general. That's why there are deviations in the granting of benefits in the realms of taxation, cars, studies, telephone allowances, sports facilities and the like.

The Finance Ministry is convinced that if it could audit the army's salaries budget, a billion shekels a year could be saved from that alone. After all, audit and control is in the treasury's DNA.

It's pretty clear to both the treasury and the Israel Defense Forces that Prime Minister Benjamin Netanyahu has changed his mind and does not intend to cut the defense budget. That's why the battle is now over transparency and control, which is an indirect way of imposing cuts.

Finance Minister Yuval Steinitz told Haaretz: "I'm stubborn, I don't intend to give up; we're going to pursue justice with no mercy. I have declared war on Ehud Barak on the issue of transparency and control and it will happen - if not now, then later through Knesset legislation."

So who will win this battle of the titans? Security DNA or the treasury's DNA?

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