Macher, Macher, Make Me a House

How do you build a house in Israel?

Cement, bricks, sand, wood, contractor, architect, designer.

Oh, we forgot somebody. You mustn't forget the fixer.

Israelis not in the business world only run into machers, or "fixers", when butting heads with local government after deciding to build a home, or to renovate one.

One TheMarker reader relates: "After I settled on all the details with the contractor who was going to build my house, he added that I should get in early and hire a macher to move things at city hall. I said I didn't need a macher because I had approved plans for the whole construction, and didn't mean to exceed them by a millimeter. He laughed." P.S. - "After a year of red tape at the city, I hired the macher."

This is truly the nation of the machers. There are small ones and big ones. The small ones arrange matters for you at city hall. The big ones arrange matters for you at the level of national government. The small ones tend not to be too complicated; the big ones include some of the top lawyers and businessmen in the land.

But their outcome is identical: they have ways of quickly getting what you can't from officialdom.

Fiddler on your roof

Small machers transfer envelopes with a few hundred dollars inside. Big ones push through promotions for the officials, or set them up in cushy private-sector (or public-sector) jobs.

How cushy? Ask attorney Sinai Gilboa, who until three weeks ago served as deputy mayor of Petah Tikva and acting chairman of its planning committee.

Like many cities in Israel, Petah Tikva has developed dramatically in recent years. It has become a powerhouse of industry and hi-tech, and hundreds of apartments spring up each year.

What does that mean? Eh, I'll erase it

Each serious real estate transaction goes through the city hall pipelines. The difference between a good property deal, a great one and a purely dreadful one is often the flick of an planning committee official's pen.

The Dan bus cooperative receives hundreds of millions of shekels in subsidies from the state each year. It wanted to advance its real estate rights in Petah Tikva. But when the bus company ran into a brick wall, it decided not to pick a fight with the city officials. It decided to hire them, or rather, to hire the services of deputy mayor Sinai Gilboa, a lawyer by trade. He also happened to be the acting chairman of the Petah Tikva planning committee.

How much do the services of an uber-macher like Gilboa cost? The State Comptroller discovered that Dan paid him at leas NIS 15 million for various services in respect to a property project it wanted to promote.

NIS 15 million went from a public body to a person, and the talents of that person were confined to his ability to cause the public pocket to divert resources to the public body. Got it?

If I were a rich man

In recent years the papers have been full of reports on corruption. How 20 or 30 tycoons manage to get their way in the halls of government. How the walls separating the people controlling taxpayer money and the filthy rich have fallen. How officialdom grovels before the truly rich.

Corruption in the real estate market doesn't make page 1, but it's the most prevalent form of rot in government. The cities, the planning committees, the Israel Land Administration and everybody else involved in property regulation allocate assets and rights worth hundreds of millions of shekels each month, mostly through the offices of machers.

Citizens standing helpless before the bureaucratic machine often wonder why there are no clear rules that dictate what may be, and what may not. What they need to do, with whom they need to talk to get a permit, a concession or a paper from the city. They wonder why there is no predetermined period of time for the city to make decisions.

The simple answer is: bad administration. But there is another answer: when rules are clear and the public body must meet clear criteria within given periods of time, there is no need for machers, and the officialdom can't skim off the cream. What the man in the street calls "red tape, foot-dragging and opacity" the rotten call the path to riches.

Last week TheMarker reported that the state prosecution is setting up a team to fight corruption in the real estate sector. it means to zero in on the hub of the rot: the planning and construction committees.

Sunrise, sunset and who pays for it

Battling corruption in real estate is less glamorous than reforming aviation or the phone system. But if pursued vigorously and broadly, it could be one of the biggest economic reforms ever carried out in Israel.

The prosecution must file charges as fast as possible, against top officials at the cities and planning committees who abused their power to grow rich. The court should hand down harsh punitive sentences. The Supreme Court should seriously address the violation of duty, which has become a mere empty phrase.

One stab at reform to eliminate machers and burn out corruption in the cities is the Interior Ministry's plan to make the elected representatives of a city personally pay for corruption and waste of public funds.

The Interior Ministry says it means to force the mayor of Petah Tikva and other top city officials to return NIS 120 million, out of their own pockets, because they broke the law, and ministry regulations too. The message of the punishment is one of the most important to emanate from the public sector in years and years.

Yet the case of Sinai Gilboa, Dan and the city of Petah Tikva is not a rare one. All too many council chiefs, mayors and committee heads, past and present, have become multi-millionaires directly or via first-degree relatives.

All too many lawyers, architects, engineers and accountants in Israel are making a fortune, but not by virtue of their profession. It is by virtue of their skill at navigating the shoals of city hall on behalf of their clients.

Only long sentences behind bars coupled with civil claims that aim to seize their ill-gotten gains will deter the people that control our tax money.