Opinion

Israel's Cesspool of Corruption Is Filling Up

Shari Arison joins a growing list of the rich and powerful facing indictments, but at least it shows the legal system is working. Bibi wants to put an end to that.

'Go to jail!' Sign at an anti-corruption rally in Tel Aviv, Apr. 28, 2018
Ofer Vaknin

It seems like everybody who is anybody in Israel is ensnared in one kind of corruption case or another.

This week it’s Shari Arison, Israel’s wealthiest woman, who police and securities regulators are recommending be indicted on charges that a construction company she controlled until recently was bribing African officials. Two weeks ago Teva Pharmaceuticals, Israel’s biggest company, was accused of being at the center of a scheme to fix generic drug prices in the United States.

In March, Mizrahi Tefahot, Israel’s third-largest bank, agreed to pay the U.S. $195 million to settle charges it helped American clients evade taxes.  Israel's No. 2 bank, Leumi, paid $450 million five years ago to settle similar accusations and No. 1 lender Hapoalim is in the process of negotiating a settlement of its own. It could end up shelling out $750 million.

Bezeq, Israel’s biggest telecommunications company, is entangled in multiple cases -- some connected with its acquisition of the satellite TV company Yes. Bezeq was owned by one Shaul Elovitch, who is suspected of providing sweetheart cverage for the Netanyahu family on its popular website Walla! in exchange for regulatory favors for Bezeq. Elovitch and a host of Bezeq executives are facing indictments.

Of the four cases pending against Netanyahu and his associates, two involve Israeli businesses:  Bezeq in Case 4000 and the Yediot Aharonot group in Case 2000. The others  -- Case 1000 (champagne and cigars) and Case 3000 (the submarines probe) -- involve powerful business figures.

And this only relates to the business sector. Israel’s previous prime minister, Ehud Olmert, served time for corruption charges and his predecessor Ariel Sharon had a close brush with the law. Bibi, it seems, is just observing a tradition of PMs on the take. Meanwhile, four sitting Knesset members are all the subjects of criminal investigations, with two of them facing indictments by the attorney general, pending a hearing.

Okay, open the window to let out the stench. Now we can sit down and examine the problem.

The first thing to note is that when evidence of corruption is uncovered it captures headlines; ordinary, honest business does not. So there is a natural tendency for people and the media to imagine there is more illicit doings than there are.

Another thing to note is that in the case of Shari Arison and a clutch of others not cited here, the corruption involved is paying off African officials. It’s not as if the Israelis involved can walk around with halos over their heads, but the fact is, bribes is the way business is done in much of Africa. Transparency International, the Berlin-based NGO that monitors perceptions of global corruption, ranks sub-Saharan Africa the worst among the world’s regions.

Vis a vis Israel, Transparency International has shown that perceptions of corruption had been showing some signs of improvement, until recently. In 2012, Israel ranked 39th in the world among 180 countries; by 2016 we had risen to 28th. Since then, however, we’ve fallen to No. 34.

It isn't that Israel’s ranking was overly impressive even in 2016. Our score has remained mostly unchanged and our ranking has risen mainly because so many others’ scores have fallen.

There are very good reasons to think that things could get worse. Transparency International makes a strong case between corruption and populism: it notes that 40% of all populist leaders around the world are facing indictments.

That's no surprise. Populist leaders may portray themselves as doing the will of the people, but to do that, they invariably act to strip the power of the institutions that threaten to get in the way of their good work, like the courts and the media. But without those institutions there’s nothing to stop the leader and his cronies from helping themselves to the public purse.

Even though he seems to think that winning an election should entitle him to be above the law, Netanyahu isn’t quite a populist of that mold. But in desperately seeking to avoid an indictment, he has made common cause with true populists, like Miri Regev and Bezalel Smotrich, who think the state belongs to whoever runs it. No one has accused Regev or Smotrich of corruption but their campaign to remove pesky High Court justices and government legal advisers is clearing the path for corrupt officials to act without fear of impunity.

To Israel’s credit, it seems the rich, influential and/or powerful -- lawyers, business leaders, academics and even a few politicians inside the coalition – are starting to recognize the danger and are ready to fight it.

Whether it’s the immunity law or legislation to neutralize the High Court, the issues aren't just about Bibi. It would be bad enough if it was, and if the Knesset could be mobilized to pass legislation in the interests of a single individual.

But it’s about the ability of the legal system to investigate and prosecute public officials, who are after all the source of much business corruption. Without that ability Israel’s distressing list of corrupt officials and business people won’t grow longer, but that’s because there will be nobody there to expose and prosecute them.