Something Is Rotten in the State of Denmark

Pray that nothing comes of the police investigation into the Tax Authority. Pray that it turns out that no bribe was paid to a tax official, certainly not to senior Tax Authority officials, and that the director of the Prime Minister's Office was not involved in providing corrupt assistance to key businessmen. Pray that it will all turn out to be a big mistake, and that the terrible impression rising from this investigation - that the Israeli government is rotten right through to its upper echelons - is proven false. Pray. Otherwise, what hope is there for this country, and what is the point of sending our best sons off to be killed for a country where greed prevails over all?

There were four competitors for the position of head of the Tax Authority in 2005: Ozer Berkovitch, deputy in charge of administration in the Tax Authority, but lacking professional background in taxation; Udi Barzilai, former Tax Authority legal advisor and a blatantly political person - a member of the Likud Party, and later Kadima; Shuki Vita, deputy in charge of tax assessment and evaluation and a former Likud member; and Jackie Matza - deputy in charge of professional matters.

Of the four, Matza was considered the most professional and unencumbered. He was perceived as an expert, with a reputation for honesty and devoid of any political background. In other words, his appointment was considered to be in the best interests of the public - and we can still hope that this is the case. However, the fact that Matza's appointment may be interpreted otherwise, that it may have been part of a bribe, reveals the problematic aspect of the appointment process - a process in which the only person who decides is the minister of finance. He alone.

The fact is that all of the senior positions in the treasury - head of the Tax Authority, accountant general, head of the budget department, chairman of the Securities Authority, the civil service commissioner - are appointed by the finance minister alone. The most sensitive positions in the State of Israel, which decide where public funds will be directed, who will be investigated and who will not, and how thousands of government employees will be promoted - are the personal domain of the minister of finance.

The attorney general is appointed by a public committee. Most other government officials are appointed by tender. Only in the treasury, which preaches to all government ministries about the lack of transparency and the lack of accepted norms of good governance, is everything subject to the decision of a political personage - the minister of finance.

Jackie Matza won the race for the position of head of the Tax Authority. Ozer Berkovitch, who lost, was later appointed as director of the Wage and Labor Accord Unit at the Finance Ministry. Shuki Vita, another loser in the race, was appointed to the position of director of state revenue. In the treasury, it seems, everything stays in the family - and whoever failed to be appointed to one senior position is sure to be compensated by being appointed to another. And what about equal opportunity in the economy? What about the appointment of the most qualified person for the job - and not handing out jobs on the basis of "I owe an apology" to whoever failed to be appointed? These questions have no satisfactory answer.

If Matza's appointment to head the Tax Authority was part of a bribe, and if Shula Zaken, head of Prime Minister Ehud Olmert's bureau, was behind the bribe - where does this leave Ehud Olmert, who was minister of finance at the time of Matza's appointment?

If the Tax Authority has indeed been tainted by corruption since the tenure of former director Eitan Rub, including during the tenure of the current director, Matza, then many reasons for this can be found in the structure of the Tax Authority itself - a structure in which more is hidden than revealed. This structure has no external supervision. It has no external accountant, and the legal advisor is subordinate to the director of the authority. The former legal advisor, for instance, was fired from her position by Rub, against the backdrop of tensions between the two.

Without external supervision, the Tax Authority reaches decisions that personally affect the pockets of the most powerful corporations and people in the economy. Most of these decisions are reached secretively, through "pre-rulings" and the levying of administrative fines. A demand to publicize the names of those who were fined met with objections by the Tax Authority. In hindsight, there is obviously a need to make the process more transparent, and to subject all procedures in the Tax Authority to public supervision.

The directors of government ministries, with the prominent support of the director of the Prime Minister's Office, are pushing for steps to reduce external supervision by subjecting ministry accountants to ministry directors, instead of to the treasury's accountant general. The possible results of allowing a sensitive government agency that handles public funds to be exempt from ongoing external supervision are clear from the current investigation. The proposal to abolish the independence of ministry accountants will ensure that the worst outcome quickly materializes in other offices as well. If the government of Israel still has any vestige of public decency, it must scrap this nightmarish idea, immediately.

And why, for heaven's sake, is the stock market celebrating? Just imagine if the tax authorities in the United States had been placed under investigation on suspicion of corruption - Wall Street would quake. But on the Tel Aviv Stock Exchange, the leading indexes rose by about one percent, as if the gloomy picture of government corruption that is being revealed had nothing whatsoever to do with the local stock exchange. Indeed, something is rotten in Denmark.