Taking Stock / An Affair of Many Names

At first it was known as "the Paritzky affair." The hapless infrastructures minister was caught on tape saying stupid, embarrassing things. He didn't have the horse sense to deny everything, spin it into cotton candy and go on the offensive. Within 72 hours, he was dead in the water.

Joseph Paritzky taught us just how low a compelling political urge can be, and that the keenest hatreds aren't directed at members of opposing parties, but are reserved for the rivals on the same side.

Then it became "the Maiman affair." The mystery-shrouded multi-millionaire grasped that he shouldn't hang around for his role to be exposed - so he jumped the gun and voluntarily showed up at a police station to confess he had hired a private detective to uncover dirt on Paritzky. (And the private eye found the tape).

Maiman proves that the big businessmen really do behave as we suspect - there are private detectives out there trawling for dirt, or anything that might be used to protect the businessman's interests. "Self defense," Maiman called it.

But as this column noted two weeks ago, a day after the affair hit the headlines, it wasn't about Paritzky or even Maiman. No - it's about the Israel Electric Corporation. It's actually "the IEC affair".

Below the tip

The exposure of the Paritzky tape and the involvement of Yossi Maiman turned out to be the tip of a large iceberg. The mountain of muddy ice is a mere metaphor for the blood-spattered wheeling and dealing over the natural gas that the IEC needs. And even that may be only an outcrop of an even bigger glacier.

The gas deal iceberg involves about NIS 2.5 billion, but the glacier involves the countless billions in taxpayers' money that IEC directors, managers, movers and shakers have under their control.

Who remembers the "Rogosin lands affair"? A short stroll down memory lane to 1995 is needed to see what now looks like a precursor to the campaign of terror the IEC directors claim to have suffered over this gas deal.

In 1995, Ezra Harel, since deceased, helped by the then chairman of the IEC asset committee, attorney Dan Cohen, managed to persuade the IEC to buy about 90 acres of land in Ashdod for a quarter of a billion shekels, in today's values. "Electric shock" the column called it back then.

Then as now, certain directors complained they had been press-ganged into approving a deal of dubious merit. They were concerned they had been force fed false or at least misleading information by the professional echelon at IEC, to obtain their OK.

Nonsense, retorted IEC management - the company badly needed the land and it was well worth the quarter-billion shekels.

Seven years down the line, it seems the IEC never needed the land at all. It certainly hasn't done anything with it, unless you count giving it free to the Ports Authority.

If you follow the papers, you will know that the IEC is one of the most corrupt and bloated public bodies in Israel. Just look at the blatant - blatant? Proud! - nepotism rampant in its ranks, which the management supports wholeheartedly.

Small change

Less well known is the fact that the IEC is like a mini-state within a state, with its own astonishingly huge budgets. That's not a reference to relatively piddling NIS 900 million it pays its people each year, but to its investments budget.

In 2003 the IEC invested almost NIS 6 billion cash in equipment and property. That year was a record one, but in previous years it didn't stint either. In the last three years the IEC has spent NIS 14 billion cash on property, equipment and capital investments.

Nowhere in the private sector are there sums even remotely like that handled by so few people - in this case the IEC's procurement people, top management and handful of dominant directors.

IEC's history is paved with tales of how decisions are made, about its tenders, suppliers, machers and pressures. When the rare scandal creeps into the public domain, the IEC's face looks ugly indeed.

The parade of officials trooping to police headquarters last week due because of the Paritzky - sorry, Maiman; sorry, IEC affair - is a golden opportunity for police and prosecutors to carry out a broad investigation, the first of its kind, into how all those billions are used at the IEC.

A serious investigation would map out the people who made their fortunes off the IEC over the years - suppliers, cronies, mediators, machers, managers, workers - those who drop by drop siphoned off NIS 6 billion in 2003.