Taking Stock / Packs of Friends

A Hirchson. Another milestone was passed as former finance minister Avraham Hirchson found himself convicted of a number of serious crimes.

1. Embezzlement by a manager, a violation of Article 392 of the Criminal Code of 1977.

2. Fraud and breach of duty to the company, a violation of Article 425 of the Criminal Code of 1977.

3. Money-laundering, which is prohibited under Article 3(a) of the Anti-Money Laundering Law, 2000.

4. Falsifying corporate documents, which is a no-no under Article 423 of the Criminal Code of 1977.

5. Breaking the rules governing Knesset members' immunity, rights and obligations pursuant thereto, 1951, namely: the rules banning seated elected officials from receiving material compensation pursuant to their public role.

6. Receiving gains by fraud under aggravated circumstances, under Article 415 of the Criminal Code of 1977.

None of these crimes were committed during Hirchson's stint as finance minister. They began in 1998, eight years before he joined the government under Ehud Olmert.

Why does that matter? It doesn't, from Hirchson's personal perspective. To steal while serving as finance minister would have been hair-raising, but to steal while serving as chairman of a health-care services provider is also revolting. Let's also keep in mind what the specific organization Hirchson stole from actually was: NILI, which in Hebrew at least stands for Jewish Youth For Israel. It runs day-care facilities for children of workers throughout the land and is funded by the Labor and Welfare Ministry.

But in terms of Israel's political and public systems, the fact that Hirchson was stealing (albeit caught only later) eight years before he was named to the fFinance portfolio, is of crucial importance.

The question that the public should be pondering these days isn't what Hirchson did or stole. The question is how a man like that became finance minister.

Was it that throughout his career, Hirchson had a squeaky-clean image of a fine, upstanding personality? Or, did everybody who came into contact with him during the last decade know perfectly well that he was a rotten political hack?

The answer is known. Everybody knew who Hirchson was and why he got the job. They knew he was a petty hack who couldn't separate his public roles from his private ones, or distinguish between the greater good of the public and the greater good of his friends.

Hirchson was named to the job solely because he was a friend of Ehud Olmert, and because the prime minister knew he could "rely" on him. Could he rely on Hirchson to lead the economy to greater heights? To serve as a role model? No, of course not. Olmert could rely on Hirchson to do what he asked, when asked.

Ehud Olmert's weakness for money and rich friends was also well known before he rose to power, and afterwards too. Yet he rose to power. Even if Olmert is vindicated of all charges, his actions, which are not arguable, stink to high heaven, reeking of brutal, unethical, dishonest and unfair conduct.

Hirchson and Olmert are politicians whose power is based on friendships. Their lofty positions attest mainly to the bad norms entrenched in Israel, where friendship supersedes all.

What is friendship, anyway? Does it consist of taking care of friends? Of loyalty? Of making personal sacrifices for people who have accompanied you on the long road?

No, "friendship" in Israel's public and business arenas of 2009 means harnessing public resources, resources belonging to faceless masses, to the weak and the unconnected, in favor of your associates so that they in their turn will harness resources at their disposal to help you. You scratch my back, I'll scratch yours. You steal for me and I'll steal for you.

Legally, it's easier to steal through friends. Its harder to catch the theft, and harder to catch you too. If the friendship is strong enough, if we have honor among thieves, the siphoning can continue a very long time, whether a drop at a time or in great gulps.

Wait a moment, that's how it works everywhere, you huff - indeed, cold comfort. But Israel isn't just another country, and the challenges it faces are far greater. The deterioration of crucial systems is faster here. We will never achieve real change, moving beyond the status quo and ugly cynicism, if we are led by packs of "friends" whose only true concern is how to take care of each other using public money, or by sacrificing the public's future.

Make no mistake. This behavior isn't confined to the public sector. The private and public sectors are intertwined and feed one another. Their norms filter from the one to the other. Israel is only one country, not two, and if theft is the norm in the one, it will the norm in the other.

When we asked Fischer why he was reading out the text, which had been highlighted in yellow, he said it was relevant to small countries.

Twelve years ago the antitrust commissioner, at the time Yoram Turbowicz, said much the same about the danger to Israeli democracy posed by the big business groups. He wrote as much in the preface he wrote for the "Brodet report," compiled by an inquiry headed by David Brodet. The report called for the banks to be forced to divest their non-finance holdings.

Today Turbowicz is in a completely different place, and the politicians and ministers and regulators, who know all about the destructive influence of big business over public systems, prefer to devote their attentions to other things.

Stanley Fischer also hoped when he came to Israel that he wouldn't have to deal with the issue of private business seizing control of public policy. But during his battle to oust the chairman of Bank Hapoalim, he found himself in a situation that reminded him, however slightly, of his days at the International Monetary Fund, when he was trying to carry out structural reforms in places like Russia and Thailand.

It is no coincidence that Fischer is the only one to raise that flag. He is a wealthy man, with all the prestige that a person in his status could possibly build up, and he isn't carrying around a backpack stuffed with friends and their friends.

Which brings us back to A, Hirchson: how economic policy is shaped and run in a country controlled by tight-knit networks of friends - tycoons, politicians, finance ministers, lawyers, fixers and journalists, all bobbing together like kneidlach in the steaming swamp, all scratching each others' backs.