Taking Stock / Salami Alert!

"As a person who served as communications minister and was exposed to the great intensity of "wealth and power," and who withstood the various pressures and temptations, I am convinced that there, in the limbo between politics and economics, is where lies the subject that we convened this morning to discuss. Not in the question of this or that minister who did or did not give some miserable job to a party member." (Reuven Rivlin, speaking at the Sderot Conference on corruption last week.)

That is what Rivlin said, clear as a bell, though he didn't elaborate.

What did he mean when he said that as communications minister, he'd been exposed to the great intensity of wealth and power? Did he mean people had tried to intimidate or bribe him? What is the "limbo" between politics and economics? Why is Rivlin so confident that's where the true corruption lies?

Maybe the incumbent communications minister, Ehud Olmert, and the director-general of the Prime Minister's Office, Ilan Cohen, can understand what Rivlin was trying to say. Naturally, they won't tell us about it now, maybe in 10 or 20 years down the line. but chances are they have a story or two about the behavior Rivlin hinted at in the "limbo" zone.

Take Olmert, for instance. One Thursday two months ago, he declared that he'd adopted the recommendations of the British company, Analysys, and would be terminating the disgrace of cellular companies charging users for incoming calls.

The cellular firms win a big one

He announced he would be slashing interconnection fees from 53 agorot a minute to 32 agorot and then to 17.7 agorot. Cellular users gave the minister a standing ovation, and certainly Olmert knew his timing: The announcement made the Friday papers.

But the cellular companies didn't sit there and take it. They stampeded the press, sending top reps to meet with all the relevant editors and journalists; they hired PR experts and lobbyists and analysts, and they fought back.

The cellular companies dredged out mistakes in Analysys's report, and the minister subsequently appointed two more experts to revisit it.

Somehow, it will be little surprise, very little, if Olmert retreats from most of the interconnection fee cut. Apparently, instead of dropping to 17.7 agorot a minute, they will fall to just 41 agorot a minute.

The cellular operators just can't believe how successful their mettle proved. A month ago, the chief executive of one of the companies presented mistakes in the Analysys report to Haaretz. To be fair, the CEO agreed that interconnection fees should drop, but he felt that Olmert was getting carried away. The price shouldn't drop below 36 agorot, he said.

Yes, 36 agorot, he said. And now Olmert's talking about 41 agorot, including VAT. Later, the ministry will consider applying a single tariff for all cellular calls. Read: The cellular companies got their wish.

Agorot - make no mistake. Each agora in the interconnection fee brings the cellular carriers NIS 85 million a year.

Here come the bankers

Now comes the turn of the bankers. On Sunday, the cabinet will begin debating the Bachar reform, but the Prime Minister's Office is already sharpening its sword. The cabinet resolution will apparently state that it approves the report, aside from a few clauses that require further examination.

This is how the salami tactic is likely to work. Ilan Cohen, the director-general of the Prime Minister's Office, will suggest the first slice. Ministers who have met with the bankers will suggest a few more of their own.

Then the report will trundle onto the Knesset, where there are plenty of Knesset members all too happy to cooperate, behind the wings, with the bankers, and to propose "changes" of their own. Each one will cut off another slice for presentation to the bankers: "See what I brought you. Don't forget me."

Between the various pieces of salami falling off the report, items will appear in the press, for instance saying that Ram Caspi, the lawyer representing the banks, is already preparing a High Court of Justice case against the Bachar report. This will help the Knesset members to hack away. Meanwhile, the bankers will continue their aggressive campaign to frighten their ignorant customers, and the pressure to compromise will mount and mount.

The big question is whether the ministers, the Knesset members and all the other bureaucrats stirring the stew of the reform will condescend to abandon their favorite role, "dealmaker", the ones presenting nicely packaged slices of salami to the bankers.

If Netanyahu doesn't want the Bachar reform to end like the interconnection reform, if the ministers don't want to be remembered as the ones who ruined the greatest economic reform in history, they'd better made it clear that the cabinet has to approve the report as is on Sunday.

To borrow from Rivlin, they'd better do everything they can to save the reform from the limbo between politics and economics.