Taking Stock / Sheves Got Off Easy

Aharon Barak took a small step on Tuesday toward halting the deterioration in Israel's standards of government.

Our standards have been crumbling for years. Public officials are acquitted of disgusting corruption charges, a norm of bribery has been spreading, our representatives in government have been chasing the big money and, mainly, shame has evaporated.

The Supreme Court ruling on the prosecution's appeal, demanding a rehearing of the Shimon Sheves case, is crammed with learned legalese about the boundaries of breach of trust and the individual's mental state.

But if you've been following the Sheves case, and the businesses of his contractor friends, if you read the testimonies and the facts in the case, you really won't understand why all the debate was necessary.

Shimon Sheves, as the director general of the Prime Minister Office under Yitzhak Rabin, had tremendous power. He brutally promoted giant transactions for his associates, people who gave him large sums of money before he'd become the prime minister's chief, while he was director general of the PMO and after he left the job.

His close friends, the developers Gil and Doron Schuldenfrei, personally netted tens of millions of shekels thanks to the special treatment they received at the PMO under Sheves. The director general personally pushed their projects through the tortuous real estate bureaucracy. He made PMO workers help the Schuldenfreis and often hosted his friends at the office, so everybody knew how close they were to the throne.

In German, Schuldenfrei means "clean of debt". But the $150,000 the brothers paid to Sheves as soon as he left the PMO and $150,000 they gave him before he joined the PMO show they all had debts to one another. @CROSS:The tremendous cost of corruption

Sheves had another friend, the portfolio manager Moshe Stern. Said Stern was trying to push through a massive armaments deal outside Israel. Sheves, as director general of the PMO, made great effort to help him. Meanwhile Stern managed an investment portfolio for Sheves from which Sheves would withdraw cash whenever he needed it.

The various judges at the various courts accepted some of Sheves' claims, that he had been acting for the public good and with prime minister Rabin's knowledge. But that is arrant nonsense. If you believe that Sheves' promotion of his friends' construction projects in Jerusalem served the public good ("to encourage the construction industry"), you probably still believe in Santa Claus, too. You probably also believe that David Appel paid Gilad Sharon $600,000 to surf the Internet because Sharon junior was so good at surfing.

The judges at the different courts underscored the conflict of interests in which Sheves was embroiled, and the harm he had done to standards of government and to public faith.

But they neglected to discuss the tremendous economic cost of corruption, of the kind in which Sheves indulged. The distortion of resource allocation as corruption spreads is just as serious as the harm done to the public's faith in government. So is the legitimization it receives from feeble rulings by the court.

Acquitting criminals like Sheves, who abused his power in government to advance the greater good of his friends, sends the message that the road to riches isn't hard work and creativity, or leadership: it is contacts in government.

That is the road to ruin for the economy.

The obtuseness of the lower-court judges, who acquitted Sheves, is preventing the higher court from imposing a truly appropriate sentence on him, namely prison. Sad to relate, in Israel the only way to mark a man as criminal is hard time.

And Sheves should be marked criminal, to deter all those pubic officials in power now and in the future from abusing their power to help their friends, in exchange for money, cushy jobs or other benefits when they leave public service for private endeavor.

We can only hope that the special Supreme Court panel ruling on Sheves is just the opening shot in an all-out war to stop the deterioration in the rule of law and government norms, for which the court must share the blame.