Treasury Demands BoI Explain Excess Pay

Hearings are first step in forcing Bank of Israel officials to repay benefits

The treasury's wages director, Eli Cohen, yesterday demanded that the Bank of Israel supply him with full details of salary conditions and all other benefits awarded to the senior management of the central bank, it seems unlawfully.

The information is to be provided in preparation for a hearing the treasury will hold on the matter, to decide on the repayment of such monies.

Cohen demanded that the Bank of Israel provide him with all the details pertaining to all past and present senior management, without limiting the request to a specific time period. He is also demanding a detailed list of all the monies they were paid, in order to examine whether - and how much - they may have to repay.

Among other senior officials, Cohen is requesting information on Supervisor of Banks Rony Hizkiyahu, former BOI director general Yaakov Danon, the head of human resources, Raphael Lankri, and others.

According to Cohen, it seems as though senior officials appointed since 2005, when Stanley Fischer took over as governor, enjoy wages and conditions that are not acceptable in the civil service.

Cohen also sent copies of his letter to the state comptroller, the attorney general and the finance minister. The actual letter to the bank was sent to Lankri, since Danon has left his post and no replacement has yet been appointed.

Cohen notes that according to a December 2006 agreement signed with the bank, and facilitated by the Prime Minister's Bureau, Hizkiyahu's salary should have been NIS 44,728 a month, and Danon's NIS 41,843. However, both of them get over NIS 50,000 a month. Other senior officials are also allegedly overpaid.

The hearing will be conducted by a deputy director general in Cohen's division, Shmuel Nahmani, who is responsible for enforcement.

The senior officials involved will not be invited personally - instead, the bank's director general or head of human resources will represent the bank and explain its position.

Some of the ways in which the Bank of Israel increased its senior officials' salaries:

? Senior management automatically receives maximum seniority pay, as though they had worked at the bank for 40 years, regardless of how long they have actually worked there.

? All senior management receive the same grants given to civil servants after 25 years, regardless of their period of service.

? Senior management are provided with government vehicles, and are also reimbursed for their private car expenses, as opposed to the rules applying to all other civil servants.

? Former management appointed before 1996 received pension benefits calculated at 4% per year of service, as opposed to 2% for other government employees.