State Comptroller to Blast Barak Over Consulting Firm

State Comptroller Micha Lindenstrauss is expected to harshly criticize Defense Minister Ehud Barak in a special opinion to be published today on the company Barak transferred to his daughters upon entering the cabinet.

The opinion, which is being published along with the annual State Comptroller's Report, was requested by the Knesset's State Control Committee.

Ehud Barak - Nir Keidar - May 2011.
Nir Keidar

In addition to criticizing Barak's behavior, it is expected to lay down ethical guidelines for what ministerial candidates may and may not do.

Barak set up the company, an international consulting firm named Ehud Barak Ltd., in 2002, a year after losing a special election for prime minister.

In June 2007, a few days after winning the Labor Party's leadership primary, he transferred the company to his three daughters. Three days after that, he joined the Olmert government as defense minister.

Lindenstrauss examined the transfer in light of the Asher Committee rules, which were formulated to prevent conflicts of interest between a minister's (or deputy minister's ) public duties and his business interests. The rules are supposed to sever the minister completely from such interests.

According to an investigation by Haaretz journalist Uri Blau, Barak's former company has earned revenues of about NIS 6.5 million since he took office in June 2007. Of this, some NIS 5 million went directly to Ehud Barak Ltd. and the remainder to a subsidiary called Cardo Business Development Ltd.

Lindenstrauss is expected to criticize Barak for transferring the company only three days before his appointment, instead of immediately after winning the primary, since that victory guaranteed his entry into the cabinet: The Defense Ministry had previously been held by the man he beat in the primary, Amir Peretz.

The comptroller is also expected to slam Barak's refusal to let Lindenstrauss scrutinize the company, as Asher Committee rules require.

An associate of Barak's yesterday denied that Barak had violated any rules in the matter.

He also stressed that the report found no hint of criminal activity on Barak's part, nor any suspicion about the legitimacy of the firm's revenues since June 2007.

The State Comptroller's Report will also include 16 chapters and two special opinions on other topics, making it the largest such report ever published.

Topics addressed include the Israel Broadcasting Authority, the Second Television and Radio Authority, the national lottery, illegal internet gambling, the Israel Tax Authority, high school trips to Poland, claims of ethnic discrimination in ultra-Orthodox schools, Tel Aviv University's executive committee, animal experimentation, suicides among prisoners in jails, and development work by the Waqf (Muslim religious trust ) on the Temple Mount.