Why Israel's Political Class is so Corrupt

This week heralds a high-water mark for corruption-busters in Israel: state prosecutors have indicted the most recent prime minister, Ehud Olmert, just five months after he left office, on counts of fraud, breach of trust, falsifying corporate records, and tax evasion. Three of his predecessors were investigated for various offenses, but Olmert is the first prime minister accused in a criminal case. Unfortunately, he has ample company in the political firmament. Former president Moshe Katsav is standing trial for raping and sexually assaulting former female assistants. Another former president, Ezer Weizman, escaped prosecution on bribery and nondisclosure charges (though he was forced to resign in shame) only because the statute of limitations had elapsed. Former finance minister Avraham Hirchson, and former labor and welfare minister Shlomo Benizri reported yesterday to state prisons, beginning their jail sentences for corruption. Attorney General Menachem Mazuz, who has brought Olmert and Katsav to trial, will soon decide whether to indict the sitting foreign minister, Avigdor Lieberman, for fraud, taking bribes, and money laundering. Why are Israeli politicians so corrupt?

The defendants may vary from the greedy to the lecherous, but they share a common thread: senior politicians behaved as if they were untouchable, as if the perks of their public office include illegal payments or sexual exploitation of underlings. Tellingly, none were accused of one-time blunders or of misinterpreting the rules; they were all accused of committing serial crimes.

Take the case of Olmert. According to the indictment, his office—when he was mayor of Jerusalem and then deputy prime minister—ran a sophisticated system to overbill for speaking engagements at galas for charities and NGOs, such as Yad Vashem (the national Holocaust memorial) and Friends of the Israel Defense Forces. Through a travel agency, which served as the unindicted co-conspirator, fake itineraries were presented to the NGOs and to the state, resulting in overlapping payments for Olmert's first-class flights and luxury hotels. The extra payments of $92,000 over three years were collected by the travel agency, and then used as a slush fund to pay for overseas trips by Olmert's family members. The account was still in use when Olmert served as prime minister and led Israel during the 2006 war in Lebanon.

The secret travel fund was discovered by a fluke, when the police searched Olmert's office records in a different investigation. It also led to the exposure of Morris Talansky, an American businessman and fundraiser who had, for years, given Olmert cash-filled envelopes for campaign and personal use, and whose pretrial testimony led to the prime minister's resignation last year. The subsequent indictment offers a rare peek into the backyard of high political office in Israel: Olmert (guilty or not) comes off as an insatiable hedonist, constantly upgrading his flights and hotel suites, rubbing shoulders with rich American Jews, traveling to their parties, asking them for favors. "In his actions, the defendant has libeled the country … and hurt the reputation of the Israeli civil service and the State of Israel," says the indictment.

Hirchson and Benizri, the jailed former ministers, were even less sophisticated. Hirchson—who initiatied the yearly "march of the living" to Auschwitz—was convicted for stealing hundreds of thousands of dollars from a trade union he was chairing before joining the cabinet. Some of the stolen money was used to buy Victoria's Secret lingerie for Hirchson's girlfriend. Benizri was bribed by a government contractor in return for assistance in foreign workers' recruitment. President Katsav was surrounded by several women who testified on rape and sexual assault, but due to the statute of limitations, only one rape charge went to trial. Two years ago, Katsav agreed to a plea bargain on minor offenses but rescinded the deal. He argues that it is only a sham—that he was libeled by angry former assistants and overzealous prosecutors. A couple of years ago, Israel's then justice minister, Haim Ramon, was convicted for forcibly French-kissing a female military officer; he served several months' time of labor on a horse ranch.

Part of the mindset that allows the powerful to believe they can get away it is a legacy from the early days of the Israeli state. After independence, the ruling elite closed ranks and avoided public exposure of corruption at the top. Building the Jewish state was paramount, and the system turned a blind's eye to personal weaknesses, as long as they served the higher political goals. When the Jewish Agency comptroller reported on corruption, Levi Eshkol, then finance minister, argued that you shouldn't "hold an ox in threshing"—meaning that nation-building was more important than justice. But the Yom Kippur War of 1973, in which Egypt and Syria attacked Israel by surprise and the country lost thousands of youngsters, was a political watershed. Public anger forced out the veteran leadership and held it responsible for the military failure.

That's when sacred cows began to come under attack. The Police Fraud Squad and prosecutors led by Aharon Barak—later Israel's chief justice—investigated senior officials, including a cabinet minister (who committed suicide) and a nominee to govern Israel's central bank, who served several years in prison for taking bribes. Even Prime Minister Yitzhak Rabin was forced to abandon his campaign for another term in 1977 when a Washington bank account—illegal at the time—was exposed in the press. (Rabin's wife, Leah, took the rap, which allowed him to stay in politics and eventually make a comeback 15 years later.) The spate of cases helped bring down the Labor Party and inaugurate the rise of Israel's right wing in 1977.

Still, however shocking the 1970s-vintage brand of corruption seemed at the time, it's different from what has befallen Israel today. Then, defendants' excuse was that they had embezzled "on behalf of the party," which often enough was true (though plenty also took some on the side). Since then, Israeli society has shed the socialist manners of its Founding Fathers. Free-market reforms allowed big business to extend its influence into politics, and corruption, too, was privatized: none of the current defendants and suspects argues that his actions served a higher authority or cause—only personal greed.

Public officials like Olmert, who interact socially with foreign magnates and the moneyed elite, apparently feel the urge to behave like their rich acquaintances—if not in their bank account, at least in their expensive lifestyles. In previous years, criminal cases also stemmed from the primary system in Israel's major political parties, which tempted candidates to raise funds outside the legal limits from local and foreign donors—in return for post-election favors.

By indicting so many top pols, including a former prime minister, Israel's judicial system has shown courage and independence in the face of authority. But prosecuting high-level officials is not enough if investigators don't change the norms and deter the next generation of leaders from following their corrupt predecessors. It's a challenge that Israel's corruption-busters haven't even yet begun to meet.

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