Looking for Knesset Toehold, Oligarch Cozies Up to Pensioners

By Nathan Jeffay

Published May 22, 2008, issue of May 30, 2008.
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Haifa, Israel — Ehud Olmert, already struggling with a corruption investigation and criticism from left and right over a troubled peace process, now faces a new, potentially crippling threat to his political survival: squabbling retirees.

The Pensioners Party was a powerless splinter from its birth in the early 1990s until the elections of 2006. That year, the party, known by the Hebrew acronym Gil, polled an unexpected 186,000 votes thanks to widespread voter disgust with the major parties. It won seven seats in the 120-member Knesset and agreed to prop up the Olmert coalition in return for two ministerial portfolios. Olmert’s majority today is exactly the same size as the party’s Knesset caucus, meaning that the pensioners have the power to make or break the prime minister’s administration.

Though loyal to Olmert for two years, party infighting resulted last week in three Gil lawmakers informing the Knesset that they want to break away. The remaining four Gil representatives say they will refuse to sit in a coalition alongside the defectors. This will reduce Olmert’s majority to an unstable three or four, depending on which group he keeps on board.

The split is ostensibly the product of a personal power feud between two grandfathers: Moshe Sharoni, 79, the party’s initial caucus whip, and Yitzhak Galanti, 71, who wrested the post in October 2007.

But the pensioners’ feud is threatening more than just Olmert. The defectors face accusations of threatening the very fabric of Israeli democracy. Their faction is to be bankrolled by Russian-Israeli billionaire Arkadi Gaydamak, a notoriously free-spending mogul who is not a member of the Knesset. If the faction joins Olmert’s coalition in return for a Cabinet seat, a familiar Knesset practice, Gaydamak, over an elected lawmaker, would take the ministry.

Opponents now charge that political power is being bought and sold. “This is the prostitution of Israeli democracy,” Galanti charged in an interview with the Forward.

Gaydamak, the best-known Russian oligarch in Israel, is already famed for his generosity. He aided northern Israeli towns damaged in 2006, during the Second Lebanon War. In November of that same year, he bused 800 residents of rocket-plagued Sderot to Eilat for all-expenses-paid vacations. He has described himself as “the most popular public figure in Israel.”

Gaydamak is renowned for reasons less savory, as well. He faces two French arrest warrants for supposedly selling heavy weaponry to Angola during the country’s 27-year civil war. Israeli police are investigating suspicions that Bank Hapoalim officials helped him in 2000 to transfer 450 million shekels out of the country without reporting the transfers to the Bank of Israel, as required by law. As recently as May 19, as his alliance with the pensioners became public, he was questioned by police over a transfer in 2000 of nearly half a million shekels as part of this saga.

Long viewed as politically ambitious, Gaydamak is currently testing the waters on two fronts. On one, he is running for mayor of Jerusalem in a fall election. On the other, last July he launched his own national political party, Social Justice, after claiming that the country needs the sort of change that only a new party can offer. The party’s ideology is vague, vowing to preserve democratic values, promote equality and protect human dignity and freedom — without specifying how any of this would be done.

While he has boasted that his party will have 20 Knesset seats after the next elections, his deal with the breakaway pensioners would be his first toehold. The pensioners’ feud was bubbling under the surface for months, but Knesset rules prohibit parties from splitting until two years after elections. When the watershed passed on March 28, Gaydamak’s goal of a Knesset base came into view. He emerged as the chairman and funder of the new faction, which will be a subsection of his own party.

In order to qualify for house recognition, any breakaway faction in the Knesset must include one-third of the party’s lawmakers. Sharoni met this target early this month, persuading two colleagues, Elhanan Glazer and Sarah Marom-Shalev, to join him. On May 19, he asked the Knesset House Committee to approve the formation of the Social Justice for Pensioners Party.

Committee discussions were angry. Shelly Yacimovich of the Labor Party called the Gaydamak-pensioners alliance “a shameless and criminal agreement” and charged that “Knesset rule is being bought.” Zahava Gal-On, chair of the Meretz caucus, voiced fear “that an extension of the mafia is being created.”

Even before the committee met, Knesset legal counsel Nurit Altstein raised written concern that “at first glance, it seems as if this agreement lacks provision of law.”

The hostile reaction prompted the breakaway pensioners to withdraw the request. They are currently drafting a new request based on new legal arguments. Sharoni spokeswoman Leah Aravid told the Forward that the defectors had met with lawyers who are to change their agreement with Gaydamak.

“We then expect the Knesset to approve the separation,” she said.

Galanti, however, maintains that any arrangement letting Gaydamak fund the party and gain influence should be thrown out. “People voted for the Pensioners Party, and instead they are getting Gaydamak. This is unacceptable,” he told reporters recently.

Galanti has spoken widely in the Israeli media of his alarm that the arrangement, if approved, would set a precedent for wealthy Israelis “buying” political power. In an interview with the Forward, however, he raised a new concern — that the culture of Diaspora donations to Israel could degenerate into one where givers expect power in return for their money.

“This is opening a whole new game,” he said. “It can make people abroad think they can use money for their own benefit — that they buy a Knesset member and expect what they want to happen will happen.”

Thus, he warned, “buying a party in Knesset” could replace raising money for social causes or making contributions to political parties. This could even be done with the best intentions of shaping Israeli society for the good, he said, but in taking away control from Israel voters it “could ruin Israeli democracy.”

Sharoni’s camp denied any impropriety. “Sharoni says there is no buying of anyone,” Aravid said. “It is just a political move, because we know that Gaydamak will probably be in the next Knesset, so it makes sense to come together” to increase faction size. “This doesn’t mean we are being bought with money.”






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