Jerusalem’s Leadership Crisis Deepens

By Orly Halpern

Published January 26, 2007, issue of January 26, 2007.
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Herzliya, Israel - When Foreign Minister Tzipi Livni spoke this week before the seventh annual Herzliya Conference on the Balance of Israel’s National Security, her dignified bearing and statesmanlike appeals to Israeli patriotism struck many observers like a breath of fresh air in a smoky room

In the past week, Israel’s leadership scandals spiraled into a full-blown crisis as criminal investigations began toppling some of the nation’s highest-ranking leaders in rapid-fire succession, like so many dominos. Livni, widely seen as having stayed above the fray, appeared this week to be the logical choice, if not the inevitable one, to take over as prime minister when the last domino falls.

The rattling at the top has reached almost historic proportions. Prime Minister Ehud Olmert, already under fire for his handling of last summer’s war in Lebanon, was hit January 16 with news that the Justice Ministry had ordered a police investigation into his handling of a bank privatization two years ago.

Hours later, Dan Halutz, chief of staff of Israel’s most respected institution, the army, announced his resignation in the face of continuing attacks over his role in the war. Halutz is believed to have stepped down to avoid being forced out next month, when a state investigative panel, the Winograd Commission, issues its report on the bungled war.

Halutz’s resignation touched off an embarrassing tussle between Olmert and his defense minister, the widely disdained Amir Peretz, over the naming of a replacement chief of staff. The feuding ended only when Olmert’s candidate, Moshe Kaplinsky, currently deputy chief of staff, removed himself from the race in a public letter accusing Olmert and Peretz of bad faith in the selection process. Kaplinsky faces possible censure in the Winograd report, but he wrote that Olmert and Peretz — who also have just as much reason to fear the report — should have waited for the account before picking a general.

Finally, Israeli President Moshe Katsav suspended himself from office this week after the attorney general announced plans to indict him on rape charges. While the presidency is largely ceremonial, it is held in popular reverence, and the indictment of the incumbent set off shockwaves.

Nor are the shocks finished. Peretz, the defense minister and Labor Party leader, is expected to be forced out by May, when he faces a party leadership primary that he is almost certain to lose. Olmert is already said to be sounding out possible successors for the Defense Ministry, causing grumbling inside Labor over what is seen as interference in party affairs.

Olmert has other troubles. The Justice Ministry has not yet decided whether to open investigations into two other allegations against him, one involving a real estate deal and another involving alleged cronyism in appointments when he was trade minister. And he may be caught up in yet another probe of top officials in the Israel Tax Authority.

Many observers expect Olmert to quit by summer, due to mounting pressure from the police investigation, his dwindling popularity — his poll numbers are below 20% — and the fact that his government is virtually paralyzed. The public sees him and Peretz as too weak to make any decisions.

The man whom Olmert handpicked to serve as finance minister, his close friend Avraham Hirschson, is also under investigation. So are the top officials of the Tax Authority, who are suspected of giving out improper tax breaks to cronies in collusion with Olmert’s longtime personal aide, Shula Zaken. Moreover, any link that turns up between Olmert’s authority and the Bank Leumi investigation would force him to suspend himself immediately.

Once I worked in the good land of Israel,” Judge Micha Lindenstrauss, state comptroller and ombudsman, said this week. “Today I am dealing with the bad land of Israel.”

A recent poll conducted by Market Watch found that some 60% of Israelis believe that the government’s instability is a result of a leadership crisis, but only 43% believe that the investigative agencies — the police, the Justice Ministry and the state comptroller — contribute to national stability. The poll, commissioned by a Labor-linked foundation, the Berl Katznelson Fund, found that 89% of Israeli citizens are not satisfied with the performance of the government institutions.

“Our whole country is corrupt,” said Bila Mor, a 63-year-old housewife from Lod, shaking her head in disbelief. “Olmert, the Tax Authority, the Finance Minister. This is not Begin, Ben-Gurion, Rabin — they were honest people who lived modestly and worried about the country. These guys steal all the time and then wonder why the country has no money.”

One leader still worthy of trust, Mor said, is Livni. “In my opinion, she’s a great woman,” Mor said. “I would vote for her. She has her head on her shoulders.”

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