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PP RUEHROV
DE RUEHTV #4742/01 3401241
ZNR UUUUU ZZH
P 061241Z DEC 06
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 8029
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 TEL AVIV 004742 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PINR KJUS IS
SUBJECT: THE PROPER ORDER OF GOVERNMENT: CORRUPTION AND THE  ROLES 
OF THE ATTORNEY GENERAL AND THE STATE COMPTROLLER 
 
 
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SUMMARY 
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¶1.  The proliferation of allegations and investigations into the 
conduct of public sector officials recently prompted questions as to 
whether Israel's norms of public life have indeed reached an 
unprecedented nadir, or whether oversight in the person and 
functioning of the Attorney General and the State Comptroller is 
characterized by unprecedented zeal.  Is ever-widening corruption 
driving the preoccupation with norms of public conduct or is Israel 
merely witness to a revamping of ethical norms and levels of 
transparency?  Either way, the guardians of public interest and the 
rule of law are finding themselves in the eye of a storm which could 
terminate some high-profile careers along the way to higher ethical 
standards in Israel's public sector. 
 
--------------------- 
THE PEOPLE'S ATTORNEY 
--------------------- 
 
¶2.  Menachem Mazuz, the current Attorney General, walks a fine line 
between serving as legal counsel to the government and as guardian 
of the public interest. As the final arbiter of whether 
investigations warrant indictment of an individual or the closure of 
the file, the Attorney General has exclusive authority which may 
only be overruled by the Supreme Court.  His legal opinions are 
binding on government agencies and he bears responsibility for the 
consistency of government legislation with the Basic Laws of the 
state.  Complicating the role of the Attorney General is the fact 
that while his office is designated as a non-political entity, he is 
appointed by the government on the recommendation of a professional 
public permanent committee (chaired by a former Supreme Court 
Justice), for a non-renewable tenure of six years (or until the age 
of 70, the earlier date prevailing), with a possible extension of 
six months.".  (Note: Mazuz was the first Attorney General appointed 
under this process in 2004.  Then-PM Sharon and Minister Olmert 
abstained from participation in the government appointment process 
due to ongoing investigations.  Mazuz later indicted Sharon's son, 
Omri, but never issued a formal indictment against the former Prime 
Minister.)  The guidelines for his office stipulate political 
neutrality while defending the state in legal proceedings, alongside 
the defense of civil liberties. 
 
--------------------------- 
THE POLITICS OF PROSECUTION 
--------------------------- 
 
¶3.  If all these seeming "conflicts of interest" were not 
sufficient, Israel's Attorney General operates in an environment of 
ongoing political turbulence in which the fate of senior public 
figures at the hands of the judiciary may have significant political 
consequences for Israel and, on some occasions, even its neighbors. 
The most notable dilemma of this kind, faced by the present Attorney 
General, was the investigation of the role of then PM Ariel Sharon 
in the "Kern loan affair" and the funding of Sharon's Likud party 
leadership election campaign.  The case reached the scrutiny of the 
Attorney General during the sensitive prelude to implementation of 
Sharon's disengagement plan and has yet to be closed.  Prominent 
among the many investigation files still on the Attorney General's 
desk are those of President Katzav in regard to sexual harassment 
and the issuing of pardons; PM Olmert in connection with real estate 
and privatization deals; and the ever-pending investigation of 
Minister for Strategic Threats Avigdor Lieberman on suspicion of 
illicit business deals during the Russian ruble crisis in 1998 and 
corruption linked to Likud party campaign funding in the same year. 
 
------------------- 
ORDER OF PRECEDENCE 
------------------- 
 
¶4.  While the Attorney General's powers clearly exceed those of the 
State Comptroller, the process of audit precedes the order to 
investigate and the decision to indict.  Israel recognized the 
importance of the audit function as far back as 1949 when it enacted 
the Basic Law: the State Comptroller and reinforced the office in 
1971, when the function of Ombudsman was added to the State 
Comptroller's duties. In this capacity, the State Comptroller is the 
recipient of complaints from any persons who deem themselves harmed 
by a public body which is subject to the Comptroller's audit.  State 
audit in regard to regularity, legality, efficiency, economy and 
moral integrity of state bodies is the primary function of the 
Comptroller's office.  Since 1973 the State Comptroller also audits 
the accounts of the political parties.  The State Comptroller is 
elected by and accountable to the legislature.  Audit findings are 
submitted to the Knesset. But findings which give rise to suspicion 
of criminal action must be referred to the Attorney General. 
 
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ENTER THE ACTIVIST AUDITOR 
-------------------------- 
 
TEL AVIV 00004742  002 OF 003 
 
 
 
¶5.  Distinct from the role of Attorney General, the State 
Comptroller's authority is defined in law [State Comptroller Law 
1958], thus leaving little to conjecture or interpretation.  This 
fact serves the present Comptroller well amidst the controversy that 
has been stirred up by his unanticipated activism.  For as long as 
there has been a State Comptroller's office, its reports have 
elicited, at best, some momentary indignation and more often a 
lengthy "yawn" from the pundits and media alike.  Micha 
Lindenstrauss, who was elected by the Knesset in 2005, is working to 
change all that.  Whereas previous State Comptrollers completed 
their reports, submitted their findings and left it to the Knesset 
or the Attorney General to decide on further action, if any, 
Lindenstrauss has flagged certain issues for the attention of the 
Attorney General even prior to completion of his audit.  In doing so 
Lindenstrauss bases himself on Article 43D of the State Comptroller 
Law which provides that suspicion of a criminal offence is grounds 
for the involvement of the Attorney General, who then has six months 
within which to advise the State Comptroller and the Knesset 
Committee on State Control of the manner in which he has dealt with 
the matter.  This effectively introduces checks and balances in 
regard to the functioning of the Attorney General. Lindenstrauss has 
invoked his powers in this manner in no less a case than the 
investigation of the prime minister's involvement in the sale of 
Bank Leumi, and has found himself under severe criticism from a 
surprising quarter. 
 
--------------------------------- 
LINDENSTRAUSS IN THE LINE OF FIRE 
--------------------------------- 
 
¶6.  In the wake of a flurry of disclosures in the media regarding 
investigations by the State Comptroller of high-level political 
figures including PM Olmert, five prominent professors published a 
vituperative attack on Micha Lindenstrauss. The broadside, accusing 
Lindenstrauss of threatening "the proper governing order in Israel," 
was published in early November as an advertisement on the front 
page of the Ha'aretz daily newspaper and simultaneously in the mass 
circulation Yediot Acharonot. The professors, including Arik Karmon, 
the president of the Israeli Institute for Democracy, Amnon 
Rubinstein, president of the Herzliya Interdisciplinary Center and 
Yaffa Zilbershatz, Dean of the Law Faculty at Bar Ilan University, 
accused Lindenstrauss of "irregularities and misconduct" and alleged 
that his office, specifically his advisor on corruption issues, 
former Israel police commander Yaakov Borovsky, was deliberately 
leaking information to the media on sensitive aspects of 
investigations in progress. 
 
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ALLEGEDLY OUT OF CONTROL 
------------------------- 
 
¶7.  One of the five professors, Shlomo Avineri of the Hebrew 
University's Department of Political Science, was widely interviewed 
by the electronic media and went as far as to allege that a form of 
witch-hunt was in progress.  While concurring that the 
investigations were legitimate and necessary, Avineri insisted that 
the leaks to the media prior to completion of the comptroller's 
investigation were unacceptable.  The public, Avineri claimed, 
viewed these leaks as actual findings without benefit of a hearing. 
Investigations, Avineri declared, must be carried out discreetly 
and, if the findings warranted it, they should be submitted to the 
public, the Knesset and the police.  The State Comptroller's office, 
he said, had until now been free of politicization, and had been 
held in high regard.  It was the job of the investigators, Avineri 
affirmed, to fight corruption and not to fight heads of government. 
If they were fighting the heads of government that was a political 
matter and its place was within the political system.  Asked if 
there was a possibility that political motives were involved in the 
conduct of the State Comptroller, however, Avineri said he would not 
dream of making such an allegation. 
 
------------------------------ 
TAKING ON THE STRATEGIC THREAT 
------------------------------ 
 
¶8.  Whatever the motive force driving the activism of the present 
State Comptroller, the consequences of his activism have the 
potential to galvanize oversight and control in ways that can only 
benefit compliance with reasonable ethical norms in public life.  As 
far back as April this year, Lindenstrauss admitted that he had 
discovered that "governmental corruption is broader and deeper than 
what I thought...."  In an interview with Yediot Acharonot, 
Lindenstrauss identified what he deems a greater evil than 
corruption itself: "I found initial signs of something very 
dangerous: Acceptance of corruption." 
 
----------------------------------- 
CORRUPTION IS NOT THE GREATEST EVIL 
----------------------------------- 
 
 
TEL AVIV 00004742  003 OF 003 
 
 
¶9.  Israel's standings in a comparative international index of 
perceptions of corruption show a progressive deterioration in 
Israel's rankings.  A report by Transparency International, issued 
in early November, showed Israel ranked 34 out of 163 countries 
placed in descending order, compared with 28 in 2005 (26 in 2004; 21 
in 2003; 18 in 2002; 16 in 2001).  Transparency International plans 
a study of corruption in Israel in 2007, but until such a study is 
undertaken, there is scant indication of whether corruption in 
Israel has increased internally.  What is clear is that the activism 
of State Comptroller Micha Lindenstrauss is controversial not only 
among the subjects of his scrutiny but in academic and intellectual 
circles which pose disturbing questions as to who should watch over 
the watchdogs of "proper government". 
 
----------------------------- 
THE DEMISE OF THE SACRED COWS 
----------------------------- 
 
¶10.  In recent days, the Knesset Committee on State Control invited 
Lindenstrauss to answer his critics in a special session dealing 
with the allegations of leaks from his office.  Lindenstrauss told 
the committee that he was undeterred by the accusations that he was 
persecuting the prime minister or exceeding his purview: "There are 
no more sacred cows" he declared.  "This is over. Everyone is 
equal... There are no more situations of sweeping matters under the 
carpet. That is over. Matters will be open, transparent; people will 
know what is going on." 
 
JONES