Behind the Headlines; Deri Scandal Grabs Israeli Headlines, Could Have Major Political Fallout

For the first time in a month, the Persian Gulf crisis has been squeezed off the front pages of Israeli newspapers to make space for coverage of a burgeoning public scandal that has all the makings of an Israeli-style Watergate affair.

The drama centers around Interior Minister Arye Deri, but other main players include Police Inspector General Ya’acov Terner and Mordechai Gilat, an investigative reporter for the mass-circulation daily Yediot Achronot.

On Tuesday, a team of five senior police investigators drove into the Interior Ministry in Jerusalem and closeted themselves with Deri for what was to be the first of several interrogation sessions.

As dozens of reporters and photographers milled around the courtyard of the Interior Ministry, police sources told Israel Radio there was already sufficient evidence of wrongdoing to bring charges against the minister.

The affair is replete with legal, political, ethnic and religious overtones. The High Court of Justice is already heavily involved, and the repercussions could yet affect the stability of the Shamir government — just as it is strengthening its base of popular support through its cool handling of the Persian Gulf crisis.

The story started earlier in the summer, when Gilat began publishing a series of expose pieces in Yediot, alleging that the Interior Ministry under Deri was illegally funneling vast sums of taxpayers’ money, through cowed or compliant local authorities, to educational and social institutions affiliated with Deri’s Shas party.

SCANDAL ESCALATED WITH WIRETAP

Deri and his supporters launched a spirited counterattack, publishing a series of full-page ads in all newspapers other than Yediot accusing the paper and its reporter of ulterior motives, anti Sephardic sentiments, deliberate distortion and discrimination by singling out Deri and his ministry for a practice that is widespread in the Israeli bureaucracy.

They insist there has been no wrongdoing or illegality. Deri maintains that all funds paid out by local authorities were properly budgeted and accounted for and that there was no reason for these authorities not to help fund Sephardi Torah institutions operating within their localities.

The affair had been simmering for several weeks, as senior police investigators collected information from local authorities, rabbis and educators all around the country, in preparation for what was to be the climax of the investigation: the interrogation of Deri himself. The police had earlier seized crates full of documents from the Interior Ministry offices in Jerusalem.

But a new, explosive twist to the scandal surfaced dramatically when an illicit bug was discovered in Gilat’s apartment, complete with sophisticated recording equipment hidden in a motorbike parked outside.

Since that development last week, the action has intensified. The police have made a series of arrests in connection with the wiretap. Among those held is the parliamentary aide of one of the Shas Knesset members, Rabbi Arye Gamliel. Other arrests include shadowy figures, among them a former policeman who reportedly taps phones on contract for criminal elements.

By law, only a district court judge or, in cases of national security, the minister of defense, can permit a wiretap.

TAPE MYSTERIOUSLY SURFACES

Police sources have leaked that the tapes of the wiretap had been making their way to Shas circles, perhaps even to Deri’s office.

Deri and his supporters have hit back with leaks of their own that one tape records a conversation between reporter Gilat and Inspector Terner, in which the journalist appears to be leading the police investigation with information of his own. Shas sources contended that Gilat had an ax to grind and got Terner do his bidding.

Terner at first dismissed this account. By midweek, though, he was saying that there is nothing wrong with the police receiving information from investigative reporters.

When Communications Minster Rafael Pinhasi, a Shas colleague of Deri’s, raised the issue at Sunday’s Cabinet meeting, Terner said the police did not have the tape in question, only a purported transcript of it, picked up at the home of one of the men arrested in the wiretap affair.

But an anonymous hand straightened out that problem on Monday, leaving a purported copy of the tape in a Tel Aviv cafe located close to the Special Branch headquarters of the police. It was found and turned over to the men in blue.

What, then, is on the tape? The answer to that seemingly plain question was still shrouded in mystery by midweek.

No one could officially admit to having listened to the tape, because the High Court of Justice, at the behest of Gilat and other journalists, slapped a temporary injunction forbidding the tapes to be heard, on the grounds that they were the product of a criminal act, the wiretap.

The Knesset Interior Committee, which met with Terner on Monday and had intended to hear the tape, recessed without hearing it.

The legal question of whether the tapes can be used in evidence on matters not directly pertaining to the wiretap investigation will eventually be decided by the court.

CLASH WITH LIKUD POSSIBLE

Political analysts, meanwhile, are speculating on the broader impact of the affair.

Some believe that if Deri succeeds in turning the tables on his accusers and emerges unscathed, there will be a sweeping revival of Shas’ popularity in the Sephardi sector. It could quickly wipe out the memory of the political setback suffered by the party after the coalition crisis in March, when Shas sided with the Labor Party in bringing down the government and then backed Likud.

The scandal could also have political repercussions if Deri and Shas come to the conclusion that either Labor or Likud had a hand in the campaign against the interior minister.

Others suggest that Deri’s fight to clear his name and impugn others could lead to conflict between Shas and Likud. Police Minister Ronni Milo of Likud has so far stood solidly behind the police chief, while Prime Minister Yitzhak Shamir has sought to remain neutral.

A battling Deri could cause major political and social repercussions, too, if significant numbers of Shas sympathizers buy the line that ethnic and/or religious discrimination lie behind the police investigation.

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