With Olmert and Peretz on the Ropes, Israel’s Big Bang Looks Like a Big Bust

Six months ago, Defense Minister Amir Peretz seemed far and away the Labor Party’s best ticket to power. Now, after what’s seen as the Israel Defense Force’s poor performance during the war with Hezbollah, Peretz’s political future is under a cloud. Party strongmen claim that the former workers leader has lost his way and has no clear agenda, and they’re clamoring to replace him as party boss.

Prime Minister Ehud Olmert doesn’t face quite the same pressure in his Kadima Party, but he also is in deep trouble: He faces mounting public criticism over the overall conduct of the war, and two potentially career-threatening investigations by the state comptroller — one for alleged cronyism in government and the other for suspected irregularities in the purchase of a luxury home in Jerusalem.

On Monday, State Comptroller Micha Lindenstrauss urged the attorney general to open criminal proceedings against Olmert.

Less than six months after they emerged as the two big winners in Israeli elections, Olmert and Peretz are fighting for their political lives. Olmert is considering a government reshuffle to improve their images, but it might be too little too late.

Peretz had been in the defense job for a little more than two months when the war broke out. He could not fairly be censured for the IDF’s lack of preparedness, yet he did take the blame for hesitancy in the decision-making process, not asking the military key questions and not seeming to have a clear war plan.

Even worse, Peretz stands accused of taking on a job he was patently unsuited for in a bid to upgrade his political credentials after advisers reportedly told him that a stint in the Defense Ministry would fill a lacuna in his political CV and serve as a stepping stone to the premiership.

At the time, party rival Matan Vilnai, a former general, warned that Peretz’s “tuition fees” at Defense might be paid with Israeli lives. Vilnai quickly apologized, but now says that had he known what was about to happen, he would not have recanted.

Vilnai is one of a number of Labor heavyweights openly challenging Peretz for the Labor leadership. Others are Dani Yatom, former head of the Mossad spy agency; former president of Ben-Gurion University, Avishai Braverman; and Ami Ayalon, who commanded the Navy and later the Shin Bet security service. Braverman and Ayalon are working together to unseat Peretz. Outside the Knesset faction, former Prime Minister Ehud Barak is another potential leadership challenger.

Some activists are urging Peretz to hand the defense portfolio to a more experienced candidate — such as Barak — and take a socioeconomic portfolio for himself, rebuilding his credibility in a sphere that he knows.

Party rebels portray Peretz as not just an incompetent defense minister but as a traitor to the social agenda on which he ran, since he’s now pushing for bigger military budgets to pay for the war and prepare for future threats. Their criticisms, designed to advance their candidacies against Peretz, are hurting Peretz’s public stature — and the more his approval rating drops, the more emboldened his party rivals become. They now are trying to get Labor leadership primaries, scheduled for next May, advanced by several months.

To blunt the criticism, Peretz has come out in favor of a full-fledged state commission of inquiry into the war. The message to the public is that he has nothing to fear from a thorough examination of the way the war was handled.

Peretz says he wants the commission to go back at least six years and examine the extent to which his predecessors at defense — Barak, Labor’s Binyamin Ben-Eliezer and Kadima’s Shaul Mofaz — were to blame for the army’s lack of preparedness.

Olmert’s troubles start with wide public perceptions that the war was poorly managed. The fact that he opposes a full-fledged state commission of inquiry in favor of smaller, more limited inquiries isn’t helping his cause.

More damaging for the prime minister are the comptroller’s allegations that Olmert broke the law in appointing unqualified party activists to civil service posts when he was minister of industry and trade and in a transaction to buy a home in Jerusalem’s upscale German Colony. If either of those cases leads to criminal proceedings, Olmert’s career could be ruined.

Olmert is confident that nothing will come of the comptroller’s investigations. His confidants charge that Lindenstrauss is pursuing a personal vendetta against the prime minister, and Olmert insists he’ll see out his term.

Olmert is considering several options to shore up his political position. They include a small Cabinet reshuffle, under which Peretz moves to the Treasury and a strong Kadima candidate gets defense; or a larger Cabinet reshuffle in which Peretz gets a beefed-up socioeconomic portfolio, Likud Party leader Benjamin Netanyahu joins the government and gets the Treasury portfolio, and Barak gets defense.

The problem with this scenario is that members of Netanyahu’s Likud Party, which currently heads the opposition, show little inclination to join the coalition, believing they can bring down the government and take over national leadership during this Knesset term.

All it would take, Likud leaders say, is 11 Knesset members to leave Kadima and return to the Likud. Pundits say some already are talking about doing just that.

Another option is for Olmert to scrap his current government and form a new coalition. In this scenario, Olmert could replace Labor’s 19 Knesset members with 17 from the hawkish Yisrael Beiteinu Party and the fervently Orthodox United Torah Judaism Party, keeping Kadima intact and both Labor and Likud out of government.

The downside for Olmert is that this would signal a strong move to the right, and would be internationally unpopular.

More and more pundits, however, are starting to talk about a scenario in which Kadima disappears altogether, with some of its members going over to Labor and others back to Likud, and with Likud and Labor re-emerging as the two main forces in Israeli politics.

If that happens, both Olmert and Peretz likely would be out of their jobs, and the so-called Big Bang of Israeli politics — sparked by Ariel Sharon’s defection from the Likud last year to form Kadima — will have proved to be a big bust.

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