News Analysis: Barak Faces a Credibility Gap, Just when He Doesn’t Need It

Prime Minister Ehud Barak and his closest political allies have been scrambling to limit the damage to their government following a scathing report on the financing behind Barak’s election campaign last year.

The effort at damage control comes as Barak needs all the public support he can muster for his peace policies.

Barak’s battle to defend his credibility is expected to go on for many months, following a one-two punch squarely aimed at the campaign finance of his One Israel bloc.

First came a report issued last week by State Comptroller Eliezer Goldberg, claiming that Barak’s party and several others were guilty of illegal campaign funding practices.

The second blow came soon after, when Attorney General Elyakim Rubinstein decided to launch a criminal investigation of the parties’ funding practices.

In the view of Barak’s friends, as well as foes, his immediate reaction to the criminal probe was pretty lame.

According to the comptroller’s report, Barak’s One Israel bloc set up nonprofit organizations to funnel donations for his campaign against Likud incumbent Prime Minister Benjamin Netanyahu.

Among the alleged violations of these organizations, Goldberg said, was channeling money from abroad, in violation of campaign financing laws.

While the comptroller found allegations of widespread campaign financing violations in several parties, Goldberg singled out One Israel and its political leader, Barak, for the severest of the suspected violations.

The state comptroller fined One Israel some $3.2 million, the Center Party, $700,000, and the Likud Party $125,000 for their activities.

Barak went on prime-time television last week to declare that he knew nothing of the intricate network of charitable foundations — known in Hebrew as “amutot” — that were set up by his campaign aides and through which funds were funneled to pollsters, activists in the field and others involved in the day- to-day work of the election campaign.

Barak reiterated during the television appearance what he had told Goldberg during his brief interrogation about the alleged irregularities — that he was too busy campaigning to know what was going on in the campaign.

But public reaction has been one of broad skepticism, not to say outright disbelief.

As prime minister, and previously as army chief of staff, the intellectually gifted Barak has made a name for delving into details. Many here find it hard to believe that he kept aloof from the details of his own campaign.

Barak is also claiming that the alleged misdeeds were not criminal because the attorney general himself, in two formal letters he wrote in 1997, had ruled that funneling funds through amutot was not a chargeable offense in the context of the prime ministerial elections.

Rubinstein’s two letters, sent to Labor Party lawyers and signed by his top legal aide, pointed to gaps in existing statutes — namely that election finance legislation specifically applies to the Knesset elections, but has not been explicitly extended to cover the relatively new direct elections for prime minister.

For this reason, the attorney general explained at the time, he decided not to launch an investigation into alleged funding irregularities in Benjamin Netanyahu’s successful campaign for prime minister in 1996.

Barak argues that the gaps in the existing laws reflect a glaring weakness in the system — and says he will initiate urgent legislation to set things right.

But regarding the 1999 election, he maintains, his campaign finance activities, while condemned and fined by the comptroller as administrative excesses, are not chargeable as criminal offenses.

This second line of defense put up by Barak in the immediate aftermath of Goldberg’s report — and subsequently reiterated by his top ministers and aides — is supported by many independent jurists and other commentators.

Barak and his advisers are now trying to decide whether to risk taking their case to the High Court of Justice, where they would petition the justices to countermand Rubinstein’s order to open a criminal investigation.

This would be a rare step for the court to take, but not an unprecedented one.

If Barak loses in the high court, however, his embarrassment and political travails would be exacerbated.

Rubinstein let it be known this week that he is concerned not only with the alleged violations of the election funding law but also with alleged irregularities among the long list of amutot that Barak’s supporters used to channel funds.

Sources close to Rubinstein spoke of suspected breach of trust and fraudulent bookkeeping.

Two figures repeatedly mentioned in this connection are the Cabinet secretary, Yitzhak Herzog, and the campaign director, Tal Silberstein.

Briefing a Knesset committee Monday, Rubinstein said he would have been blatantly remiss in his duties had he failed to instruct the police to begin criminal inquiries.

“Anyone in my position would have done the same,” he said.

As a third defensive measure, the beleaguered Barak has very deliberately sought to step up the pace of diplomacy and peacemaking.

He flew Sunday to Cairo to meet with Egyptian President Hosni Mubarak and was expected to meet with Palestinian Authority President Yasser Arafat later in the week. At the same time, teams of Israeli and Palestinian negotiators embarked on what was trumpeted as a marathon round of talks aimed at hammering out an outline of a final peace agreement before a mid-February deadline.

But Barak’s attempts to invigorate the peace process, as a way of shifting attention from the campaign-funding scandal, seemed threatened by a dramatic downturn in southern Lebanon.

On Sunday, the second-in-command of the Israel-backed South Lebanon Army, Col. Akel Hashem, was assassinated when Hezbollah gunmen set off a bomb by remote control.

Filmed footage of the attack sent crowds in Beirut wild with rejoicing.

Barak later promised that the perpetrators would be punished, while Israeli army officers worked overtime to dissuade the SLA from an orgy of revenge shellings that could ignite the entire front.

But by Monday, the specter of a flare-up loomed large after Hezbollah gunmen killed three Israeli soldiers and wounded five others during an attack on an Israeli patrol in southern Lebanon.

Barak has warned Syria, the leading power broker in Lebanon, that an escalation of Hezbollah activities would set back the prospects for peace.

In the wake of the latest developments in southern Lebanon, Israel and Syria flung recriminations at each other via the media — hardly the backdrop for Barak’s hoped-for surge in peacemaking.

Worse yet, political analysts say Barak’s domestic troubles could seriously hamper his prospects of winning a majority in the referendum he has promised on any future peace deals with Syria and the Palestinians.

Under constant attack from the Likud opposition, and haunted by his own less- than-convincing initial defense of his actions in the campaign-funding scandal, Barak could find his much-vaunted credibility fraying — just when he needs every bit of it to persuade the public to support the concessions that peace will require.