Israel’s ruling Labor Party, already beset by waning popularity and political ill-fortune, faces new woes in the form of a burgeoning police investigation into alleged misuse of funds in the Histadrut labor federation.
The scandal erupted this week after reports that police officials are investigating Labor Party leaders who allegedly misappropriated Histadrut funds for their own political purposes.
Histadrut, which represents more than 50 percent of the Israeli work force, was a bastion of the Labor Party for decades until last year, when Labor renegade Haim Ramon took over the reins of Histadrut after defeating former leader Haim Haberfeld in union elections.
Ramon was Prime Minister Yitzhak Rabin’s original minister of health and was considered the brightest of Labor’s younger generation of leaders. But he walked out of the Labor Party over its refusal to endorse his national health reform proposals.
Ramon subsequently set up his own party, and in a blitzkrieg campaign backed by enthusiastic media support, he succeeded in wresting control of the Histadrut from Labor in elections last May.
Claims that the Labor Party illicitly used Histadrut resources were at the heart of Ramon’s attack on the Histadrut leadership during last year’s campaign.
According to news reports, Ramon found evidence of corruption and systematic wrongdoing after he took over the leadership of Histadrut.
The allegations now under investigation involve tow broad areas: – Histadrut funds were allegedly misspent by former Secretary-General Haberfeld’s campaign staff during his unsuccessful election effort to fend off Ramon’s challenge for the union leadership. – Histadrut monies were allegedly misused to help fund the 1992 election campaigns of several Labor candidates who held ranking positions in the Histadrut.
Political observers say the police investigation could snowball into an inquiry that would affect the highest echelons of the Labor Party.
Rabin has already been suffering a loss of public support over the stalled negotiations with the Palestinians and his inability to prevent repeated terror attacks against Israelis by those opposed to the peace process.
His reputation has also suffered as a result of economic issues. Rabin’s government canceled a controversial new tax on capital gains after vacillating for months over the issue. His government also appeared powerless in the face of a plunging stock market and a steady drop in the value of leading pension funds.
Mina Tsemach, a leading Israeli pollster, said this week that even without taking into consideration the allegations regarding the Histadrut scandal, Rabin would lose to Likud leader Benjamin Netanyahu if national elections were held now.
Some observers recall that Rabin’s first administration, from 1974-1977, sank in public support. It eventually power to Menachem Begin’s Likud under the weight of corruption scandals involving senior Labor figures.
Rabin himself declared Monday that he had full confidence in the legal system and would not interfere in the investigation.
He conceded, though, that he was “concerned by the very fact that there is a police investigation proceeding in the Histadrut.”
Both Rabin and Labor Party Secretary-General Nissim Zvilli sought to stress that the party itself was not under investigation or under suspicion of any wrongdoing.
The police inquiries were directed against individuals, Zvilli said, not against the party. The party’s financial matters were conducted scrupulously, he added.
Police Minister Moshe Shahal, another senior Labor Party official, vowed that there would be no cover-up nor any success in trying to influence the police during the investigation.
“Under my ministership,” Shahal said, “the police are politically colorblind.”
Police sources, for their part, disclosed that a high-ranking Histadrut official, Uzi Fassa, has signed an agreement to turn state’s evidence. He is being interrogated each day at a police facility, though he is not under arrest.
The leader of the Likud faction in the Histadrut, Ya’acov Shammai, said Monday that he first submitted material to the police substantiating the allegations of wrongdoing.
But Israel Television, citing Likud sources, claimed that Shammai himself had used Histadrut funds during his own political campaigns.
Knesset members Haberfeld and Masha Lubelsky, a deputy minister who was formerly head of Na’amat, the Histadrut’s women’s division, are among those who have already been questioned by police. Arthur Yisraelowitz, a former treasurer of the Histadrut, was also under investigation.
Transportation Minister Yisrael Kessar, who was secretary-general of the Histadrut until 1992, refused Monday to answer reporters’ questions on the ongoing investigations or on his own lengthy period of service at the top of the labor federation.
He would only say that in 30 years of working for Histadrut not even the slightest slur against him had ever been proven.
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