Attorney General Menachem (Meni) Mazuz and Civil Service commissioner Shmuel Hollander may suspend Prime Minister's Bureau Manager Shula Zaken and senior Israel Tax Authority officials, once the option of court-imposed restrictions on them has been pursued in full. Sources at the Ministry of Justice said, “Pursuant to the progress of the investigation, the use of administrative procedures will be considered, including suspension.”
Minister of Finance Abraham Hirchson will probably not make any decision on a replacement for director Jackie Matza until Sunday. Hirchson will visit the Tax Authority offices tomorrow, in a show of solidarity and support for the staff. Speaking during an emergency consultation today with his director general Joseph Bachar, Ministry of Finance Legal Counsel Adv. Yemima Mazouz, and Hollander, Hirchson said, “This is a difficult period during which all concerned should demonstrate responsibility and make balanced decisions.”
“Globes” has learned that police are investigating, among other things, suspicions that senior tax authority officials used members of the Likud Central Committee as kingpins with the necessary political clout to get their associates included in internal authority tenders. Yesterday, the Tel Aviv Magistrates Court remanded Tax Authority director Jackie Matza in custody for six days. Matza, who is suspected of accepting and offering bribes, fraud and breach of trust, and aiding and abetting an unlawful public appointment, was arrested along with 21 other suspects, among them senior former and current Tax Authority officials and business executives.
14 of the suspects appeared in the Tel Aviv Magistrates Court last night for a remand hearing. Detectives from Israel Police National Fraud Unit told the court that Matza had allowed businessmen Kobi Ben-Gur and Yoram Karshi to take over the authority’s appointments process. Asked by Matza’s counsel Adv. Navot Tel Zur what sort of bribes and benefits they were referring to, they replied, “Benefits are not measured in terms of money alone, so any appointment, as innocent as it may be in itself, if obtained through inappropriate means can amount to a bribe.”
The detectives added that their inquiries had produced material which established that “instances existed where discretion or authority had been abrogated.” Matza had in effect taken a bribe when he knew that his appointment as authority director was aimed to serve the interests of certain business executives, in the expectation that he would help them once in office.
Remand magistrate Judge Mordecai Peled held that the “inquiry had produced serious and grave findings with regard to the conduct of the Tax Authority, which give rise to reasonable suspicions against Matza, in that he acted under the influence of persons outside the authority - Karshi and Ben-Gur - while violating the trust placed in him as authority director and abrogating his own discretionary powers.”
Refuting police claims, Matza’s lawyer Adv. Navot Zur told the court that the incidents in question amounted to nothing more than lobbying, and that in all matters relating to appointments, Matza had made up his own mind and acted lawfully after consulting with others. However Judge Peled rejected his claim stating that Matza’s actions “amounted to conduct that constituted disregard for integrity on the part of the authority director, who had been entrusted with extensive authority and considerable powers. It would appear that the suspect abused the trust placed in him, and became, to large extent, an emissary on behalf of others outside the authority.”
Shula Zaken is suspected of bribery, fraud, breach of trust and obstructing justice. According to police, during 2006, in her capacity as head of Prime Minister Ehud Olmert’s head of bureau both at the Prime Minister’s Office and the Ministry of Finance, she intervened in an improper manner together with other authorities in appointments to key positions within the Tax Authority and other government ministries. It is believed that she and others also attempted to obstruct an inquiry within the authority in regard to one of her associates and in return received benefits for herself and her family.
Former Tax Authority director Eitan Rub is suspected of facilitating bribery, aiding and abetting bribery and fraud. Police detectives claimed that “Koby Ben-Gur had begun to exert his influence while Rub was still director and continued this after he was succeeded by Matza. Rub was well aware of what Ben-Gur was up to in the authority and even aided him on occasions. He also gave his successor Matza to understand that Ben Gur had certain requests that he would be asked to carry out.”
The detectives claimed that Rub abused his position and influence, as well as the fact that certain employees owed their jobs to him, to secure their intervention in appointments in a manner to suit Ben-Gur and others. In addition, he also tried to reduce assessments for taxpayers. Judge Peled ruled that “extensive material had been introduced as to the form and manner of Rub’s conduct, all of which points to the existence of a reasonable suspicion.” Most of the allegations related to the period when Rub was still Tax Authority director.
Published by Globes [online], Israel business news - www.globes.co.il - on January 3, 2007
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