In 1977 the Government decided to adopt a set of Rules of Ethics for the Prevention of Conflicts of Interest of Ministers and Deputy Ministers (hereinafter - the Rules) The Rules, being based on recommendations included in the Report of the Public Committee headed by Judge (Ret.) Shlomo Asher, set forth provisions for the conduct of Ministers and Deputy Ministers in the discharge of their duties, and primarily the obligation of discharging their duties in fairness and without bias, the obligation to avoid situations of conflict of interests, even if only a semblance thereof, and the prohibition on engaging in an additional occupation. The Rules also established limitations regarding the management of financial affairs of the Ministers and their deputies and regarding their control of assets, including that of their families. In addition, the Rules prescribe that the Ministers and their deputies will be subject to the supervision of the State Comptroller with respect to the fulfillment of the aforementioned provisions. Over the years the rules have been amended and revised a number of times.
The Rules comprise five central chapters Chapter A: "General" ; Chapter B: "Special Provisions"; Chapter C; "Obligations Upon Assuming Office"; Chapter D: "Granting of Permits Committee": Chapter E: "Miscellaneous" Chapter A determines, inter alia, the following definitions"
Family member – "spouse, minor child, or any other relative who is supported by the Minister."
funds - "Various kinds of deposits, of a sum in excess of the determining sum in Israeli currency, in foreign currency, or in debentures issued pursuant to the Short Term Loan Law, 5744-1984, for any type of loan, apart from savings plans, study funds, and providence funds".
The determining sum - "NIS 200,000".
Securities - "Certificates issued in series by a corporation and which confer a right of membership, participation, or claim therein, whether by name or in the name of the bearer, including securities issued by the State, options and futures within the meaning of Joint Investments Trust Law, 5754-1994"
Business "including vocation, profession, trade, handicraft, agriculture or industry"
Relative - "(a) spouse, parent, grandparents, brother, sister, offspring, and offspring of spouse, spouse of any one of the following: offspring of a brother or sister, and brother or sister of a parent; (b) any other person in whom the Minister has an interest in his economic situation".
Control - "any right that a person has by himself or together with his relative to at least 10% of the offered shared capital or at least 10% of the voting power or the right to receive at least 10% of the profits or in the right to appoint a manager, of any group of persons".
It was further prescribed in the Rules that "a Minister will not engage in any business and will not be an office holder, member of the management or of any other institute of a group of persons engaged in activity for the purpose of making profits"; he shall not be a member of an institute that receives financing from the State, directly or indirectly, and shall not be a member of an institute that receives donations. Accordingly, the Minister is obligated to resign immediately upon the commencement of his service in any office, duty, or incumbency that are not consistent with that which is set forth in the Rules
Likewise, if the Minister has a personal interest in the execution of a project or in the adoption of a decision that may influence the granting of a benefit or right, he shall be prohibited from participating in any manner in the execution of the action or the adoption of the decision. The Minister will declare that he has a personal interest and notice of his declaration will be given to the State Comptroller
Where a fear of conflict of interests materializes, the Minister is obligated to turn to the Attorney General in order to receive instructions for its prevention.
The Rules also establish limitations concerning funds of the Minister, including a prohibition on receiving salary or benefits, apart from the wage that he receives from the State; the prohibition on receiving incomes from a business or from a group of persons; a prohibition on holding funds (as defined in the Rules) including securities, other than by way of a blind trust company; the duty to transfer all of the securities and debentures to the independent, public trust company within 60 days of the beginning of his office and to submit the Attorney General with a copy of the approved trust regime appended with the list of securities that was given to the trust company; the obligation to submit the trusteeship bill for the approval of the Attorney-General. The prohibition on purchasing State Assets, directly or indirectly; and the duty of the Minister who has rights in a business or shares that confer him control of a group of people, to divest himself of his rights and shares in one the three ways enumerated in the Rules.
The Rules prescribe that within 60 days of the beginning of his service, the Minister must report to the State Comptroller, in the form determined by the Comptroller concerning the capital, assets and undertakings that he and his family members had on the day of his entering office; the sources of his own income and of his family members and funds that they received during the year that preceded the appointment; assets that he transferred or leased to another in accordance with the Rules; securities that he transferred to a trust company; all of the roles and offices that he filled prior to his appointment. The Minister must submit a similar report for each year of his office and at the end of his office.
The State Comptroller examines the declarations, with the assistance of a limited staff, and in order to maintain their confidentiality they are kept in a safe, with all of the relevant appendices.
In 1980 the Rules were amended, following a recommendation of the Committee headed by Judge Kennet. The recommendations also included the appointment of a committee that would be authorized to grant a personal permit for the non-fulfillment of any of these Rules (hereinafter " the Committee for Granting Permits" or "the Committee").
THE NORMATIVE FRAMEWORK FOR THE ACTIVITY OF THE COMMITTEE FOR GRANTING OF PERMITS
The Committee for granting of Permits operates alongside the State Comptroller and is not subject to its decisions, but bound exclusively by the law. The activities of the Committee and its powers are anchored in Chapter D of the Rules.
1. APPOINTMENT OF THE COMMITTEE
Rule 18 of the Rules prescribes inter alia that the State Comptroller will appoint the members of the Committee for a period of two years. In November 1980, former Supreme Court Justice Dr. Yitzchak Kister was appointed as the first chairman of the Committee and its appointed members were Adv. Avshalom Levi and Mr. David Shoham. Today, the Committee is headed by Judge (Ret) Yehudit Tzur and the members of the Committee are Adv., Rachel Sukar and Adv. Renatto Yarak
2. POWERS OF THE COMMITTEE
Rule 19 of the Rules prescribes that the Committee is permitted to refuse to grant a permit for the non-fulfillment of any of the Rules, to grant a permit, or to grant it subject to conditions, if it appears justified under the circumstances and appropriate from a public perspective. It was further prescribed that the duration of the permit shall not extend beyond the duration of the incumbency of the Government. The Rules give the Committee the authority to revoke or to change the permit, according to circumstances. According to Rule 20, an application to the Committee to receive a permit may be made by a Minister and by a person who is a candidate for the position of Minister. Rule 21 prescribes that the Committee will hear the position of the State Comptroller before giving its decision on the matter, and that its decision will be final.
3. REMUNERATION OF COMMITTEE MEMBERS
Rule 23 prescribes that the members of the Committee will be reimbursed for their expenses as determined by the State Comptroller; and that the Committee members who do not receive a salary from the State will receive their fee for participation in the Committee's meetings.
ACTIVITY OF THE COMMITTEE
1. SUBJECTS THAT WERE FILED WITH THE COMMITTEE
The Committee has operated since 1980. Since it began to be active, and until the end of 2009, the Committee adopted over 100 decisions and during its incumbency has received a large variety of subjects to make decisions upon, including:
(a) The continued service of Ministers in bodies in which they served prior to entering office. These bodies include public bodies, such as orchestras, or sports associations and non-profit commemoration bodies
(b) Granting a permit to the Ministers to write articles and books and to give lectures during their period of service or to receive payments during their period of service for writings published before its commencement.
(c) Granting a permit to Ministers to travel overseas at the expense of the foreign entity (in other words, an entity that is not part of the State institutions) and to receive donations from a foreign entity in special circumstances.
(d) Management of Minister's funds- holding securities, giving one-time instruction to the trust company, continued holding of shares in private companies, etc.
2. APPLICATIONS OF MINISTERS
Applications of The Ministers and the Deputy Ministers are transferred via the office of the State Comptroller to the members of the Committee. It will be mentioned that all of the applications to the Committee were made by the Ministers and Deputy Ministers already serving, and not by those scheduled to serve in these roles; and in a number of cases the applications included matters regarding different subjects that were not related to them.
3. COMMITTEE DELIBERATIONS
The Committee convenes in order to deliberate over these applications. In the deliberations the Committee is presented with the applications for granting of permits on behalf of the Ministers and the Deputy Ministers the applications are presented by the Ministers or Deputy Ministers themselves, and occasionally they are presented by their representatives, including their spouses, lawyers who represent them and their accountants. The applications are presented in the presence, or not in the presence of the applicants, according to the circumstances.
4. DECISIONS OF THE COMMITTEE
According to Rule 21 (a) the Committee was obligated to hear the position of the State Comptroller before making its decision on the matter. The Committee's decision to give a permit, to give a temporary permit, a conditional permit and to refuse to give a permit – are given having consideration for the circumstances of the case and in accordance with the interpretation given to Rules by the Committee. The decisions were given to the Ministers or to the Deputy Ministers a number of days after they were adopted, and copies of them were kept in Ministers' files in the office of the State Comptroller.
The following is the division of the decisions that were adopted, according to areas:
|Management of Funds and Holding of Securities||11||3||0||4||7||18||43|
|Continued Activities of Bodies||30||0||0||0||0||3||33|
|Writing articles and books||15||1||0||1||0||0||17|
|Trips overseas at the expense of the foreign entity, and receiving from such an entity||8||1||0||0||0||4||13|
The following are examples of decisions give in over the past years in each one of the areas, according to chronological order. It is stressed that the Committee's decision to grant the applications of the Ministers and the Deputy Ministers were adopted after the Committee found that it was justified under the circumstances and approriate from a public perspective, and that granting the application would did not violate or creat a concern of the violation of the Rules.
Decisions Concerning the Management of Funds and Assets and the Holding of Securities
The Committee permitted the Minister to continue holding funds in excess of NIS 200,000 other than by way of a trust fund, for purposes of the renovation of his home. In the decision it was determined that the Minister would report to the State Comptroller once every three months regarding the expenses for the renovation of his home.
The Committee did not permit the Minister to continue holding Government bonds on a significant scale other than by way of a trust company. It will be noted that the aforementioned bonds were part of the Minister's financial assets (for he had transferred the rest of his financial assets to a trust company at an earlier stage).
The Committee permitted the Minister to receive fixed payments during his period of service, from the corporation that he owned before commencing his job, for services that he had given the corporation before commencing his job.
The Committee permitted the Minister to continue holding a deposit that also contained securities, of a sum that was not in excess of NIS 50,000. The permit was given since these were the only investments of the Minister in financial assets and by reason of his non-involvement in the management of the deposit.
The Committee permitted the Minister to continue being the owner of a non-active land holding company. It will be noted that the company also has other owners.
The Committee did not permit the Minister to give the trust company a one-time order subject to certain conditions to execute, defined transactions in the securities that he held.
The Committee permitted the Minister to be an authorized signatory in the bank accounts of his parents, in view of the special circumstances that were presented to it.
The Committee permitted the Minister to continue holding shares in a company which was entirely in his ownership. At the time of the granting of the permit the company was not active and was on the verge of liquidation. The permit was granted until a defined date or until the date of the liquidation of the company, whichever the earlier.
The Committee permitted the Minister to continue holding his rights in the shares of a private company, other than by way of a trust company. It bears mention that the rate of his holdings was les than one percent, and there was no connection between him and the company.
The Committee permitted the Minister to manage his financial investments overseas, which were held in a blind investment by way of a foreign management company.
The Committee permitted the Minister, who was a member of a Moshav, to continue receiving negligible amounts, which were related to his membership of the Moshav.
The Committee permitted the Minister to hold Government bonds, other than by way of a blind trust company, for as long as the sum did not exceed the determining sum (NIS 200,000). It will be mentioned that the Minister is not involved in the investment of funds, and that the bank in which his financial assets are held invests the funds in Government bonds on a regular basis.
The Committee did not permit the Minister to give a one-time instruction to the trust company to continue holding a particular security until a particular date. The purpose of the application was to minimize the economic damage that would be caused by the sale of the said security before a particular date.
The Minister permitted the wife of a Minister to be a partner in her mother's bank account, under certain conditions. In another case the Committee permitted the wife of a Minister to have a power of attorney in her mother's bank account.
The Committee did not permit the Minister to give a one-time in instruction to the trust company concerning the manner in which it should handle rights transferred to it and that pertained to non-public corporations.
The Committee permitted the Minister to continue being the trustee of an endowment that was intended to provide economic assistance to a family member who was unable to independently support himself. The permit was given subject to the condition that the trusteeship would not involve the receiving of remuneration and with no reimbursement of expenses.
The Committee allowed the Minister to continue receiving allowances from public bodies, the rate of which had been determined before he assumed his office.
Decisions Concerning Continued Activities in Bodies
The Committee granted the Minister's request to continue serving as a member in the management of a particular fund, by reason of the friendship between the family that established the fund and his own family. The fund deals with the promotion of Jewish, Zionist and national causes and does not raise funds from any bodies of any kind. The permit was conditional upon the non-receipt of payment or consideration for any kind for the Minister's role in the fund.
The Committee gave the Minister a permit for a period of one year to remain on a non-paid holiday from his previous work as a member of the academic staff in an institute for higher education in Israel. The Committee determined that during this year it would examine the issue of the conflict of interests between the Minister's service as a Minister and his membership of the academic staff of this institute, and that its decision on the matter would be accepted in accordance with the conclusions of this examination.
The Committee permitted the Minister to continue serving as a rabbi in the community of a particular suburb, provided that it be done for no consideration, and provided that the Minister was careful to discharge his duties as a Minister in full.
Decisions Concerning the Publication of Articles and Books
The Committee gave permission post facto for the Minister to publish a book half of which as written during Minister's period of office. The book contains articles and essays. Since the Minister wrote half of the book during his period of service, the Committee ruled that he was only entitled to receive half of the payments coming to him from the sale of the book and that the second half would be donated to an institution or body with whom he had no personal, institutional or political connections. The Minister was requested to submit the names of the bodies to which he intends to donate for the Committee's approval.
The Committee permitted the Minister to publish a book that he wrote during the period in which he was neither a Minister nor a Knesset member. The Committee permitted the Minister to receive a fee or other consideration upon the publication of the book, which deals with peace and economics.
The Committee permitted the Minister to continue receiving royalties of a few thousand Shekels for a book that he wrote when he was not serving as a Minister.
The Committee permitted the Minister to donate half the income received from the publication of a certain book to a particular fund.
Decisions Concerning the Funding of Trips Overseas and Receiving Contributions
The Committee did not permit the Minister to receive financing from a city in Europe for his trip to that city in order to participate in the anniversary of its establishment. Nor did the Committee permit the Minister to be accommodated in that city at the expense of the Jewish community there.
The Committee did not permit the Minister to receive financing from a private body for a trip overseas, in order to participate in a festive meal intended for raising donations to that body.
The Committee did not permit the Minister to receive financing from a private body for a trip overseas in order to participate in an evening of appreciation and salutation for this body.
The Committee permitted the Minister to give the Foreign Minister of a state with friendly relations with Israel a letter of appreciation and recommendation, specifying this Minister's support for an Israel-Palestinian project.
The Committee did not permit the Minister to handle an Israel-Jordan project. The Israeli part of this project was purchased by a person who contributed to the Minister in the framework of the primaries to the Knesset.
The Committee did not permit the Minister to deviate from part of the guidelines that were binding upon him in accordance with the arrangement for conflicts of interest that had been approved by the Attorney General. These guidelines imposed limitations upon the Minister by reason of the connection created at the primaries stage, due to the receiving of a contribution.
Publication of the Committee's Decisions
In the Committee's decision of 28.11.10 that was adopter inter alia in the wake of an administrative decision under the Freedom of Information Law, it was determined that as a rule its decisions hereon in would be published. On 24.1.11 the decision was given to all of the Ministers and Deputy Ministers.
Nonetheless, the Committee decided, having consideration for the nature of the matters concerned, and their sensitivity, that each case would be considered on its own merits and that the Committee would be able to make its determination based on its own discretion, and having consideration for the facts of the case, to publish the decisions in a partial manner, deleting the details or making changes, or without identifying particulars. Regarding this matter, the Committee will also have consideration for the position of the Minister or the Deputy Minister concerned, regarding the publication.