Defense Ministry director-general Udi Shani violated defense export laws and
regulations when approving a number of defense deals in recent years, State
Comptroller Micha Lindenstrauss found in a report on defense exports released
Tuesday.
In his defense, Shani argued that the cases probed by the State
Comptroller’s Office were not significant and therefore he decided to rule on
them independently and without following the regulations or first consulting
with Defense Minister Ehud Barak.
Defense officials familiar with the
report said that it was “one of the most severe reports ever written about the
[Defense Ministry]” and that it was possible that Shani would need to step
down.
Lindenstrauss noted in the report that Defense Minister Ehud Barak
informed him that he would be willing to take “all steps necessary” to correct
the problems discovered during the investigation.
In his report,
Lindenstrauss revealed that Shani changed the ministry’s policy in 2010 in the
way it provides export licenses to companies seeking to sell their systems
overseas.
Until then, the ministry granted all companies licenses even if
they were going to compete against one another for the same tender. In 2010
though, Shani announced that he would refuse to grant licenses in such
cases.
According to Lindenstrauss, Shani should not have been allowed to
change the policy on his own and should have consulted with other government
agencies outside of the defense establishment. In addition, Lindenstrauss
criticized Shani for not incorporating the new policy into official Defense
Ministry procedures.
The state comptroller’s investigation into defense
exports was considered sensitive and involved all of the relevant Defense
Ministry agencies that approve sales to foreign customers. Israel is considered
a world leader in the defense market and traditionally has exports ranging
between $7-8 billion on an annual basis.
In three cases, the comptroller
found, Shani ignored export procedures and decided to grant export licenses to
companies to sell military platforms overseas despite opposition from the
Foreign Ministry.
According to export regulations, in the event that
there is a disagreement between the Foreign Ministry and Defense Ministry
regarding an export licenses, the issue will first go to a meeting between two
department heads from the two ministries. If they fail to agree, it will then be
brought before the directors-general of both offices. If they fail to agree, it
will be brought before a ministerial committee led by the prime
minister.
Lindenstrauss wrote in his report that he uncovered three cases
when Shani ignored procedures and decided to accept the Defense Ministry’s
recommendation to grant the license while ignoring the Foreign Ministry’s
opposition.
“The director-general and head of the [Defense Ministry]
export agency overstepped their authority and acted against the law,”
Lindenstrauss wrote.
In another case, the state comptroller discovered
that Shani and head of the Defense Ministry export agency decided to ignore the
personal opposition of Foreign Minister Avigdor Liberman to a specific deal and
granted an export license.
“The director-general of the [Defense
Ministry] cannot decide what the law will be on his own... There is no
justification for unilateral steps by him that are against the law,”
Lindenstrauss wrote in his report.