Israel Railways cited for 'grave misconduct'

'Israel Railways approved training for senior employees at higher salaries than the standards accepted for government workers.'

train 1 88 224 (photo credit: Ariel Jerozolimski)
train 1 88 224
(photo credit: Ariel Jerozolimski)
Government companies, including Israel Railways and Haifa Port, exhibited grave misconduct and conflict of interest in the hiring of senior employees, including improper salary benefits, in recent years, the State Comptroller's Office said in a report Tuesday. "With the transformation of Israel Railways into a government company three years ago, the company could have been expected to be run more efficiently and comply with the Government Companies Authority regulations. But this was not the case," State Comptroller Micha Lindenstrauss said in the report. According to the annual report, which investigated the period between May 2006 and May 2007, Israel Railways has still not complied with the approved directives governing the hiring of workers, and has continued to hire workers for senior positions according to improper standards. After failing to find the right candidate for the position of chief inspector at Israel Railways following four tenders, the criteria for the position were lowered, the report said. "There is room for concern that the skills and criteria required for this position were remodeled to fit the person who was then appointed to the position," Lindenstrauss said in the report. "The chosen candidate did not have the necessary expertise and skills regarding operations of the Israel Railways, and only after being appointed to the position, he was sent for proper training." Israel Railways approved training for senior employees at higher salaries than the standards accepted for government workers, according to the report. In one instance, the legal advisor of the company was given training benefits at a value of NIS 84,600, which is six times higher than the standard in the regulations. From 1999 to 2006, the board of directors of Israel Railways approved irregular salary benefits to three of its members at thousands of shekels a year without getting approval from the Finance Ministry's supervisor of wages. Haifa Port did not fare much better in the report. Lindenstrauss harshly criticized its hiring process for senior employees, in particular the appointment of its director. Lindenstrauss reported that former chairman of the board David Hermesh had given preferential treatment to a certain manpower company with which he had previous connections, without consulting other companies, even though it was more expensive. Lindenstrauss found additional cases of senior employees at Haifa Port who were appointed in an improper manner, suggesting preferential treatment, including cases of a friend bringing a friend. Among the appointments, he reported, were an inexperienced deputy finance director and a deputy marketing officer who was not on the candidate list.