Lapid testifies to Turkel, defends Frenkel on comptroller report

Finance minister says significant paycut Frenkel taking to be BoI governor shows he's committed to the public.

July 3, 2013 15:37
2 minute read.
Yair Lapid at cabinet meeting, 20 May 2013.

Yair Lapid at Cabinet Meeting, looking official 370. (photo credit: Marc Israel Sellem/The Jerusalem Post)

Finance Minister Yair Lapid on Wednesday testified before the Turkel Commission, headed by Judge Jacob Turkel and tasked with assessing Jacob Frenkel for the post of Bank of Israel governor.

Though the hearings are not public, Lapid defended Frenkel over a salary scandal in an interview with Israel Radio earlier in the day. Frenkel, who had served as BOI Governor in the 1990s, was forced to return NIS 238,000 to the state following his term when the State Comptroller accused him of receiving “special financial arrangements" in his compensation package.

“If Frenkel is only interested in money why would he leave a position that pays him 20 to 30 times the salary to be Bank of Israel Governor?” Lapid said in a fiery interview with Israel Radio’s Keren Neubach. Frenkel was serving as JPMorgan International’s chairman when he accepted the nomination for Governor. The significant pay cut he was taking, Lapid said, showed he was committed to the public.

“The state comptroller said to return [the money], and it was returned,” Lapid said over Neubach’s protestation that it was the attitude toward public fund, not Frenkel’s bottom line, that was disconcerting. “He’s a straight man, he’s a decent public worker, he’s an Israel prize winner, he’s a man who came to serve the public,” the finance minister said.

President Shimon Peres and the cabinet must approve Frenkel based on the commission's recommendations.

Lapid also promised he would lower taxes as soon as the budget allowed.

“The moment the economy stabilizes, the moment that this deficit, this budget hole closes, and we return to growth, say 4%, I don’t see why not,” Lapid said. “It’s not my goal in life to impose taxes. We have to do it now because we have to close a budget hole.”

In order to secure economic growth in the future, he said, integrating the ultra-Orthodox into the workforce was a crucial measure.

“It’s a public that very much wants to work,” he said, praising the ultra-Orthodox as fit for the workforce because “they’re people that have learned to think their whole lives.” Despite their political leaders’ protectionism, he said, the haredi public “want to earn more, they want to get out of the cycle of poverty and we’ll help them.”

Asked why he did not aim more tax increases at companies and the wealthy, Lapid responded that socialism was a failed policy, though he confessed that unbridled capitalism was not the right course either. “The solution isn’t take money we don’t have and distribute it,” he said.

“The people I demonstrated with last year are people who voted for Yesh Atid, and Yesh Atid voters are very pleased with the fact that someone demonstrating responsibility, who is working for the middle class, who is protecting their jobs. They know to open a newspaper and see that in Europe there are unemployment levels that there are not here.”

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