Former finance minister tells court that cash payments part of retirement package.
By DAN IZENBERGHirchson worried 224.88(photo credit: Ariel Jerozolimski)
Former finance minister Avraham Hirchson told the Tel Aviv District Court on Sunday that he did not break the law when he received cash payments of NIS 25,000 per month for more than three years from the National Workers Federation.
Hirchson submitted his formal response to the indictment filed against him by the Tel Aviv District Attorney's Office (Criminal Affairs) that included charges of stealing money, money laundering and false registration of corporate documents. In a second affair, he was accused of grand larceny in aggravated circumstances.
In a written reply to the court on the opening day of Hirchson's trial, his defense team headed by attorney Ya'acov Weinroth argued that the payments Hirchson received between 2000 and 2004 should be regarded either as a loan toward his salary for serving as the unpaid chairman of the National Workers Federation or as pension payments, depending on whether or not he would continue serving as an MK in the future.
The response marks the first time Hirchson has provided an explanation for how he received up to NIS 2.5 million from the National Workers Federation since he allegedly lied to police interrogators when he said the money was given to him by his son and sister-in-law.
According to the defense brief, Hirchson was serving as chairman of the union when he was elected to the Knesset on the Likud ticket in 1992. In 1996, he resigned from his union post after the Knesset passed a law banning MKs from holding other jobs.
Although he was a National Workers Federation employee for 30 years, he did not receive a pension when he left it.
According to Weinroth, "the comprehensive terms that he had coming to him on leaving the NWF were not formally determined. But it was clear to everyone that the matter would be finally settled in the future and that he had by far not received everything he had coming to him."
In 1998, the Knesset amended the law to allow MKs to serve as heads of labor federations as long as they did not receive a salary. Hirchson returned to his job.
Two years later, allegedly seeing that he was working as hard as ever for the NWF without receiving payment, he asked to be paid a pension. However, the union's accountant, Gideon Ben-Tzur, talked him out of it, according to Weinroth. Ben-Tzur allegedly advised Hirchson not to take his pension because if he decided to leave politics, or failed to be reelected to the Knesset, and wanted to return full-time to his job as chairman of the NWF, he would be better off maintaining the continuity of his work for the union.
Thus, according to Weinroth, a deal was worked out whereby the union would pay Hirchson NIS 25,000 each month during a so-called "interim period," until it became clear whether Hirchson would remain in politics or return to the NWF. If he left the union, the money would become his pension money. If he returned to the NWF, the money would become his salary for the period he served as chairman of the NWF without pay.
Hirchson allegedly asked to be paid this money in cash so that "the malicious tongues that accompany every politician, no matter who, would not claim that Hirchson was guilty of violating Knesset ethics because the payments might have been [mistakenly] regarded as a salary."
Weinroth added that at the very worst, should it emerge that Hirchson should not have taken payments that would have been regarded retroactively as a salary (if he left the Knesset), the act should be considered a violation of Knesset ethics and not a criminal violation according to the amendment that allowed him to serve as chairman of the NWF without pay.
According to Weinroth, it was Ben-Tzur's idea to pay Hirchson in cash. He also said that Ben-Tzur, who is no longer alive, told Hirchson that he would officially record all the payments.
Thus, between 2000 and 2003, he received the monthly payments in accordance with the agreement with Ben-Tzur. He also received bonuses for Rosh Hashana and Pessah, "like all other senior NWF officials."
Toward the end of 2003, according to Weinroth, federation treasurer Ovadia Cohen told Hirchson that he and other senior officials had stolen millions of shekels from the union.
Weinroth stressed that Hirchson had nothing to do with this affair and did not know about it until Cohen told him about it. Weinroth also claimed that the state recognized that the allegations against Hirchson had nothing to do with the theft of millions of shekels by senior union officials and was a separate issue altogether.
Toward the end of 2003, Ben-Tzur retired because of failing health.
Hirchson asked that the arrangement of the monthly payments continue.
According to Weinroth, he was "shocked to discover, in a phone conversation with [Yitzhak] Ruso, [the director-general of the NWF], that there was no systematic recording of the arrangement. This amazed Hirchson, who had thought that the arrangement had been properly recorded and asked him to talk to Ben-Tzur about it."
After Ruso spoke to Ben-Tzur, the two allegedly agreed to give Hirchson, who not been receiving his monthly payments since Ben-Tzur's retirement, a final sum of NIS 85,000. Furthermore, the union would calculate whether the money Hirchson had received over the four years was tantamount to the pension he had coming to him Upon being appointed minister of tourism in 2005, Hirchson left the NWF for good.
At the same time, wrote Weinroth, Hirchson and Ruso had a falling out, allegedly because Hirchson did not recommend that Ruso succeed him as union chairman. As a result, Ruso allegedly tried to frame him.
"Hirchson heard and understood from various sources that Ruso and his aides were doing everything possible to blame him for all of Cohen's deeds, as if to say that Hirchson was linked to Cohen and was in cahoots with him," wrote Weinroth.
In sum, according to Weinroth, the most that Hirchson was guilty of, if anything, was a violation of Knesset ethics by reaching an arrangement that included the possibility of retroactively receiving a salary from the union for the period of time when he served as both an MK and as chairman of the NWF, in violation of the law that allowed him to serve as chairman of the NWF only if he served without pay.
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