State Comptroller Micha Lindenstrauss published a report Monday in which he blasted one of Israel's most popular charities - the Association for the Welfare of Israel's Soldiers - for mismanaging the donations elicited from well-meaning supporters of the IDF in Israel and overseas.
The report, which examined the period from November 2007 to March 2008, found serious problems, particularly in the distribution of earmarked funds and in the use of outside contractors and consultants.
The Association for the Welfare of Israel's Soldiers (AWIS), the comptroller argued, paid money for no apparent reason to a private company for "aid and advice services in receiving support and raffles."
From 2000 onward, the report found, the organization had received money annually from Mifal Hapayis, the state lottery, in accordance with a signed agreement.
What was of greater concern to Lindenstrauss's office was the fact that in May of 2006, the organization made a second agreement with former Mifal Hapayis chairman Ya'acov Berdugo in which he would serve as a consultant to AWIS. Lindenstrauss's office found no documentation of any services actually provided by Berdugo, although he was paid for them.
"The connection of the organization with an outside private figure in exchange for a payment - the payment itself was acquired from another public body which is also obligated to maintain certain norms - should be checked thoroughly," wrote Lindenstrauss in his report.
In another questionable contracting case, Lindenstrauss found that the organization contracted with a private company to run a telephone donation center without putting the contract up for a regulated bidding process. In 2007, the center managed to raise approximately NIS 15 million, of which almost half - NIS 6.3m. - was paid back to the private company for services rendered.
The majority of donations to AWIS are earmarked by the donors for specific units or purposes, and Lindenstrauss emphasized that any other use of the funds was a violation of the organization's legal and ethical obligations. But, according to Lindenstraus, this is exactly what happened - earmarked donations were rerouted for other purposes without donors' knowledge.
Lindenstraus also found that the year after the plight of reservists became public following the Second Lebanon War, the organization had not budgeted any resources for improving reservists' welfare.
AWIS responded to the findings Monday, saying that "the report concerns the running of the organization until the end of 2007, before the organization's reins were taken up by chairman Avigdor Kahalani and current director-general Tzion Sapir.
"When presented with the report a number of months ago, the new management adopted the findings in their entirety and will take immediate steps to carry out the recommendations and correct all of the problems."
Regarding the money given to Bardugo, the organization said they were now trying to recover it and were reconsidering the use of the private contractor for the telephone donation center.
Also Monday, Lindenstrauss accused Prime Minister Ehud Olmert of pressuring the Treasury's accountant-general to hasten the approval of an irregular loan for Jerusalem's Engineering College.
The allegations, based on Olmert's personal acquaintance with the Engineering College president, refer to Olmert's term as finance minister.
According to Lindenstrauss' report, officials in the Finance Ministry at the time had exerted intense pressure to approve budgets by then-Treasury accountant-general Yaron Zelekha.
The college president, Jerusalem Municipality and Israel Lands Administration (ILA) were also criticized by Lindenstrauss. The case was not made public because of a lengthy undercover police investigation, and all cases against people involved have since been closed.
The report alleged that Olmert as finance minister directly exerted pressure to approve a loan of NIS 10m. for the college. Uzi Wexler, the president of the college, is an acquaintance of Olmert's. Olmert himself was chairman of the board of the Engineering College.
Commander (ret.) Meir Gilboa, head of the anti-corruption department in the State Comptroller's Office, said Olmert's pattern of behavior exemplified unlawful intervention in the decisions of the professional tier of the government.
"Olmert's part in the affair is small on the face of it, but his influence was great," Gilboa said.
"This is an example of intervening in the professional proceedings of a statutory body. And the intervention was made before all facts were brought before [Olmert]."