Barak claims 'good faith' on comptroller critique

Defense minister accepts criticism that he contravened public norms by transferring stocks 3 days before cabinet appointment.

January 2, 2012 11:09
2 minute read.

Barak 311. (photo credit: Ariel Harmoni / Defense Ministry)


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Defense Minister Ehud Barak told the State Control Committee on Monday that he “accepted all the state comptroller’s findings” regarding transfer of companies to his family members immediately before his cabinet appointment in 2007.

The State Control Committee had convened a follow-up meeting on a report published last May by State Comptroller Micha Lindenstrauss, which examined the defense minister’s actions with regard to his international consulting company, Ehud Barak Ltd, which he founded in 2002.

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According to the report, Barak transferred funds from that company to his daughters three days before he joined Ehud Olmert’s cabinet as defense minister in June 2007, and also failed to notify the Special Exemptions Committee of all his holdings.

Lindenstrauss said that while Barak’s actions were not criminal they did raise a conflict of interest.

The state comptroller, who examined Barak’s transfer of the company according to guidelines established to prevent conflicts of interest between the business and public activities of ministers, deputy ministers and ministerial candidates, said Barak’s actions constituted a grave violation of public norms.

Barak’s transfer of stocks to his daughters did not distance him completely from interest in the companies, as required by the regulations, Lindenstrauss’s report said, noting that Barak’s companies made more than NIS 4.5 million between 2007 and 2009, after he joined the cabinet.

In Monday’s meeting, Barak said that all of the actions he had taken to transfer company shares to his daughters had been carried out in “good faith and with transparency.”

Barak also said that when he was appointed defense minister in June 2007, he had to “cease five years’ worth of business activity immediately.”

“Since the report was published, I have used every means at my disposal to implement its recommendations,” Barak said.

The defense minister told the committee that the transfer of the companies to his daughters was “not against the rules, but against the spirit of the rules as set out by the state comptroller,” and that he had handed over all company information, including balance sheets and financial reports, to Lindenstrauss’s office.

The defense minister added that after his appointment to the government, the companies ceased all business activity except for collecting funds, and that those revenues pertained to past business activity.

Barak also updated the committee regarding the status of the consulting companies, which he said are in liquidation and no longer active.

Committee chairman Ronnie Bar-On (Kadima) called on the government to finalize the matter by signing an agreement with Barak.

MK Arye Eldad (National Union), a former chairman of the Knesset Ethics Committee, called on the government to establish clear rules of conduct not only for ministers but also for those with ambitions to become ministers.

However, MK Einat Wilf (Independence) criticized the idea of extending rules to apply to potential ministerial candidates, which she said would be a “dramatic expansion” of the current situation.

“Every MK wants to be a minister,” Wilf argued.

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