Cover story in issue 3, May 26, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Report click here. After police questioned Prime Minister Ehud Olmert in early May on a new affair which the rumor mills said could bring his government down, one of the first people whose opinion journalists sought was Shas leader Eli Yishai. With 12 seats in Olmert's coalition, the leader of the ultra-Orthodox Sephardi party was in a position to force the prime minister out of office. After a split in the Pensioners' party, the coalition could count on a maximum of only 64 supporters in the 120 member Knesset. Defection by Shas would leave Olmert with a vulnerable minority government and a political career almost certainly in tatters. Yishai, however, was in no hurry. First he wanted the police investigation - on which a two-week gag order was imposed - to run its course. Although Olmert has managed to stay at the helm despite several other corruption cases pending against him, these new suspicions and the urgent way in which the police went about pursuing them are purported to be graver than the earlier ones and thus potentially devastating to his government. It was not out of love for Olmert that Yishai kept him afloat, but his assessment that the party had more to lose than to gain if it brought him down. Shas has not always been in Olmert's corner. Indeed, over the past few months, it has virtually been conducting its own foreign policy. For example, ever since a mid-April meeting in Jerusalem with former U.S. president Jimmy Carter, Yishai has been trying to establish discreet channels of communication to Hamas, the fundamentalist Palestinian organization with which the Olmert government refuses to deal. The rest of the Israeli power establishment treated Carter like a leper, after the former president accused Israel of apartheid-like practices and because of his meetings with Hamas. Although Egypt has been trying to mediate a cease-fire between Israel and Hamas, Shas is pursuing a parallel initiative of its own with the Islamicists. Shas's aim is to help secure the release of Gilad Shalit, the Israeli soldier held prisoner in Gaza for nearly two years. In his meeting, Yishai announced that he was willing to talk to the Damascus-based Hamas leader Khaled Mashaal about freeing Shalit. "I am ready to spend a hundred hours of my own time to save Shalit one hour in captivity," he declared. Jerusalem lawyer David Glass, a senior Shas adviser who was present at the Carter meeting, has been entrusted with developing the Hamas contacts. "Things are happening with Hamas. There is an instruction from [Shas spiritual leader] Rabbi Ovadia Yosef to leave no stone unturned regarding Shalit. The main players are the Egyptians, but they blow hot and cold, and each time they let go, other international players with connections to Hamas come into the picture," Glass tells The Report. The readiness to make Hamas connections shows just how free Shas feels in Olmert's government to do as it pleases on key issues of war and peace. It is not only developing ties with Hamas, which the government opposes, it is openly obstructing the peace process with the moderate West Bank Palestinians under President Mahmud Abbas, whom the government is trying to promote. Like many a prime minister before him, Olmert finds himself held to ransom by the perennially successful Sephardi (primarily Jews from North Africa and their descendants) ultra-Orthodox party, which has often held the political balance of power, as it does today. Shas - it's the Hebrew acronym for Sephardi Torah Guardians - was founded a quarter of a century ago with the aims of fighting discrimination against Jews of Sephardi origin and improving their economic, educational and social lot, as well as fighting for a more religious Israel. But Shas has not steered clear of foreign policy and security issues. In a famous 1979 statement, Yosef ruled that giving up territory was preferable to the loss of lives, but since then the party has swung to the right, partly in deference to its mainly hard-line nationalistic constituency. In keeping with this mindset, Yishai says that all he is prepared to talk to Hamas about is pidyon shvuim, freeing of prisoners, because it is a mitzva or Jewish religious injunction. But clearly, if contacts with Hamas were to lead to a cease-fire, Shas would not object. On the contrary, for Shas a cease-fire is in many ways preferable to a peace deal: It would save Jewish lives without Israel having to make concessions on territory or, even more to the point, on Jerusalem. Indeed, Yishai admits that one of the main reasons Shas is still in the government is to torpedo the peace process launched by the United States at Annapolis last November. He maintains that partly because of Hamas's control in Gaza, Abbas will not be able to deliver on a peace package with Israel. Therefore, he says, Israel would do better to talk to Abbas only about economic projects, not peace. And, over the past few months, Yishai has persistently warned that the minute the issue of dividing Jerusalem - regarded as an essential component in any Israel-Palestinian settlement - is discussed in peace talks, Shas will quit the government. The party would be unwilling to compromise over the Holy City in the best of circumstances; all the more so in talks with a partner it is convinced cannot deliver. Since Annapolis, opposition leader Benjamin Netanyahu - head of the Likud which vies with Shas for the religious-nationalist Sephardi vote - has been trying to embarrass Shas into leaving the government over its differences with Olmert on the peace process. Yishai is mockingly dismissive. By staying on in the government, he argues, Shas is saving Jerusalem. "If we were to quit the coalition today, they would talk about Jerusalem tomorrow and hand it over the day after. Shas's presence in the government has turned Annapolis into nothing more than a photo-op," Yishai tells The Report. For months now, Shas has been punching above its weight. In addition to dictating the pace of negotiations with the Palestinians, it has bolstered its hawkish credentials by pushing the government into controversial construction projects in disputed parts of Jerusalem. Neither has it neglected its religious mission: The party tried to legislate a ban on the sale of hametz (leaven) in shops on Passover after a Jerusalem municipal court threw out existing law on the subject. Shas also forced Olmert to reestablish the defunct religious affairs ministry, a major source of funding for religious projects, with Shas's Knesset Member Yitzhak Cohen at its head. The string of party successes was interrupted in late April when Knesset Member Shlomo Benizri, a former cabinet minister, became the seventh Shas politician to be convicted of corruption. He was sentenced to 18 months in jail for accepting hundreds of thousands of shekels worth of services between 1996 and 2001 (when he was health minister, deputy health minister and minister of labor and welfare) from a contractor, acting on the assumption that Benizri would pass on inside information on lucrative government tenders. Before Benizri, the party's charismatic former leader Arye Deri was jailed in 1999 for taking bribes when director-general of the Interior Ministry and later as interior minister; Knesset Member Yair Levy was imprisoned for embezzling funds from the party's own El Hama'ayan education system; legislators Raphael Pinchasi, Shlomo Dayan and Ofer Hugi were convicted of fraud; and former Shas Knesset whip Yair Peretz was forced out of politics after obtaining a BA by copying other students' essays. The corruption has stained Shas's copybook, but doesn't seem to affect its electoral appeal. Yet, nearly a quarter of a century since it first entered the Knesset in 1984, Shas's contribution to society receives distinctly mixed reviews. Its secular critics argue that Shas milks the state to fund a system that encourages tens of thousands of young Sephardi Jews to enroll in Shas-run yeshivas to dodge the draft and stay out of the labor force. "Shas perpetuates a culture of poverty among the poor Mizrahim it claims to represent," charges Avraham Poraz, a former minister for the now defunct anti-clerical Shinui party. Moreover, he adds, Shas has no qualms about adopting hawkish positions on war and peace even though most of its adherents don't serve in the army. The Shas narrative is very different. Its activists retort that the party restored traditional religious values, gave Sephardi Jews a new sense of pride and offered the downtrodden poor a life of Torah rather than crime. Shas, they claim, provided an alternative to vacuous Western-style secular liberalism. They saw the corruption trials as evidence of the Ashkenazi establishment's anti-Sephardi prejudices, claiming that Ashkenazi politicians who were guilty of similar actions were left alone. When it comes to votes, the corruption cases have never had a negative impact. Indeed, in 1999, Shas used Arye Deri's conviction as an electoral rallying cry to garner more than 400,000 votes and a record 17 seats in the Knesset. Today, though, no one is thinking of using the Benizri case in remotely the same way. This is not only a question of a cooling of Ashkenazi-Sephardi tensions, says journalist Arye Dayan, author of the 1999 study, "The Surging Fountain: The Story of Shas." He maintains that the party has changed dramatically since the halcyon days of Deri and become far less revolutionary. According to Dayan, when Yosef, a brilliant scholar and former Sephardi chief rabbi, established Shas in 1984, all he had in mind was a small compact party that would promote religious education and services for the Mizrahi public, which he thought the political and rabbinical systems of the day were neglecting. But Deri, not at Yosef's initiative and perhaps even against his wishes, turned Shas into a party bent on social revolution in Israeli society as a whole. According to Dayan, Deri was out to replace the Likud as the party of all the Mizrahim in Israel, secular, ultra-Orthodox, and traditionalists. In 1999, Shas was well on the way to achieving his goal. "The 17 seats Shas got in 1999 showed that Shas was on the way to becoming the dominant party among the Mizrahim. Its goal was to radically change the character of the state, not simply to address shortcomings in religious services for the Sephardi ultra-Orthodox," Dayan tells The Report. But when Deri went to jail in 1999, Yosef seized the chance to revert to the original more compact, less ambitious Shas idea. "Over the past eight years, Shas has toned down its aspiration to influence the country as a whole and it has refocused on issues that haredi parties have always tended to prioritize," Dayan declares. "And under Yishai's measured leadership, Shas has concentrated on consolidating its power, rather than expanding it." Shas's electoral development bears out Dayan's thesis. In 1984, it won only four Knesset seats, with 63,605 votes; in Deri's heyday in 1999, it won seven times that number - 430,676 votes and 17 seats. But in the last two elections, under Yishai in 2003 and 2006, it has been down to 11 and 12 seats, with under 300,000 votes. Yet it is still one of the largest parties in the country and certainly the one with the most loyal constituency: 95 percent of Shas voters in 2003 voted for it again in 2006. So what explains the enduring appeal of an ultra-Orthodox party to masses of secular Sephardim at a time when ethnic tensions are waning and it is scaling down its wider social pretensions? The facts that mixed Sephardi-Ashkenazi marriages are rife, that Sephardim have risen to the highest levels in politics, scholarship and the economy and that today's young Sephardi voters are third generation Israelis have largely taken the sting out of the Ashkenazi- Sephardi divide. But, says political scientist Yoav Peled, a Tel Aviv University expert on Shas, it has always been the party of the poorer secular Sephardim and for them "tribal politics," having a political home they can identify with, remains important. Moreover, says Peled, over the past two decades, the poorer Sephardim have been hard-hit by globalization and the dismantling of the welfare state, which have accelerated a turn to religion and to Shas. Initially, there seemed to be significant dissonance between the innate hawkishness of the Shas electorate and the perceived moderation of its spiritual leadership. Both the poorer Sephardim and the younger ultra-Orthodox tended to take far right-wing positions on peace and war, while Yosef, after his seminal 1979 halakhic ruling that land can be returned if it means saving Jewish lives, was seen as relatively dovish. Indeed, in 1990, Yosef branded prime minister Yitzhak Shamir a "warmonger" and, in 1991, Deri crucially voted against retaliation for the Scud missiles fired by Iraq's Saddam Hussein during the first Gulf War. But since then, Shas has almost invariably taken a hard line, pulling out of the Rabin government over the Oslo Accords in 1993, quitting Ehud Barak's coalition in the run-up to the Camp David summit in 2000, and now threatening to desert Olmert if he takes the Annapolis process further. Dayan argues that the Shas leadership has been influenced over the past decade by a "new haredism [ultra-Orthodoxy]," pressing it towards ultra-hawkish positions and bringing it into line with its hawkish electorate. "For the new haredim, questions of land and peace are related to the country's Jewish character. The same way as you shouldn't sell hametz in a Jewish state, biblical Hebron should be an integral part of the state. They also see the Israel-Arab conflict in dichotomous terms of absolute good and absolute evil. All of which means they invariably adopt the most hawkish positions," he says. Shas has also taken a consistently hard line on state and religion. "No one can show me a single historical instance in which Shas presented a more conciliatory or pragmatic position than the Ashkenazi ultra-Orthodox Torah Judaism party," says Bar-Ilan University's Asher Cohen, co-author of "Israel and the Politics of Jewish Identity: the Secular-Religious Impasse." "When it comes to things like the Tal Law on army exemptions for yeshiva students, work hours on the Sabbath or the hametz law, Shas is never more moderate than the Ashkenazi haredim." Nevertheless, in Cohen's view, the great state and religion compromises brokered by the National Religious Party in the 1950s - on army service for yeshiva students, work on the Sabbath, public observance of Jewish festivals - are starting to unravel and Shas is doing nothing constructive to rebuild them. "For example, more people work on the Sabbath and many more places are open, because the haredi parties focus their power on sectoral gains and not on the big religion and state compromise agreements," he avers. Cohen, however, argues that market forces, not laws, will solve some of the religious-secular problems - for example, the question of the ultra-Orthodox in the labor force. To some extent, he says, this is already happening. Because, by cutting child allowances, the state is refusing to allow large ultra-Orthodox families to be a burden on its resources, many have begun acquiring modern job skills. "There is a major process of academization in the haredi camp. This is specially true of women, but also to a lesser degree of men, studying practical subjects and professions with job-market potential, like law, computers and business administration," he says. But Shas's critics, Ashkenazim and Sefardim, secular and religious alike, are not impressed. The secular Ashkenazi Poraz, for example, argues that the vast majority of ultra-Orthodox - over 80 percent - still don't work. "One of the big problems with Shas is that in their education system they don't teach mathematics or English, or anything that can help the students make a living. They produce generations of ignoramuses without minimal job skills, who have to live on state subsidies or manual labor," he contends. As a result, says Poraz, Israel has one of the lowest labor to population ratios in the Western world - 56 percent compared to an OECD average of well over 60 percent. This, he says, hurts the economy and makes Israel a significantly poorer place - a state of affairs that could lead to ever-increasing numbers of young secular people leaving the country. Poraz maintains that since Shinui's demise, no party in the Knesset has been doing anything to check ultra-Orthodox power. As a result, he charges, haredi schools are still not teaching the core curriculum, which includes math and English; the Tal Law enabling yeshiva students to dodge the draft has been extended and the Religious Affairs Ministry - which Poraz claims simply duplicates payments for religious services made by other ministries - has been reestablished. Therefore, he believes the time is ripe for the return to the Knesset of a one-issue anti-haredi party like Hetz, which he heads. It was formed after Shinui's inglorious implosion in the run-up the 2006 elections. But Hetz failed to cross the minimum threshold for a seat in the Knesset. Although he is not sure the public will give him a second chance after the Shinui debacle, Poraz is determined to run again to keep Shas in check. "There is clearly strong feeling against the haredi parties. The anger is there. The question is: Will it be translated into political power?" he wonders. If anything, criticism of Shas by Mizrahi intellectuals is even stronger. Moshe Karif, a former spokesman for The Mizrahi Democratic Rainbow (Hakeshet Hademocratit Hamizrahit), a movement dedicated to social justice in Israel, maintains that after a promising start Shas failed comprehensively to instigate any meaningful social reform. Worse, it helped perpetuate a system harmful to the poorer sectors of society it was supposed to be saving. "When Shas entered politics in 1984, it seemed to have a fresh voice and a new message. If the choice was between kids taking drugs or studying Gemara, I also welcomed what Shas was doing. But for 24 years Shas has been a senior partner in coalition governments, which have acted criminally towards the poorer sectors of society. I mean the privatization, the funneling of capital into the hands of a small number of powerful families, the collapse of the middle class, the collapse of the welfare state. Shas was a central partner to all these processes and it shares responsibility," he charges. According to Karif, it quickly became clear that the mission he and others hoped Shas would carry out for social justice, equality and equal opportunity was well beyond its powers. "Shas offered a home for the Mizrahi narrative and the Mizrahi electorate moved from the Likud to Shas. But the project for social change proved far too big for it. It soon became apparent that the new home did not look after all its tenants," Karif insists. In the wake of the Keshet's famous land victory in 2002, when it won a Supreme Court ruling preventing kibbutzim and moshavim from getting rich quickly by building on land given to them by the state for agriculture, Karif considered establishing a political party that could challenge Shas. But deep political differences among Keshet leaders, between post-Zionists and Zionist socialists, and the fact that the big Mizrahi electorate was far to the right of either group, put paid to the idea. Today Karif calls for a national debate to redefine Zionist goals with the aim of creating wide communal solidarity - Sefardim and Ashkenazim, secular and religious - based on shared values and a redefinition of Israel's role in the region. "We can't surrender our joint communal existence because of the region, but we won't survive here unless we ask the profound questions about what unites us. If it is nothing more than joint survival, it is probably not enough," he declares. For the same reasons that they haven't made a move until now. Karif or others from the Keshet movement are unlikely to mount a challenge to Shas before the next election due in 2010, if the government doesn't fall before then. Even before Prime Minister Olmert's latest troubles with the law, Yishai was predicting an early ballot by next spring. Current polls show Shas's strength stable at between 10 and 12 Knesset seats. But it could be hurt by a mooted change in the electoral law, which would make the leader of the largest party in the Knesset automatically prime minister. That would encourage hawkish secular Sefardim to vote for Netanyahu and the Likud rather than Shas. And there is also a possible challenge from Russian oligarch Arkady Gaydamak's populist Social Justice Party, which also appeals to poorer Sefardim. "Shas could lose a considerable amount of votes to Gaydamak. They are well aware of this. But I don't think they know what to do about it yet," says pollster Rafi Smith. The biggest problem for Shas, though, could be Yosef's age. The spiritual founder of Shas, the man who initiates or approves its every move, is 88 and has no apparent successor. "He is a giant for whom there can be no heir," says Cohen. "It is crystal clear that after he goes, there will be unrestrained infighting and the whole thing will disintegrate." Dayan has a different take. "Deri," he says, "is still young. And I don't think he has given up the idea of a return to politics." Three months before his meeting with Carter, Yishai met with U.S. President George Bush and pressed him to release convicted Israeli spy Jonathan Pollard. As in the case of Gilad Shalit, Yishai was acting on the sacred principle of pidyon shvuim and on the instructions of Yosef, the eminence gris behind both meetings. Nothing small or big happens in Shas without Yosef's imprimatur. And like Catholicism without the pope, it is difficult to see a future among presidents, prime ministers and kings for the ultra-Orthodox party without the great Torah sage. â€¢ Cover story in issue 3, May 26, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Report click here.