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Money and Elected Leadership: Can Money Promote a Candidate's Election
to Political Leadership/Position in Israel?
Yaniv Shenhav, SWU "Neofit Rilski"
In my PhD research work titled ''The Effect of Elected Leaders' Demographic Data on their Success in Elections and on the Development of Future Leadership in Israel" I sought to explore the demographic criteria, which are highly frequent among the elected leaders in Israel, and their effect on the success in elections, and which may serve as predictive criteria to the feasibility of a future elected leadership. The following criteria were explored: Year of Birth; Gender; Country of Birth (for native Israelis, area of birth was also explored; southern, central or northern part of Israel); Marital status, Education; Area of Education; Military Service; Military Rank; Political Activity prior to election for term and occupation prior to election for term. Plus, acting elected officials were individually interviewed.
Accordingly, significant criteria were sampled and characterized among this study's participants. The statistical study's conclusions indicated several significant criteria, which affect the election of leaders; among other things, it was revealed that age 50 and older, Israeli-born, married, military service veterans, particularly in a combat unit and highly ranking, previous political activity and academic degrees in certain fields constitute significant criteria.
In this article, the researcher seeks to investigate whether there is a causal or statistical relationship between a candidate for election's existing personal capital and the likelihood of being elected to a list for the Knesset, whether through primary elections or to the Knesset in practice. From the research point of view, the most accurate instrument, which does not rely upon any speculations, to investigate the relationship at this context will be prior examination of capital declarations of all election candidates, and thereafter, by investigating their success in elections. A reliable data collection may have provided a clear, validated response. However, according to Israeli law, public officials' declaration of capital is confidential (Constitution Law, 1951). Thus, except for very few cases, the research could not obtain any data.
Despite that, in an attempt to delve more deeply into the matter, an interesting study case was examined, concerning the Knesset candidate, Davidi Hermelin, as published in an investigating journalist article, edited by Naomi Darom of the ''The Marker'' (Darom, 2012). At 29, Davidi decided to run for a realistic position on the primaries list (preliminary elections) on behalf of the Likud party in 2008. Supposedly, Hermelin possessed only some of the criteria indicated above and were found by the study to be indicative of decent chances of success for his election. He is a male, Israeli-born, a political activist; he has served in various positions within the Likud party since he was 13. In terms of personal backgrounds, he is eligible to be elected. However, Hermelin failed to be elected, and lost to the elected Knesset Member Zion Finian by only two percent of the votes. In an interview, he explained that he had achieved a decent outcome even without significant capital, most of which was his own, and some of which he had managed to raise. He argued that if he had had a greater sum of money, he would probably have been elected; he might have recruited more social activists, established more information platforms and places more signs. Thus, he may have diminished the 2% difference, which stood between him and election.
Election campaign financing involves very high costs. A local authority election campaign may cost up to 700,000 NIS (Zamir, 2018) in small towns, and up to millions of Shekels in the large cities (Shamir, Year unknown). The costs of a campaign do not involve only actual publicity-related expenses, campaign promotion, lobbyists and salary payments for activists and assistants, but also the fact that the candidate withdraws from employment, and, as a matter of fact, begins working full-time toward promoting himself, without being paid. This time period, which may last long months, poses a highly significant economic challenge to any candidate who has not accumulated any equity capital. This block is also relevant for activists who initially run for a position on the primaries list (for example, Labor party, Likud or Meretz), and then for the Knesset or any parties where the candidates' order is decided by the party's chairperson (for example; Kadima, Yesh Atid, Yisrael Beitenu), in which case investing in a campaign will occur while directly running for the Knesset.
In an inquiry, conducted by Haim Levinson (2012), which was published in Ha'aretz, a direct relationship was revealed between the candidate's fiscal investment to his final placement in a realistic position in the primaries elections. In other words, in almost all cases, candidates who had invested a greater amount of money were placed higher in the party's list. However, fiscal investment does not guarantee success. For instance, Zalman Shoval invested 440 thousand Shekels in the Likud's internal elections in 2008, but did not make it into the Knesset, while Ayub Kara, who invested approximately 27 thousands, entered the legislative body.
Nonetheless, perhaps fiscal investment's focus is not limited to billboards, conventions and study days. Various inquiries which have been conducted revealed the presence of the ''vote's contractors'', which is characteristic of the primaries elections in the larger parties. For example, Yedioth Aharonot newspaper placed mystery investigators (Lieberman, Ginossar, Pevzner-Bashan, 2012), supporting a candidate named ''Danny Somekh''. The inquiry portrays how a lawyer named Mohammed Darwish presented himself as a ''mediator'', offering 1500 votes for the fictional candidate for 150,000 NIS, who could buy himself into a realistic positioning on the list for the Knesset.
Similar testimonies were also given by less fictional candidates. Economist Shlomo Ma'oz (Karni, 2012) related that while he was running or the Knesset, he was offered a realistic position on the list several times, in return for a payment which will be handed to votes contractors, who would assist him in the process. Indeed, the courts in Israel are familiar with the phenomenon as well, since sometimes, those ''vote contractors'' appear before them, having been suspected to engage in such a crime, which involves paid mediation between a voter and a candidate (Kara, 2002).
Hence, it becomes apparent that a significant funding source may be of great assistance to the candidate who seeks to be elected for a position in the Knesset. Plus, even in the absence of a known manifest declaration of the candidates, there is a direct relationship between the need for a preceding financing in order to even put on the agenda the initial prospect of applying for a realistic candidateship in the elections. Indeed, in the local authorities and the Knesset, the rich sect in Israel is also represented. In the ranking of rich politicians created by ''Forbes Israel'' (Forbes, 2019), the former mayor of Jerusalem is placed at the top of the list, with capital estimated by 450 million NIS.
Knesset Member Katz, the Minister of Welfare, possessing capital estimated by 20 million NIS, Labor party chairperson Avi Gabay, with capital estimated by 25 million NIS, Minister of Construction Yoav Galant, with capital estimated by 10 million NIS, Prime Minister Netanyahu with capital estimated over 40 million NIS. The list is longer still, suggesting a significant number of Knesset Members and mayors who possess a very high fiscal capital.
Thus, it may probably be assumed that a significant number of acting Knesset Members possess substantial economic means. As aforementioned, however, politicians in Israel are required to submit their own special declaration of capital to the state comptroller and/or the Knesset Chairperson. As of 2016, the Israeli politician are only required to submit the declaration of capital, but are not compelled to reveal it to the wide public as well, contrarily to many other countries in the world, including the United States.
Prime Minister, Ministers, and Deputy Ministers: Declaration of Capital Submission Duty
Clause 10 and 17 of ministers' and deputy ministers' rules aiming at conflicting interest's prevention, require the Prime Minister, ministers and deputy ministers of the Israeli government to submit the declaration of capital in the following mode: (Government Publications Collection, 2003)
Knesset Members: Declaration of Capital Duty
As part of their declarations of capital, Knesset Members are required to specify any assets' capital, including funds, real estate, securities, ownership of companies, etc. However, capital declaration documents are deposited in the Knesset's safe, without being disclosed against Knesset Members' will, unless the court has demanded, or in case of a suspicion that a criminal offense has been committed, in which case, it is to be reported to the government's legal adviser.
Bill of Politicians' Declarations of Capital Disclosure
Through the years, there have been several attempts on the Knesset Members' part to alter the legal situation through proposing bills which will require the Knesset Members to disclose their declarations of capital to the public.(Caspi et al., Unknown year). However, those attempts have failed time after time at the Knesset assembly, thus, have never fully developed to a compelling legislation in practice. Those bills for the matter have still been discussed occasionally, in different version and emphases, but have not been included in the Book of Laws.
For example, Knesset Member Shelly Yechimovich initiated a bill and has brought it up for voting several times in the past few years, yet the bill has been shot down over and over again by the government and coalition. Knesset Member Yechimovich justified her bill by stating that the public has the right to know of Israeli politicians' status and network of business connection. From whom they have received gifts; how many apartments they own; who has financed their purchased, what their scope of assets is, as well as their source; are there conflicting interests between their public positions and their possessions and connections, etc. (Yechimovich, 2015).
Another bill at the same context, which failed, was initiated by five Knesset Members of Israel Beitenu party (Lev, 2016), aiming to cope with present conflicting interests which may be yielded by politicians' declarations of capital, as well as to promote transparency and proper disclosure, and to enhance public's trust in the State of Israel and its representatives, and, consequently, in their decisions. The bill was based upon the approach stating that politicians' declarations of capital disclosure is necessary in order to know whether or not to support them, and explore the true rationale of their interests, since the public possesses a basic right to know whether his representatives indeed represent the public's interests, or different ones.
This bill, however, was shot down on 6th January 2016 within the framework of a vote on the matter at the Knesset's general assembly, due to government's objection. Justice minister Ayelet Shaked, which expressed government's objection to the bill, indicated that although public transparency and conflicting interests are highly important, the proposal to disclose personal declarations of capital is not necessary in order to prevent conflicting interests (Avriel & Peretz, 2015).
Knesset Members Bezal'el Smutrich, Mordekhai Yogev, Itzik Shmuly and others successfully passed a bill concerning declaration of capital by senior officials serving the state and local authorities, which seeks to apply the same declaration of capital submission duty which applies to politicians, to judges and senior officials serving the state and local authorities, which they will require to submit to the party appointing them, prior to making a decision concerning them. This bill became a law in November 2016 (The Knesset, 2016), but even now, the declarations are not disclosed by law.
Hence, the approach supporting the privacy of public representatives in terms of their economic backgrounds is the dominant approach in Israel, which allows disclosure of those data according to the will of elected leaders, or imposes the same in unusual situations only. This reality is significantly different than the legal reality in other countries.
A special document ordered by the Knesset chairperson, Knesset Member Reuven Rivlin, presented a comparative review of parliament members' duty in terms of declaration of capital (Zadok, 2006). This review addressed the duty to report assets and other interests of parliament members in the United States, Belgium, Britain, Germany, Denmark, Finland, France, Canada, Switzerland and the European Union.
The findings indicated that in most reviewed countries, the parliament members are required to report of private interests, yet the scope of duty varies from one country to another. Thus, in some of the parliaments the reporting duty is broad, including capital, incomes and other occupations of parliament members, while in others, the reporting duty is limited to fiscal interests only, or to parliament members' additional positions and occupations. Among other things, those differences are influenced by rules related to conflicting interests applying to parliament members in each country, such as the prohibition to engage in other occupations simultaneously to serving as parliament members. Additionally, in some parliaments, the reporting duty is specified, while in others, the scope of reporting in relation to certain matters are subject to parliament member's judgment. In some parliaments, members are also required to report of spouses' and other relatives' assets. As for the time of reporting, in most countries, reporting is required upon the beginning of parliament service term. The countries differ by the other date of duty, namely, upon completing the term of service as a parliament member, annually, or only in case of a change in information to be reported.
Hence, as opposed to other places in the world, although Israel's public representatives are required to submit many, detailed declarations, but they are exempted from disclosing them to the public. Indeed, it may be inferred that even if there is a reasoning and even several testimonies and background stories confirming the association between a candidate's private capital and his likelihood to become elected to a party's list in the primary elections, or the Knesset, there are no reliable research instruments which may suggest a proven causal, statistical relationship between serving public representatives and their economic background.
Although a relationship between available capital and the likelihood of becoming elected is apparent, it may not be wholly and reliably explored in Israel. However, exploring the existing crony capitalism relations is of interest. In other words, exploring the points or situations where wealthy individuals are able to influence elected leaders' decision making processes while they serve in their position. Although it may not serve as a predictive criterion for the candidate's likelihood of being nominated for elected leadership, it may provide information as for the existing relationship between capital and government's conduct in Israeli democracy as well.
Following several political incidents in Israel, which are defined ''as capitalists' intervention in government order'', the state comptroller, retired judge Micah Lindenstrauss, appointed an investigation committee, in order to examine crony capitalism in Israel in 2012. The latter committee, led by Professor Abraham (Rami) Friedman (Friedman, 2012), wrote a detailed report. The committee assembled for long hours of discourse, research, interviews and inquiries. In the report they submitted, several theoretical approaches were portrayed, in terms of the existing relationships between the capitalists and their influence on a government within a capitalist economy's framework and in a democratic state.
The committee presented a review concerning the so-called conceptual circumstances under which capital representatives may meet government representatives, whom they may exploit in order to create improper influence leverages, whether those influence leverages are illegal (criminally or administratively), or improper according to ethics and morality tests. The ''points of encounters'' are as follows; legislation processes, government tenders, privatization processes and public assets sale, shared state and private sector enterprises, planning and construction committees, donations for election candidates, assistance to the private sector by means of state funds, payment of various taxes, appointment of officials for the public services, policy-making public committee appointments, regulation processes, and granting licenses and franchises. It is noteworthy that the committee emphasized the circumstances where donating wealthy individuals meet Knesset candidates, and the risks which may be yielded by this encounter. However, the conclusion drawn by the committee and its chairperson reflect a balanced view, which, on the one hand, emphasizes the importance of such an encounter and its contribution for economy's promotion and enhancement, and to the economic representation in the Knesset, and increasing transparency and reporting to public eye, on the other hand.
In order to maintain influence, which is essential, as the committee argues, yet in a balanced and democratic manner, the writers presented several recommendations related to promoting transparency and public's right to know, prevention of bias and prohibition of conflict interest situations, election system fairness and equity in implementing political influence on government, legislation enforcement and implementation, decisions and discipline moderating the influence of lobbyists on the government and legislation processes, imposing cooling off periods on public service employees who transfer to the private sector, enhancing equal opportunities, intensifying effective supervision of local government and planning and construction committees, regulating activity sectors within the states, enhancing the position of the so-called ''gatekeepers'' - internal comptrollers and legal advisers, as well as improving the prestige and standing of corruption-disclosing employees and protecting them.
This committee was established due to several governmental corruption affairs, which were disclosed in Israel. In the prestigious journal ''HaShilo'ach - The Philosophy and Politics Journal'', Ariel Finkelstein writes of the scope of discourse within Israeli society in relation to the extent of corruption affairs disclosed.(Finkelstein, 2018). He argues that the corruption within local government and municipalities focus upon three areas; appointments, contracts and planning and construction branch. Additionally, local government corruption focuses in areas where the entrepreneur faces a high degree of bureaucracy, since overall, corruption allows to promote projects and shorten processes. Hence, the greater extent to which facing the state involves more time, money and uncertainty, the greater the need for illegitimate payments will become, as will the businessman's incentive to pay his ''bureaucracy and regulation dues'', otherwise known as corruption, expands (Whiteman, 2014).
By definition, governmental corruption manifests itself criminal instruments and practices. However, wealthy individuals in Israeli democracy possess legal instruments through which they may influence the government through economic support of parties or election candidates. Although such support is highly limited and regulated, it still bears significance and influence. In a series of investigating journalist article edited by ''The Marker'' newspaper, the reporter questions the following: "What may be the common ideological ground associating Knesset Member Shelly Yehchimovich from the Zionist Camp, and Minister Zev Elkin of the Likkud?; Knesset chairperson Yuli Edelstein and Minister Ofir Akunis of the Likud, and Knesset Member Nachman Shai of the Zionist Camp? We are not sure if we are able to respond to that question, but there is at least one individual out there who has found that common ground shared by those five. His name is Bruce (Baruch) Arbit, the founder of A.B. Data company which engages in direct mailing and political consultation, whose chose to donate funds to each one of those Knesset Members in favor of the primary elections in their parties toward the 19th and 20th Knesset (Zrachia & Peles, 2017).
Apparently, there are some donators who choose to donate their money to candidates of various parties, at times ideologically conflicting, as suggested by a map presenting all individuals who passed on donations to Israeli politicians in the years 2011-2015. This map, which was developed by WEAVE company, specializing in strategic analysis and presentation of connection networks, is based upon data from the state comptroller database as of the years 2011-2015 (State Comptroller Website, The State of Israel).
The donation map (WEAVE, 2017) implies that throughout that five-year period, where two election campaigns were held, 3037 benefactors invested a total sum of 46 million NIS in Israeli politicians. The uniqueness of the double benefactor map stems from the fact that for the first time, it may be seen as a whole, presenting the benefactors, donation sums and the connections formed by the benefactors with different politicians, whose views are sometimes conflicting. Even if at present there are no clear data as for why those donations were made, or any reflection of the benefactors' interests, it may be assumed that a benefactor who offers his money to political representatives who hold different political ideologies will do so based upon an intention which is not related to ideological views. Donations' frequency and repetitiveness may also indicate, perhaps, some profitability to do so on the benefactors' part. And, perhaps, to avoid an unlimited influence of wealthy individuals on public representatives, party platform or political agendas. In Israel, as in other democratic systems, a method where the state finances the parties is common (Parties Financing Law, 1973). Direct party financing is a mechanism for passing funds from the states to the parties. This is the most common mechanism in the world. In a study investigating 177 democratic and non-democratic countries, it was revealed that in only one-third of them, the parties are not financed at all. Out of 34 OECD members, only one country does not offer financing -Switzerland (IDEA, 2015). In many countries, including Israel, there is also indirect financing, aside from direct financing, manifested, for instance, in allocation of television and radio broadcasts time for election campaigns, as well as rules regulating and limiting donations for parties and politicians, and their expenses (Shapiro, 2015). Plus, in Israel, there are rules regulating and limiting donations for parties and intra-party election candidates, as well as parties' and candidates' expenses. The state also finances candidate lists for local authorities' elections, according to Local Authorities Law (Elections Financing), 1993.
The sum of donations for primary election candidates is up to 11 thousands NIS per candidate, and a maximum donation of approximately 45,000 NIS from a single benefactor to a candidate running for leadership of a large party, such as Likud or Labor. Additionally, the law permits receiving candidates from individuals only, but prohibits receiving donations from companies and corporations. In each primary elections' campaign, a benefactor may donate to three candidates only (Zrachia & Peles, 2017). The law permits foreign citizens, who do not live in Israel and are not involved in the Knesset elections procedures, to donate to politicians.
Hence, the donation and the ability to influence, though limited, may facilitate the wealthy individuals in affecting some political character even before candidates have been elected to parliament, whether in the Knesset or a local council. Yet the wealthy individuals' significant influence is likely to manifest itself among serving elected representatives, and among political lobbyists, who are active in the Knesset and local council's corridors (Rom, 2010). In the inquiry report of ''The Marker'' newspaper, it was revealed that lobbyists are even capable of promoting legislation of a law within the Book of Laws for 150,000 NIS (Amit, 2018). The influence of commercial companies, wealthy individuals who also bear influence have been manifested in a variety of incidents in global and Israeli politics. One of the most widely discussed incidents involved a bribe affair, which was revealed in relation to real estate entrepreneurship in Jerusalem, putting former Prime Minister Ehud Olmert in active prison term (The Supreme Court, 28th September, 2016).
The ''Proposed Order'' document (Kermanitzer, Shapiro & Sidor, 2013), which was written by the Israeli, by the Knesset's order, was written due to public turmoil associated with the so-called ''political lobbyists'' in the Knesset, and upon the disclosure of their activity, as well as the influence of commercial companies and wealthy individuals through them, as revealed by an inquiry report on the television program ''Uvda'' (''Fact'') (Essenheim & Lechter, 2012) the public was introduced to their strong influence and even their enormous number, namely, an average of approximately two lobbyists per each Knesset Member.
The ''Proposed Order'' document revealed an intensive, widespread activity of the ''lobbyists'', who had received tremendous power in the Israeli parliament, and, in fact, promoted wealthy individuals' economic and political interests. The document was concluded with several immediate recommendations for regulating their activity through legislation, in the cooling off period from the transition from a public position to a commercial company representative, through a reportable and full transparency, and penalty in case the latter are not followed.
The authors' recommendations in the document are based upon the basic view, according to which lobbying is legitimate and inevitable. When it is implemented properly, it is even welcome in a democratic-liberal regime. Lobbying reflects principles of representation and involvement (Kurian, 1998; xxiv), and may provide decision-makers information which is essential for their work (OECD, 2010). Proper legislation process and law are stipulated by interests that are influenced by legislation and manifested and considered. Hence, a loyal, proper representation of various interests promotes a proper proceeding of, increasing the likelihood of proper legislation. However, lobbying bears potentially negative implications; it may give economically powerful individuals extreme influence; provide decision-makers with tendentious information and even wrong; damage transparency, since it is conducted within small forums' framework; undermine public's trust in decision making processes and democracy in general (OECD, 2010), and distract decision makers' work (Friedberg & Hazan, 2009)
To sum up, the researcher lacked the reliable instruments to investigate whether or not there is a significant statistical relationship between available capital and likelihood to be elected to power, both for local authority and Israeli Knesset. The main cause for the latter is the Declaration of Capital Law, which protects public representatives' confidentiality of information (Law of Knesset Members' Immunity, Duties, and Rights, 1951). However, it is apparent that being elected to a political position, requires a precedingly tremendous amount of money both for investment in the election campaign, whose costs may add up to millions of shekels (Levinson, 2012; Lieberman et al., 2012; Karni, 2012; Kara, 2002; Finkelstein, 2018; Rom, 2010; Amit, 2018), and because the candidate withdraws from paid employment, devoting himself to promoting his candidateship for position, with no fiscal reward. Additionally, Provence Israel conducted a review concerning the estimated capital of leading politicians in Israel, implying public representatives who are either wealthy, or extremely wealthy. Testimonies of various politicians and investigating journalist article of the Israeli press also proved that money may ''buy votes'' through ''votes contractors''. This practice is prohibited and considered a crime, but according to the inquiries, this practice still exists.
Naturally, some of the candidates and parties turn to external financing sources, which appear in the figures, which appear as donations made by private or commercial bodies. The latter turned out to be of interest, particularly due to the fact that a trend where those benefactors pass on funds to candidates possessing different political ideologies was identified (Zrachia et al., 2017; Benefactors Map, 2017). In Israel, many rules and limitations are common at the context of ''Party Financing Law'', which restrict the ability to receive donation on the one hand, yet offer governmental financing in line with pre-determined criteria, on the other hand.
The influence of funds does not only manifest itself in promoting one's ability to be elected to leadership positions with candidates' existing capital and external donation, it also fulfill a great role, and even greater, even after the candidate has been elected to the position. The influence of capital on government has reviewed in this article, and was also connected to ''governmental corruption'' (Friedman, 2012; Rom, 2010), presenting a rather problematic picture of points and situations where wealthy individuals have managed to influence decision making processes in politics. The most commonly known of those resulted in a bill of indictment against former prime minister Ehud Olmert and his imprisonment (Whiteman, 2014; Finkelstein, 2018; Rom, 2010; Supreme Court Verdict, 2016; Kara, 2002). Capital and government are also manifested through ''lobbyists'' in the Israeli parliament and local council corridors, who will act toward the promotion of wealthy individuals' interests (Essenheim et al., 2012; Freidman, 2012; Shapiro, 2015). For example, a television inquiry report on the television program ''Uvda'', revealed an active, intense network of lobbyists in the parliament corridors, which possessed great power and immensely influenced legislation and decision making processes (Essenheim et al., 2012). Another inquiry revealed a ''price proposal'' of 150,000 NIS for passing a bill in the Knesset (Amit, 2018).
Capital's influence is apparent in diverse aspects of politics worldwide, and in Israeli democracy. This article sought to review and present the points where capital bears influence both within processes of electing a candidate to a political leadership position and in promoting commercial agendas through laws, regulations and interest promotion. Nonetheless, the author also wishes to emphasize that the influence of capital on government may be positive and promote free economy. As long as it is follows clear ethical lines, it is of importance and bears a positive contribution.
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