Comptroller: Olmert pushed Treasury to grant loan to J'lem college
Micha Lindenstrauss' new report suggests prime minister was unduly involved in allotting funds to Jerusalem College of Engineering during his tenure as finance minister; finds Land Administration officials at fault as well
State Comptroller Micha Lindenstrauss on Monday submitted his report about the operations of the Jerusalem College of Engineering and the Association for the Wellbeing of Israel's Soldiers (AWIS), for the 2006-2007 fiscal years, to the government.
Lindenstrauss' brief indicated improprieties in the loan and land allocation process pertaining to the Jerusalem College of Engineering and suggested Israel Land Administration (ILA) officials, as well as Prime Minister Ehud Olmert in his past capacity as finance minister, may have been unduly involved.
In 2004, the Ministerial Committee on Jerusalem Affairs decided to allocate the Jerusalem College of Engineering a permanent stretch of land, to replace its temporary, rented location, and ordered the Israel Land Administration to take the necessary steps.
The ILA spent several month looking into the colleges plans and credit applications, as submitted to the Council of Higher Education, and studied the terms of the NIS 5 million (about $1.23 million) loan given to the college by the Jerusalem Development Authority.
The report alleges that the committee called on then-Finance Minister Olmert to grant the college an exceptional credit line to the amount of NIS 10 million ($2.47 million). Yaron Zelekha, who served as the Finance Ministry's accountant-general, testified that when the application crossed his desk, he was pressured to approve it, both by the college and by the finance minister.
Lindenstrauss' determined that the interests expressed by Finance Ministry officials in the application, could have impaired Zelekha's office judgment on the matter.
The report also criticized the conduct of Uzi Wexler, head of the College of Engineering, citing his simultaneous duties as head of the Jerusalem Development Authority, posed a clear conflict of interest.
Adhering to proper administration
The report's account of the operations of the AWIS questioned the legality of its contract with Yaakov Bardugo, former head of the Israeli Lottery.
Lindenstrauss' alleges that the AWIS contracted Bardugo's consulting firm's services and the he was to be paid "a commission derived from any revenues earned by the association as a direct results of his services."
Bardugo was paid NIS 1.2 million (about $294,000) and according to the State Comptroller's Office, "the said contract should have been decided on via tender and according to proper administration guidelines."
The report also examined the AWIS's activities to raise funds for the military and better the social infrastructures within the Israeli Defense Forces. It found that "both the military and the AWIS need to reexamine the unique needs presented by the reserve forces and allot them the proper resources.
"Both best avoid a situation where AWIS funds are used to pay for operational needs or any other needs which do not pertain to welfare."
The offered the following: "The State Comptroller's report addresses the AWIS's operation up until the end of 2007 and prior to Chairman Avigdor Kahalani and Director Sapir Zion taking office.
"The new management embraced the recommendations noted in the comptroller's report wholeheartedly, taking the necessary steps to implements immediate changes meant to remedy the flaws found.
"The new management preformed far-reaching changes in the AWIS so to adhere to all proper administration guidelines. The association had cut its operational expenditures by 20% and has taken various steps to increase its efficiency. The AWIS is currently formulating a strategic five-year plan to that effect, as well."
