Sign up for Weekday J and get the latest on what's happening in the Jewish Bay Area.

JERUSALEM — Benjamin Netanyahu may be the first prime minister in Israeli history to face indictment, but many say the cancer at the heart of his premiership began with Aryeh Deri.

The facts being unearthed by the police investigation corroborate the original Israel Television report at least to the extent of confirming that Shas Party leader Deri, already on trial for bribery and fraud, was intimately and powerfully involved in what has come to be called the Bar-On Affair.

In the scandal, Netanyahu's political crony, lawyer Rony Bar-On, was named Israel's attorney general, allegedly in return for giving Deri favorable treatment, and so that Deri would support Netanyahu's then-shaky Hebron disengagement accord.

Was the deal sordid political business as usual, or will it produce criminal indictments against Netanyahu, Deri, Justice Minister Tsahi Hanegbi and Netanyahu aide Avigdor Lieberman?

While State Attorney Edna Arbel pondered that question, others searched for the roots of the controversy. One thing is clear: the embarrassment should not be confined to the current Likud-led government.

While Netanyahu and his aides may have been more blatant than their predecessors in giving Deri a key role in selecting the country's top legal official, those predecessors, from all parties, have countenanced Deri's undiminished political power for many years.

Deri was forced by the High Court of Justice to step down in 1993 as interior minister because of the charges of financial misconduct that had first been brought against him several years earlier.

But he continues as chairman of the ultra-religious Sephardi Shas party, which continues to thrive and grow.

Therefore, despite the charges against him, Deri remains at the very core of national policy-making.

How has this unsavory situation evolved over the seven years since criminal allegations were first levied against Deri?

And, perhaps more importantly, what are the chances of the situation changing now, in the wake of the Bar-On Affair?

Bar-On, a Likud activist, was allegedly appointed attorney general on the understanding that he would arrange a plea-bargain for Deri.

Deri faces further charges of misappropriating public funds for political purposes, for which he is due to stand trial when his current trial ends.

Bar-On won Cabinet approval Jan. 10 but stepped down two days later amid growing charges in political and legal spheres that he was a legal bantamweight underqualified for the job.

Two weeks later, the Cabinet unanimously approved District Judge Elyakim Rubinstein to serve as Israel's attorney general.

When Bar-On stepped down there was no sign of any political deal-making with Deri in his appointment. Those charges emerged days later in the Israel Television report, and along with them arose new questions about Deri.

Deri's power over his party has been virtually unfettered ever since Shas came into being, in the early 1980s.

Despite his youth and inexperience at the time — Deri was born in 1959 in Morocco and came to Israel with his family as a young boy, spending his formative years in ultra-religious yeshivas — Deri impressed the spiritual leaders of Shas, Rabbi Ovadia Yosef and Rabbi Eliezer Shach, with his outstanding political and practical abilities.

He gained a foothold in the Yosef household as a student at the Hevron Yeshiva in Jerusalem, when he was hired to coach one of the Sephardi chief rabbi's younger sons.

"I had one ear on my pupil's learning and the other on the rabbi's activities in the next room," Deri later recalled. "All the problems of Sephardi Jewry, in Israel and abroad, passed through that room."

Shas evolved out of a strong sense of discrimination among young ultra-religious, Sephardi yeshiva scholars.

Shach gave it his support as a way of expressing his own deep resentment of the Chassidic-dominated leadership of the ultra-religious Agudat Yisrael movement.

Yosef was especially resentful at that time over legislation that required him and his Ashkenazi colleague to relinquish the Chief Rabbinate after a single 10-year term.

Later, Shach and Yosef split, and Shach formed his own separate ultra-religious Ashkenazi party, Degel Hatorah.

Shas' rise from nothing to four Knesset seats in the 1984 election took the Israeli political community by storm. At each subsequent election, Shas has surged farther ahead.

Today, with 10 seats in the 120-seat Knesset, it is the third largest political party. Without its votes, the Netanyahu government could not likely remain in power.

Over the years, Deri rose through the ranks of the Interior Ministry, with his influence extending far beyond the confines of the ministry.

Insiders knew even back in the mid-1980s that this young man was the power behind Yosef's throne in Shas.

Prime Ministers Yitzhak Shamir, Shimon Peres and Yitzhak Rabin knew that they had to deal with Deri in order to get things done, and done fast and efficiently.

Knesset arithmetic explains the Likud's tenacious cultivation of the Shas rabbis and politicians. And it helps explain why both Likud and Labor politicians have, for so many years, turned a blind eye to the legal, ethical and political problems posed by Deri's continued high-profile leadership.

For months, Deri would spend his mornings at the Jerusalem District Court and his afternoons at his political office or in the Knesset. Now he has been excused by the court from attending all its sessions.

So far, the Bar-On Affair has failed to elicit any signs of embarrassment within Shas itself. To the contrary, the party gave Deri and Yosef a rousing show of support at a recent Tel Aviv gathering.

But one meeting of thousands of loyalists may not reflect the feelings of tens of thousands of less committed Shas voters.

In the leadership echelon itself, moreover, there may be faint cracks beginning to appear in Shas' facade of solidarity.

The Shas Knesset faction, for instance, delicately balked at a proposal, presumably initiated by Deri though articulated by one of his aides, that they all join in a high-profile protest against the ongoing police inquiry into the Bar-On Affair.

Privately, key Shas figures bemoan the close connection between Deri and Yosef. They admit that in the long term it could prove disastrous — especially if Deri is convicted of bribery.

But they admit, too, that this unique bond between the elderly rabbi and the still-young "super-fixer" seems unassailable.

Yosef, they say, is simply not prepared to hear bad things about Deri spoken in his presence. In public appearances, the rabbi is unstinting in his praise for Deri's successes in building up Shas' network of grassroots educational and welfare programs.

Deri takes the credit, for himself and Shas, for the widespread "back to roots" sentiment sweeping among Israel's Sephardim. The number of Shas-inspired hozrim b'tshuvah — that is, people who profess to have taken on an Orthodox lifestyle — is itself impressive.

But the phenomenon is broader than that: Many Sephardi Israelis who are not themselves very observant concede that their lives have been touched by Shas activists in their communities. For Yosef, this augurs a return to Orthodox observance.

Meanwhile, his instructions to Shas cadres are to encourage allegiance even among the secular, and above all to keep opening kindergartens, schools and community centers.

In the words of Mordechai Bar-On (no relation to the scandal's namesake), a former Meretz Knesset member and a keen observer of sociopolitical processes, Shas is "the most interesting and most authentic phenomenon to have evolved in Israel in recent decades."

In the day-to-day expansion of Shas' activities, Yosef sees Deri's energetic efficiency as vital, and he is loath to contemplate carrying on without his acolyte.

Nevertheless, those who know the rabbi know, too, that for all his single-mindedness and his simple turns of phrase, Yosef is no Don Quixote.

Slowly, but inexorably, the realization is growing, even in the heart of the rabbi, that the day may be approaching when Shas will have to crown a new leader — or risk losing the sympathy of ordinary Sephardi Israelis.