Barak faces credibility gap over finances

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JERUSALEM — Not long after last spring's elections, an Israeli publication that critiques the media featured an illustration of Prime Minister Ehud Barak as a Victorian candy-box cherub.

His smugly grinning face was mounted on an angel's body, replete with fluffy white wings and a halo.

The message was that the Israeli press has been exceedingly lenient toward Barak and that it bends over backward to let him get away with what his immediate predecessor, Benjamin Netanyahu, would have been crucified for.

What Barak may be asking himself now is whether the media will continue to treat him with kid gloves.

Netanyahu was never allowed to live down his own election law violations in 1996. Barak's party, Labor/One Israel, is now accused of similar violations — but on a much larger scale.

Attorney-General Elyakim Rubinstein ordered a criminal investigation into Labor/One Israel after a state comptroller's report released Jan. 27 accused the party of violating campaign financing laws.

State Comptroller Eliezer Goldberg's report said Labor/One Israel set up nonprofit foundations to funnel donations for his campaign against Likud incumbent Netanyahu.

Among those foundations' alleged violations, Goldberg said, was channeling money from abroad, which is illegal.

Netanyahu used only one nonprofit foundation that labored for his election in 1996 — Joseph Gutnik's "Netanyahu Is Good for the Jews" outfit.

In Barak's case, dozens of foundations were involved — many of which allegedly were set up to funnel illicit funds to his campaign coffers and others that already existed were taken over so they could be used to launder forbidden funds.

In many cases, the foundations operated under bogus covers, many of them ostensibly charitable in nature. Moreover, the same Barak backers appeared on the boards of the many foundations, including Barak's brother-in-law, his cabinet secretary and his chief publicist.

They are accused of having sought to deliberately disguise the true beneficiary of the inordinate largesse solicited from munificent donors at home and abroad. That would be more than a violation of the campaign spending regulations.

The state comptroller explicitly denied Barak and his party the cop-out that Netanyahu had done it first. The scale of what the Likud did in 1996 — as well as in 1999 — simply did not compare with what the comptroller discovered about the Barak campaign.

Last week, the comptroller fined Likud $125,000 and the Center Party $700,000 for violations in the 1999 campaign. But that was nothing compared to the $3.2 million fine levied against Labor/One Israel.

Moreover, the comptroller quashed Labor arguments about a loophole in the law. He plainly accepted no excuse and did not let Barak off the hook. He ruled that the law was broken and that Barak had no business ignoring the glaring red lights that flashed in his direction.

But worst of all, from Barak's vantage point, is that fact that he was not excluded from the criminal investigation.

Suspicion of committing felonies is not something Barak can blithely brush aside even if the investigation does not hone in on him personally but on his party and immediate associates.

Barak went on prime-time television late last week to declare he knew nothing of the intricate network of charitable foundations — known in Hebrew as "amutot" — that were set up by his campaign aides and through which funds were funneled to pollsters, activists in the field and others involved in the day-to-day work of the election campaign.

Barak reiterated during the television appearance what he had told Goldberg during his brief interrogation about the alleged irregularities — that he was too busy campaigning to know what was going on in the campaign.

But public reaction has been one of broad skepticism, not to say outright disbelief.

As prime minister, and previously as army chief of staff, the intellectually gifted Barak has made a name for himself by delving into details. Many here find it hard to believe that he kept aloof from the details of his own campaign.

Coping with what the comptroller dished out to him will now take up much of Barak's time.

In an effort to seem statesmanlike in the midst of bad press, Barak flew to Cairo on Sunday to meet with Egyptian President Hosni Mubarak. He also was expected to meet yesterday with Palestinian Authority leader Yasser Arafat.

Still, Barak already is admitting that the criminal investigation will hamper his chances of convincing Israelis to approve an eventual referendum on returning the Golan Heights to Syria.

If, as Barak insists, the crucial referendum is around the corner, he will enter the fray hobbled. He will be unable to put up the same sort of a fight as he might have before the report's publication.

Winning a referendum could cost as much as winning an election. Labor is already in the red to the tune of at least $31 million. Last week's hefty fine will not improve the situation. In those straits, it will be difficult to legally raise the funds needed to push for the referendum.

In addition, some of Barak's leading aides and sidekicks may be in great legal jeopardy. They will not be able to plead ignorance like their boss.

Despite Barak's claims he was too busy to see or hear anything, he has been tainted. His credibility cannot escape unscathed but it will now be up to the media to decide whether to help him minimize the damage — as it has effectively and willingly done in his previous scrapes with public opinion.

Because, as the comptroller determined, Barak must face the judgment of the electorate, much of his struggle will have to be waged on the battlefield of public opinion. To a large extent his political fate now hangs on the desire — or lack thereof — of the trendsetters and opinion-makers to sweep the matter swiftly under the rug.

It is not inconceivable Barak will succeed in the ostensibly impossible feat and get away with most everything yet again. If he hasn't lost his bountiful good luck, he will continue leading his charmed political life and endure as the charming cherub with a special dispensation for naughtiness.