Would-be central bank governor testifies over ‘shoplifting’

Next intended Bank of Israel governor Jacob Frenkel landed in Israel Friday, initially in secret, to testify before the committee charged with vetting his appointment. Frenkel provided his version of events regarding an alleged shoplifting incident in Hong Kong seven years ago.

Committee members, headed by former Supreme Court justice Jacob Turkel, are awaiting additional material, according to Army Radio, before issuing their decision on his appointment.

Despite earlier reports that the item in question was a perfume bottle taken from a duty free store at Hong Kong Airport, the business daily Calcalist reported that the alleged shoplifting involved another item altogether. Some reports indicated it was a garment bag or suit bag. Frenkel did not tell the committee about the incident when he initially appeared before it.

Reports have indicated that Frenkel contacted Israeli diplomats to help extricate him from the incident at the time; some reports have suggested he took the item in question out of the store, having been asked to carry it by a fellow Israeli passenger and believing it had been paid for. Subsequent reports said he asked the fellow passenger, who was purchasing perfume herself, to pay for the suit bag, and took it out of the store erroneously believing she had done so.

Earlier in the week, Frenkel said he fully expected to take office in October as scheduled.

Frenkel said the matter was “an unfortunate incident” that “stemmed from a misunderstanding” and that ended with an apology to him from the Hong Kong authorities.

Prior to Friday’s meeting, Army Radio quoted sources in the committee as also assessing that Frenkel’s appointment to succeed Stanley Fischer would proceed as scheduled.

Last month Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid chose Frenkel, who headed the Bank of Israel for almost a decade between 1991 and 2000 and who currently heads the prestigious banking firm JPMorgan Chase, as the man to replace Fischer at the helm of Israel’s top economic institution.

Educated at the Hebrew University of Jerusalem and the University of Chicago, the 70-year-old economist has held a number of key positions in top international firms, including AIG and Merrill Lynch. He has also worked in leading international finance organizations, including the International Monetary Fund. He won the Israel Prize for economics in 2002.