Netanyahu to consider vetting bank chief picks before nomination
Move would come after two appointees to head the Bank of Israel withdraw from process over rumors of past misconduct
Prime Minister Benjamin Netanyahu is reportedly considering changing the process by which the Bank of Israel governor will be chosen, after two of his hand-picked candidates withdrew amid alleged personal scandals.
Until now, would-be governors of Israel’s central bank were nominated by the prime minister and finance minister, after which they were vetted by a committee headed by former Supreme Court justice Jacob Turkel.
However, in the last week, two nominees for the post have withdrawn from the running to replace Stanley Fischer, who stepped down more than a month ago.
As a result, Hebrew media reported on Monday that Netanyahu is working to have future possible candidates scrutinized by the committee before being nominated by the prime minister and finance minister. The hunt for a governor has proved somewhat farcical — Fischer announced he was leaving in January — and the prime minister was said Monday to be planning to give several names to the committee, have them all vetted, and then make a choice out of those who clear the process.
Last Monday, Jacob Frenkel, who headed the Bank of Israel from 1991-2000, notified Netanyahu and Finance Minister Yair Lapid that he would not be taking up the position for which he was personally selected by the prime minister just a month ago. Frenkel said that he was fed up with the rampant media hype over what he insisted was an erroneous accusation of shoplifting at a Hong Kong airport seven years ago.
On Wednesday, Bank Hapoalim economist Leo Leiderman was named as the replacement candidate, but he withdrew his candidacy on Friday.
According to Hebrew media reports, the turnaround was a consequence of anonymous complaints about him made to Turkel’s office.
Haaretz claimed Friday that these included complaints related to alleged sexual harassment. Channel 2 said Saturday indicated that such complaints were not taken seriously, but said that these and other complaints, including suspicions relating to personal tax matters and media reports about his use of an astrologer, had combined to prompt Leiderman to withdraw from the post.
On Sunday, Channel 2 quoted Leiderman saying he had never faced complaints about his conduct that led to his leaving any of his jobs, and that Turkel had told him no complaints of alleged sexual misconduct had been raised against him.
Army Radio reported Friday night that legal advisers told Leiderman he would likely be able to pass the vetting panel, but that the process “would not be pleasant.”
In Frenkel’s case, the former Bank of Israel chief explained that, in the incident at the Hong Kong airport duty free store, he took a large travel bag out of the shop because he thought a female colleague was paying for it on his behalf. “It was a misunderstanding,” he said.
Karnit Flug, the acting governor, was said Saturday night to be prepared to consider taking the job, even though she had announced her resignation on Wednesday when she was passed over for the post.
But Netanyahu is widely said to disagree with Flug’s economic philosophy. Flug, a 25-year Bank of Israel veteran, was apparently Stanley Fischer’s preference for the post. She has also been strongly endorsed by opposition leader Shelly Yachimovich.
Other names mentioned Saturday for the post included various current and former major bank chiefs; National Economic Council head Eugene Kandel, a respected figure who was said to have made clear he did not want the job; Manuel Trajtenberg, who helped Netanyahu grapple with pressure for economic reforms at the height of social protests two years ago, and even the veteran lawyer and ex-minister Yaakov Neeman.
The Times of Israel Community.