Last updated: 17 May, 2011

Israeli watchdog raps Barak over business dealing

Israel’s state watchdog on Tuesday rapped Defence Minister Ehud Barak for waiting until the last possible moment before taking up his post to divest himself of business holdings.

In his annual report, State Comptroller Micha Lindenstrauss said Barak’s transfer of his holdings in consultancy firm Ehud Barak Limited to his daughters days before becoming a cabinet minister “was not in keeping with the spirit of the rules” meant to prevent any possible conflict of interest.

The report said Barak was already assured of a place in the coalition of then-premier Ehud Olmert when he won the first round of primaries in the Labour party on May 28, 2007.

He waited until June 15, three days before becoming a minister, to transfer the shares, the report said.

“Even though he had not yet formally been appointed a minister at the time of transferring the shares to his daughters he could have been seen from the public viewpoint as someone who had already been appointed,” it added.

Lindenstrauss did not accuse Barak of any crime.

Barak himself denied breaking the law or being in any conflict of interest. “None of the clients of these companies have or had any business dealings whatsoever with the defence ministry,” he said in a statement. “Receipt of money by these companies is not prohibited according to the rules for preventing conflict of interest in force today.”

Last year party colleagues called on Barak to resign and the leader of the country’s trades union movement called him “an imbecile” for allowing his wife to employ a Filipina maid with no work permit in their luxury Tel Aviv apartment.

In January, faced with growing calls by Labour ministers to take them out of the coalition with hawkish Prime Minister Benjamin Netanyahu and his right-wing partners, Barak quit Labour to set up a new centrist party called “Independence” and kept his cabinet portfolio.