The blank cheque stops here

By Anshel Pfeffer, July 24, 2008

Rich foreign donors are going to be much more reluctant to bankroll Israel

One of the ironies of Ehud Olmert's calamitous premiership is that there is a general agreement among establishment veterans that his is the best-managed Prime Minister's Office in living memory. Meetings take place on schedule, there is a clear decision-making process, teams formulate policy, and the coterie of advisers around the PM work harmoniously. What a pity that, after a series of Byzantine administrations, the first one to get its act together is about to go down under a flurry of corruption investigations.

One issue Olmert has taken seriously is the Israel-Diaspora relationship. His right-hand man, Cabinet Secretary Ovad Yehezkel, has been working on a new initiative to unite the Jewish people around a pro-Israeli agenda. The new approach was to be a radical shift in the balance between the two sides, so radical that when a leak appeared in the Jerusalem Post saying that Olmert was going to tell the world's Jews that Israel doesn't need their money any longer, the PMO hurried to issue a denial.

The policy was finally unveiled last month. Olmert spoke of the need "for the government of Israel to assume much greater responsibility for the Jewish future worldwide... In practical terms, greater responsibility translates in to greater investment."

It is another irony, therefore, that the first prime minister who is proposing that Israel start spending money on world Jewry, rather than just accepting its largesse, will almost certainly be forced to resign over allegations that he himself took some of that money. Five out of the six investigations in to Olmert's financial affairs deal with his relationships with wealthy American Jews and Jewish organisations.

For five long days, American-Jewish fundraiser Morris (Moshe) Talansky was grilled in the Jerusalem District Court by Olmert's attorneys. They pored over his personal affairs and business dealings, trying to prove that the 75-year-old who worked with Olmert for two decades, funneling millions into projects in Jerusalem and also to his political campaigns, is not trustworthy enough to testify about payments that may have found their way in to the PM's pocket.

Talansky is not alone. Over the last couple of years, a small but select group of Jewish financiers has also been questioned by Israeli police investigators over their long relationships with Olmert. Will the threat of such indignities cause philanthropists take their money elsewhere? Why give millions to Israeli causes if they carry the risk of coming under suspicion of using bribery to further their business interests?

Sir Moses Montefiore and Baron Edmond Rothschild contributed huge sums of money to found settlements and concerns that would allow the Jews in Israel before the onset of Zionist immigration to lead economically productive lives. But they also set up organisations that would ensure the proper management of these funds and took close personal interest in their investments. With the establishment of Israel, that relationship changed. An intimacy with the leaders of the state began carrying a prestigious cachet. For many millionaires, the princely welcome they received - photographs with the prime minister, visits to air-force bases, and fancy marble plaques - were deemed sufficient return for their cheques; not many questions were asked about how the money was used.

But growing disillusionment with Israeli politicians and the new trend of "responsible giving" in philanthropy is changing all that. So far, there are no signs of a downturn in donations to Israel, but there is a definite shift away from blank-cheque signing towards a much greater degree of involvement. Many donors have set up their own family foundations, with on-site project managers and accountants, no longer content to let the Israelis take charge. There is a growing disinclination to give money to large general-purpose fund. Being on first-name terms with a minister isn't worth being questioned by the police.

Olmert will probably not have the chance to carry out his vision of changing Israel-Diaspora relations, but it is already happening without him.

Last updated: 10:10am, July 25 2008