Confronting Corruption

What Israelis can learn from the AIG bailout.

Dr. Moshe Dann,

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The Congressional hearings on extravagant bonuses paid to AIG executives were an example of real democracy at work. And a model to which Israelis should pay close attention.

Widespread outrage over bonuses to employees of AIG's financial services unit - which was primarily responsible for the meltdown of the company and a looming economic disaster - prompted a public investigation. Broadcast
American democracy is a powerful and dynamic political mechanism.
live, it explains why American democracy is a powerful and dynamic political mechanism.

Regulatory agencies were severely criticized for being "asleep at the wheel," unable to protect the public from the voracious greed of financial manipulators who brought the world's economy to its knees. AIG executives were grilled by irate Congressmen. Media coverage was straightforward and honest. Transparency triumphed.

This is American democracy at its best; representatives of the people publicly cross-examining those who should have known better, those who failed, and those who are guilty of incompetence and, perhaps, corruption. As an American, I was proud; as an Israeli, I was jealous.

Why couldn't that happen here? Why are investigations of corruption in Israel so rare, so often secret, and the perpetrators rarely punished? Why are the Comptroller and Accountant General the only recourse for examining government corruption and incompetence? Why is the Knesset - our legislative body - so weak and ineffectual?

Why does our judicial system - courts, prosecutors, police, etc. - have exclusive and unmitigated power, a law unto themselves?

Without transparency, full disclosure and honest evaluation, what is "democracy" worth?

This may explain why fewer and fewer Israelis believe in the system, why fewer participate and take elections seriously. And why none of the major political parties is willing to change.

Israelis are not apathetic. Cynical about change, helpless to extract any accountability, and fed up with the system, they understand that the ballot box is meaningless and that those who rule economically and politically - a handful of powerful families, "the oligarchs" - are the reality of Medinat Yisrael. All polls reflect the sense of pervasive corruption and disillusionment.

Watching the Congressional hearings in Washington via my computer in Jerusalem, I remember learning about the vibrant discussions that took place in Philadelphia 250 years ago to establish democratic institutions and ensure they would be protected. Enshrined in legislation and judicial decisions, these safeguards provided a wise and clear structure for what every citizen desires: redress of grievances and honest government.

The American system isn't perfect - as these Congressional hearings demonstrate - but it has the tools to rectify, to make change possible, and to punish those who are corrupt or incompetent. Without a system of justice and fair play, without transparency, real democracy is impossible.

It's called, simply, "checks and balances" - a system which builds in regulation, restraint and reform; a megaphone for the voice of the people, a protection against the abuse of power.

The problem in Israel is that there is no mechanism, no institution, and no authority that provides for public input
Why couldn't that happen here?
as a corrective to governmental failure. This has led those in power to perpetuate their rule, often at the nation's expense, to ignore the public good, to trample on civil and human rights in the pursuit of a political agenda.

The expression of righteous indignation at this Congressional hearing is, of course, not an answer to the failure of federal and state officials to monitor and prevent what became a financial crisis. It does declare, however, that someone must take responsibility and will be held accountable. It says, loud and clear, that failure, incompetence and avarice should not be tolerated or rewarded.

The effect of such public inquiry is not only to rectify a problem and perhaps reform the system, but more importantly, to give people a sense that their voices are heard, that they matter; in so doing, wounds can heal and a people can feel bound to their nation.





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