Dollar Account affair
Encyclopedia
The Dollar Account affair was a political scandal in Israel
in 1977, following the exposure of an illegal US Dollar bank account
held by Israeli Prime Minister
Yitzhak Rabin
and his wife Leah. It led to Rabin's de facto resignation from the government.
journalist Dan Margalit
revealed that a joint dollar account in the names of Yitzhak and Leah Rabin, opened in a Washington, D.C.
, bank during Rabin's term of office as Israel ambassador (1968-73), was still open, in breach of Israeli law
. Such minor offenses were usually resolved by an administrative fine, but Attorney-General Aharon Barak
announced his intention to prosecute, coining the phrase "Buzaglo test
", meaning that a leader must be held to the same judicial standards as an ordinary citizen. Although Leah Rabin explained that she alone had operated the account, Rabin publicly accepted joint moral and legal responsibility. The sum involved was first thought to be $2,000, well below the $5,000 limit above which offenses were punishable by an administrative fine. It turned out later that the maximum deposit in the account had been over $20,000. Rabin thereupon announced (April 8) that he was withdrawing from the first place in the Alignment
's Knesset
list, and Defense Minister Shimon Peres
was unanimously elected to succeed him. Since, according to Israeli law, resignation from a caretaker government was impossible, Rabin took a vacation from his duties as prime minister and Peres took his place. Mrs. Rabin was tried and fined I£250,000; Rabin was given an administrative fine of I£ 15,000.
. Margalit's source later revealed himself to be the Israeli embassy in Washington's security officer. He said his motive for informing was moral rather than political, and that he himself had always been a Labor voter.
In 2002, Maariv
correspondent Ben Caspit reported that Dalia Rabin-Pelossof
, Yitzhak and Leah's daughter, said she recently spoke with Professor Yaakov Ne'eman, a lawyer. She said he told her that many years ago he discovered a yellowing, forgotten internal regulation in the Finance Ministry's archives. This regulation stipulated that a member of the Foreign Ministry who completed his term abroad was permitted to hold a dollar account for three more years. Neeman said that following the discovery, he contacted Barak, who denied knowing about it. Formally, the regulation did not apply, as the account was discovered over three years after Rabin completed his term as ambassador in Washington. However, it might have dissuaded Barak from prosecuting, thus perhaps preventing Rabin's resignation. In an interview given to Haaretz in 2009, Barak said that had Yitzhak Rabin not resigned, Barak would have tried him as well as his wife.
Today, Rabin's resignation is sometimes seen as a display of public responsibility unmatched by contemporary politicians.
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
in 1977, following the exposure of an illegal US Dollar bank account
Bank account
A Bank account is a financial account recording the financial transactions between the customer and the bank and the resulting financial position of the customer with the bank .-Account types:...
held by Israeli Prime Minister
Prime Minister of Israel
The Prime Minister of Israel is the head of the Israeli government and the most powerful political figure in Israel . The prime minister is the country's chief executive. The official residence of the prime minister, Beit Rosh Hamemshala is in Jerusalem...
Yitzhak Rabin
Yitzhak Rabin
' was an Israeli politician, statesman and general. He was the fifth Prime Minister of Israel, serving two terms in office, 1974–77 and 1992 until his assassination in 1995....
and his wife Leah. It led to Rabin's de facto resignation from the government.
Affair
On March 15, 1977, HaaretzHaaretz
Haaretz is Israel's oldest daily newspaper. It was founded in 1918 and is now published in both Hebrew and English in Berliner format. The English edition is published and sold together with the International Herald Tribune. Both Hebrew and English editions can be read on the Internet...
journalist Dan Margalit
Dan Margalit
-Biography:Dan Margalits studied international relations and modern Jewish history at the Hebrew University of Jerusalem. He began writing for the Israeli newspaper Haaretz in the 1960s. He is married to Dana. His daughter, Shira Margalit, is the deputy director-general of the Reshet television...
revealed that a joint dollar account in the names of Yitzhak and Leah Rabin, opened in a Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
, bank during Rabin's term of office as Israel ambassador (1968-73), was still open, in breach of Israeli law
Israeli law
Israeli law is a mixed legal system reflecting the diverse history of the territory of the State of Israel throughout the last hundred years , as well as the legal systems of its major religious communities...
. Such minor offenses were usually resolved by an administrative fine, but Attorney-General Aharon Barak
Aharon Barak
Aharon Barak is a Professor of Law at the Interdisciplinary Center in Herzliya and a lecturer in law at the Hebrew University of Jerusalem, the Yale Law School, and the University of Toronto Faculty of Law....
announced his intention to prosecute, coining the phrase "Buzaglo test
Buzaglo test
The Buzaglo test is a phrase coined in Israeli law which subsequently developed into an idiom in Israel.In 1976, the Attorney General of Israel at the time, Aharon Barak, decided to begin a criminal investigation against Asher Yadlin in relation to the Yadlin affair...
", meaning that a leader must be held to the same judicial standards as an ordinary citizen. Although Leah Rabin explained that she alone had operated the account, Rabin publicly accepted joint moral and legal responsibility. The sum involved was first thought to be $2,000, well below the $5,000 limit above which offenses were punishable by an administrative fine. It turned out later that the maximum deposit in the account had been over $20,000. Rabin thereupon announced (April 8) that he was withdrawing from the first place in the Alignment
Alignment (political party)
The Alignment was an alliance of the major left-wing parties in Israel between the 1960s and 1990s. It was established in 1965 as an alliance of Mapai and Ahdut HaAvoda but was dissolved three years later when the two parties and Rafi formally merged into the Israeli Labor Party...
's Knesset
Knesset
The Knesset is the unicameral legislature of Israel, located in Givat Ram, Jerusalem.-Role in Israeli Government :The legislative branch of the Israeli government, the Knesset passes all laws, elects the President and Prime Minister , approves the cabinet, and supervises the work of the government...
list, and Defense Minister Shimon Peres
Shimon Peres
GCMG is the ninth President of the State of Israel. Peres served twice as the eighth Prime Minister of Israel and once as Interim Prime Minister, and has been a member of 12 cabinets in a political career spanning over 66 years...
was unanimously elected to succeed him. Since, according to Israeli law, resignation from a caretaker government was impossible, Rabin took a vacation from his duties as prime minister and Peres took his place. Mrs. Rabin was tried and fined I£250,000; Rabin was given an administrative fine of I£ 15,000.
Aftermath
The affair followed a series of corruption scandals and is often seen as one of the reasons for the Alignment's loss in the upcoming electionIsraeli legislative election, 1977
The Elections for the ninth Knesset were held on 17 May 1977. For the first time in Israeli political history, the right-wing, led by Likud, won the election, ending almost 30 years of rule by the left-wing Alignment and its predecessor, Mapai...
. Margalit's source later revealed himself to be the Israeli embassy in Washington's security officer. He said his motive for informing was moral rather than political, and that he himself had always been a Labor voter.
In 2002, Maariv
Maariv
Maariv is a Hebrew language daily newspaper published in Israel. It is second in sales after Yedioth Ahronoth and third in readership after Yedioth Ahronoth and Israel HaYom. In a TGI survey comparing the last half of 2009 with the same period in 2008, Maariv saw its market share fall slightly...
correspondent Ben Caspit reported that Dalia Rabin-Pelossof
Dalia Rabin-Pelossof
Dalia Rabin-Pelossof is a former Israeli politician. The daughter of former Prime Minister and Minister of Defense Yitzhak Rabin, she served as a member of the Knesset for the Centre Party, New Way and the Labor Party between 1999 and 2003.-Biography:...
, Yitzhak and Leah's daughter, said she recently spoke with Professor Yaakov Ne'eman, a lawyer. She said he told her that many years ago he discovered a yellowing, forgotten internal regulation in the Finance Ministry's archives. This regulation stipulated that a member of the Foreign Ministry who completed his term abroad was permitted to hold a dollar account for three more years. Neeman said that following the discovery, he contacted Barak, who denied knowing about it. Formally, the regulation did not apply, as the account was discovered over three years after Rabin completed his term as ambassador in Washington. However, it might have dissuaded Barak from prosecuting, thus perhaps preventing Rabin's resignation. In an interview given to Haaretz in 2009, Barak said that had Yitzhak Rabin not resigned, Barak would have tried him as well as his wife.
Today, Rabin's resignation is sometimes seen as a display of public responsibility unmatched by contemporary politicians.