Dollar Account affair

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The Dollar Account affair (Hebrew: פרשת חשבון הדולרים, Parashat Heshbon HaDolarim‎) was a political scandal that broke 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.^[1] It led to Rabin's de facto resignation from the government.

[edit] The scandal

The affair broke out on March 15, 1977, following the revelation by Haaretz journalist Dan Margalit that a joint dollar account in the names of Mr. and Mrs. Rabin, opened in a Washington, D.C. bank during Rabin's term of office as Israel ambassador (1968-73), was still in operation, 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.^[2] Although Mrs. 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£25O,OOO; Rabin was given an administrative fine of I£ 15,000.^[3]

[edit] 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 election.^[4]

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.^[5]

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.^[6]

Today, Rabin's resignation is sometimes seen as a display of public responsibility that is unmatched by contemporary politicians, such as Ariel Sharon in 2003.^[7]