NATION/WORLD
The Michigan Daily - Monday, April 21, 1997--9
Netanyahu escapes
indictment in scandal,
still faces political crisis
JERUSALEM (AP) - Prime
Minister Benjamin Netanyahu
escaped indictment in an influence-
peddling scandal yesterday, with
prosecutors saying they lacked evi-
dence to try him on charges of fraud
and breach of trust despite his "puz-
zling" conduct. .
However, Netanyahu still faced a
political crisis with coalition allies
threatening to bolt his government and
his personal reputation and credibility
damaged.
"The decision is to close - for lack
of sufficient evidence - the case
against the prime minister," Attorney
General Elyakim Rubinstein told a
Enews conference.
Rubinstein said evidence provided
by police did suggest that Netanyahu
might have appointed Roni Bar-On
as attorney general to satisfy a coali-
tion ally who is facing a corruption
trial.
Netanyahu's actions "raised puz-
zling questions," he said. "From the
evidence there is suspicion that there
were other (than legitimate) considera-
tions" in the appointment. "But we
don't think this can be proved beyond
a reasonable doubt."
Rubinstein also rejected a police
recommendation to indict Justice
Minister Tsachi Hanegbi. He said
prosecutors still were weighing
charges against Arieh Der], leader of
the ultra-Orthodox Shas Party, who is
suspected of trying to engineer the
appointment of Bar-On in exchange
for a plea bargain that would keep
Deri out of jail. Israeli media had
reported an indictment against Deri
was certain.
Rubinstein said that Netanyahu's
top political aide, Avigdor Lieberman,
and a contractor who is close to
Netanyahu, David Appel, would face
further investigation.
Netanyahu admitted yesterday
that he had made mistakes and
vowed to clean up the process of
wheeling and dealing that has sur-
rounded the appointment of senior
officials.
"The bottom line is this: I commit-
ted no crime, and the attorney general
confirmed this," Netanyahu said in a
televised address to the nation.
"It's clear to me today that we must
improve the process of choosing
senior officials;" he said. "But there is
a big difference between a mistake and
a crime. I will learn the lessons and
implement them."
Opposition Labor Party officials
said Netanyahu would find it difficult
to govern in the wake of the criticism
of his conduct.
"Every honest person must ask him-
self if he accepts the moral authority of
a man who is not on trial only because
... there is insufficient evidence;" said
Ehud Barak, the leading candidate to
take over as Labor Party leader this
summer.
"I fear the prime minister will find it
very difficult to function."
Yossi Sarid, head of the liberal
Meretz Party, said he would ask the
Supreme Court to overturn the prose-
cutors' decision and force Netanyahu's
indictment.
A government official close to
Netanyahu, who spoke on condition of
anonymity, said the prime minister
received an advance copy of the report
and reviewed it with his aides and his
AR PHOTO
Orthodox Jews demonstrate yesterday outside the Justice Ministry In Jerusalem to show their support for Israeli Prime
Minister Benjamin Netanyahu.
attorney.
The official said the language used
in reference to Netanyahu was "very
mild," accusing the prime minister of
"failing to internalize" warnings he
received against appointing Bar-On in
January.
The prosecutors were harder on
Deri.
"We are uncomfortable, to say the
least, that a lawmaker .. accused of
criminal acts involves himself in
selecting (the attorney general),"
Rubinstein said.
Shas lawmaker Shlomo Benizri said
if only Deri is indicted, it would
increase tensions between the half of
Israel's Jews who are of Sephardic, or
Middle East and North African, back-
ground - the party's constituency -
and Israelis of European background.
"It could bring about violence;' he
said.
In its report breaking the story of the
scandal three months ago, Israel
Television said Deri traded his support
and his party's vote for Israel's with-
drawal from Hebron for an attorney
general.
Deri's Shas Party reportedly was
planning to meet later yesterday to dis-
cuss whether they would remain in
Netanyahu's coalition.
Treasury ethics watchdog
gave friend no-bid contract
AP PHOTO
The flag of Laurent Kabla's rebel force is flown in the Zairian capital of Kinshasa yesterday. With half the country in rebel
hands and opposition to Zaire President Mobutu Sese Seko growing many are preparing to flee the country.
*Za rte presidentclngs on
despite insuronal losses
WASHINGTON (AP) - Shortly after becoming the
Treasury Department's ethics watchdog, Valerie Lau
arranged a no-bid contract for a longtime acquaintance
who had written the White House recommending her for
her job.
Lau's involvement has prompted a rare congressional
inquiry into a department's inspector general, an official
whose normal duties are policing the conduct of others
and guarding against waste, fraud and abuse.
Documents obtained by The Associated Press show that
Lau wrote a Treasury contracting
office on Dec. 11, 1994, to select
auditor Frank Sato to conduct a man- Tis Wa
agement review study of her office.
Sato had proposed the study only the geds to I
day before.
Lau asked that the contract be a watched ".
"sole source procurement," not to be
competitively bid because of an - Sen. Cha
"unusual and compelling urgency"
for the review, the documents state.
Treasury quickly approved a
$113,000 contract for Sato & Associates. The firm ultimate-
ly was paid $90,776, the documents show.
A year earlier, Sato had written the White House personnel
office to recommend Lau "very highly" for an inspector gen-
eral's job, saying he had known her since 1980 and found her
to be "a uniquely qualified person with high integrity and
character."
Treasury officials say Sato was chosen for the contract
because he was a former federal inspector general "uniquely
qualified" to review Lau's office and make recommendations
to make it more efficient.
The disclosure marks the second time in a week that Lau's
conduct has come under scrutiny. Last Thursday, she admit-
ted she gave inaccurate testimony to Congress but blamed the
error on bad information from her staff.
Congressional investigators are reviewing the Sato con-
tract.
"At best, in this case, there is an appearance of impropriety
that underminesthe public confidence in this IG. This watch-
dog needs to be watched," said Sen. Charles Grassley (R-
Iowa), chair of one of the Senate's investigative subcommit-
tees.
Lau refused to be interviewed. But in written answers
to Congress, she acknowledged she developed "profes-
sional acquaintances" with Sato and another partner in
his firm over the years as they served as government
auditors.
She did not mention Sato's letter of recommendation to
the White House. Treasury
spokesperson Howard Schloss said
itchdog Lau was aware of the letter but had
not solicited it.
Federal ethics regulations advise
employees to avoid actions that "give
rise to an appearance of . . giving pref-
erential treatment" to someone with
arles Grassley whom they have an outside relation-
(R-Iowa) ship.
Lau told Congress she chose Sato's
firm because she knew he and his
associate had "unique qualifications' as former inspectors
general to provide "expertise in the area of audit, investi-
gations and managing" her office.
Treasury officials could not immediately answer
whether Lau consulted a third party, disclosed her outside
relationship with Sato or reviewed the ethics rules before
proceeding with the contract.
Sato worked for almost a decade as an inspector gener-
al at two different federal departments, then as an auditor
at the Deloitte & Touche accounting firm before starting
his own business. He did not return a'message left at his
home Friday.
In his May, 1993 letter recommending. Lau, he told the
White House he had known Lau since 1980 and worked with
her "on both professional accounting/financial management
and Asian American issues."
"I have found her to not only be a top professional, but a
kind of person you enjoy working with, he wrote.
As opposition to presi-
dent mounts, many
prepare to flee
KINSHASA, Zaire (AP) Walk
into Western embassies in Kinshasa and
chances are there will be a stack of
passports belonging to wealthy
Zairians, all looking for an exit.
If the stories swirling through the
teeming streets of the capital and
ark corridors of parliament are true,
hose closest to President Mobutu
Sese Seko have booked 400 hotel
rooms across the river in the
Congolese capital, Brazzaville, in
case they have to flee. And Mobutu's
presidential guards are smuggling
their families out of town under cover
of darkness.
With half the country in rebel hands
and opposition to Mobutu gaining
momentum, the questions in the capi-
*al may have changed: It's no longer
whether the rebels will reach
Kinshasa, but when. And, will it by
soon enough to forestall an uprising by
soldiers and civilians demanding an
end to more than 31 years of bullying
and corrupt rule.
In public, Mobutu and his backers
still perform as if there arc battles left
for them to fight in a war that most
political observers say was lost long
ago. A "major government commu-
nique" read on state-run TV
Thursday night denounced an
American company. biilion-d !hir
deal to mine copper, cobalt and znc
in rebel-held territory ad de'lared it
"null and void."
Never mind that the government
itself is null and void in that part of
Zaire and that its credibility is in as
much jeopardy as the national currency,
now trading at 175,000 to the U.S. dol-
lar.
The question is whether the cancer-
ridden Mobutu, despite his efforts to
appear in control, has accepted the real-
ity and is prepared to negotiate his exit
before rebel leader Laurent Kabila
comes to town.
"He has no choice. He has no army.
He has lost the support of the people,
There's no money left in the state trea-
sury," said Jose Zola Kinkela, secre-
tary-general of the Independent
Democratic Union party. "Kabila will
take the country - there's no doubt
about it."
Mobutu's best move, say Zola and
others, would be to salvage what honor
he has left by retiring into foreign exile
before he and those linked to his regime
are forced to flee.
That could involve announcing he
will not contest long-promised presi-
dential elections in exchange for
Kabila halting his advance on
Kinshasa and acceptng a transitional
government until voting takes place.
Despite Kabila's war talk, internation-
al persuasion could force him to accept
such a scenario, said Valentin Mubake
Nombi, an opposition lawmaker who
attended negotiations in South Africa
last month between government and
rebel envoys.
"I think Mr. Kabila has to stop now,
because although he's a war chief, he
also wants to govern this country. To do
this, he has to win over the public opin-
ion, and to do this he has to act as a
politician, not a dictator," said Mubake.
"The last thing Zairians want is another
Mobutu, and the last thing the interna-
tional community will accept is another
Mobutu."
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