The Sad Downfall of Yitzhak Rabin

In the cities and towns of Israel last week, the people had reason to rejoice. It was Passover week, when families celebrate the flight from Egypt more than 3,000 years ago. The populace also had a grand secular occasion to celebrate: the upset victory (78 to 77) of a Tel Aviv basketball team over Italy in the European championship at Belgrade.

Once the game was finished, however, those who stayed tuned to Israeli radio and TV heard a shocking message. Premier Yitzhak Rabin, 55, had waited for game's end to take to the air waves and declare another stunning upset--his own. Rabin announced to the country that he would not lead his ruling Labor Party in the May 17 elections --and that he wanted to resign immediately. His reason: he and his wife Leah had held two U.S. bank accounts in violation of Israeli law, and their value was far higher than the couple had earlier admitted.

Little Choice. Rabin had little choice in resigning, since he was already under police investigation for violation of Israel's foreign currency laws. His stepping down, said a grim Rabin, was a "sad end" to a three-year political stewardship. Finance Minister Yehoshua Rabinowitz had another phrase for it: "the biggest political crisis in the history of the state of Israel."

The seeds of Rabin's humiliating downfall had been germinating for weeks, ever since the Tel Aviv daily newspaper Ha'aretz reported that the Premier's wife had held a bank account in Washington for the past four years (TIME, March 28). It is illegal for Israeli citizens to keep money abroad without special permission, and Mrs. Rabin had not sought such permission. She provided an explanation that sounded convincing enough at the time: the account at the National Bank of Washington, which amounted to about $2,000, was an old one, dating from the years (1968-73) when Rabin served as Israel's Ambassador to the U.S.

Though his wife was in charge of family finances, Rabin was co-signer on the account, and. he conceded, "the responsibility was mine as much as hers." A lawyer for the couple also said that the Rabins had been unaware that a foreign account such as theirs had to be closed within a reasonable time after their return to Israel.

The Rabins' apparent candor and the small amount of money involved made the incident seem forgivable to the Israeli public. The feeling was that Rabin would escape with a substantial fine--but with his career intact.

But the Rabins had not told the whole story. As Finance Ministry officials went over the bank records, they discovered a second account, containing nearly $6,000. In all, the Rabins had $18,700 in the two accounts when they left Washington, and they had transferred only some $10,500 back home. Israel's Attorney General Aharon Barak decided that the matter was serious enough to justify calling in the state prosecutor to investigate further. He also decided that Mrs. Rabin bears responsibility for the accounts; if found guilty in court, she could face up to three years in jail or a heavy fine. Confronted with the evidence on the eve of an election campaign, Labor Party members began demanding Rabin's resignation.

The question in every Israeli's mind was: Why did the Premier get involved in such tawdry troubles? There was no ready answer. Rabin, educated in a socialist home and trained in the spartan Israeli army, was hardly a playboy. Nonetheless, the Rabins live well by Israeli standards, and Mrs. Rabin has a taste for expensive knickknacks and U.S.-purchased dresses.

As the shock wore off, Rabin won sympathy and applause from Israelis for giving up power. Said the English-language Jerusalem Post: "He has done a service to the nation by his act. It will help clarify the standards of rectitude that the nation expects from its public officials." Rabin, however, left his government in a constitutional and political mess. Technically, he could not resign; that is against Israeli law. When he called for elections last December, Rabin became head of a caretaker government; now he cannot abdicate that responsibility. Explained an Israeli legal expert: "Even if the government allowed Rabin to take a 'vacation'--which would be unprecedented--he would still carry the responsibility for the actions of the government." Nevertheless, that is the course the Cabinet is expected to take early this week.

Other problems complicated the Labor Party's choice of a successor. Only six weeks ago, Rabin won re-endorsement as head of the party by narrowly defeating Defense Minister Shimon Peres by 41 out of nearly 3,000 votes. Party bylaws state that a replacement can be chosen only at another convention. In hectic days of negotiation after the bombshell, party chieftains decided that the 809-member central committee of the party could make the choice.

New Slate. The man with perhaps the strongest claim on the right of succession was the suave, tough-minded Peres (see box). There was speculation that Foreign Minister Yigal Allon, 58, might contest Peres for the nomination. Allon, whose strength lies with the dovish left-wing Mapam faction of the party, eventually decided not to do so. Thus the path was cleared for a party-unifying compromise: Peres would run for Premier, his ally Abba Eban would be nominated for his old post of Foreign Minister, and Allon would be offered Defense. On Sunday, the Central Committee voted overwhelmingly for Peres to head the Labor Party slate.

Even with a new slate, Labor faces a potential electoral catastrophe in May. Tired, internally riven, battered by earlier scandals, the party was in poor shape for a fight before the latest disaster. Its strength in the 120-seat Knesset has dropped in the past twelve years, from 65 seats to 53. Moreover, the party bears an image of listlessness and indecision.

Says a spokesman for the right-wing Likud coalition: "Everything leads to the conviction that Labor will not head the government any longer." Not quite. Likud Leader Menachem Begin is still in the hospital after a severe heart attack, and Yigael Yadin, head of the upstart Democratic Movement for Change, is fighting libel charges. Even so, Labor Stalwart Abba Eban confessed to doubts that the party "can still turn the wheel and gain momentum." If not, the sad end of Yitzhak Rabin could be followed by the demise of the Labor government he has suddenly ceased to lead.

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