Yadlin Affair - Scandal

Scandal

The cabinet decided, on September 5, to appoint Yadlin, former head of the Histadrut's economic enterprises, governor of the Bank of Israel to succeed Moshe Sanbar on November 1. On the day after the cabinet decision, Police Minister Shlomo Hillel and Attorney-General Aharon Barak were informed that the police had been inquiring into allegations against Yadlin of improper conduct in the management of Kupat Holim. Yadlin declared that the allegations were without basis and that he would welcome an investigation.

After a month of intensive police investigation, Yadlin was detained for interrogation on suspicion of having accepted bribes and undercover commissions in transactions affecting Kupat Holim. On October 24 the cabinet resolved, without prejudging the charges against Yadlin, that it could no longer delay the appointment, and named Director-General of the Treasury Arnon Gafni as governor of the Bank of Israel.

There was considerable criticism of the daily publicity by the press to unproven rumors of charges against Yadlin, which were believed to have been fed by unauthorized disclosures from police sources. In mid-December Yadlin was charged with taking bribes totaling I£ 280,000, as well as other offenses, and was remanded in custody until his trial. On March 14, 1977, Yadlin pleaded guilty to some of the charges, involving bribes totaling I£ 124,000, but claimed that he had handed over I£ 80,000 of the money to Labor party funds, adding that he had raised "millions" for the party. The judge did not accept his claim and sentenced him to five years' imprisonment and a fine of I£ 250,000. Further charges were to be investigated by the police after consideration of Yadlin's appeal.