Olmert's public

Guy Rolnik The Marker (Haaretz) 17.2.2004
www.themarker.com/eng/archive/arc_article.jhtml?ElementId=gr20040217_01e

"In some situations decisions need to be made that won't be popular with the
public. Raising bread prices is never an easy matter. It is easier to lower
prices, tariffs and taxes than to raise them." (Industry, Trade and Labor,
and Communications, Minister Ehud Olmert addressing the Knesset Finance
Committee on Monday.)

Yes, it seems we were wrong about him, Industry and Trade minister Ehud
Olmert. All that censure of his decision to hike bread prices at this time
of economic stress was misguided. Olmert, it transpires, is a courageous
politician and statesman who's under fire solely and only because he is
prepared to make unpopular decisions.

Yes, we made a mistake.

The mistake was that the popular press suddenly remembered to report on his
decisions after he touched the bread. Thing is, if you check his decisions
since he took his multiple jobs last year, you find that it's systematic
with him.

The real question is how you define "public". We think there is a
fundamental mistake right here: there are "publics" to whom Olmert lends an
ear, and if we shine the spotlight on these "publics", we'll find that his
decisions are very popular indeed. Contravening what the minister told the
Knesset Finance Committee on Monday, the "publics" Olmert heeds adore having
tariffs and prices raised, the more the merrier. Let's look at a few
examples.

1. The "public" of media company owners is a clique of a few moguls, CEOs
and interested parties I a few huge companies. This is certainly an
influential public indeed.

This public has never been happier. Since Olmert took the Communications
Ministry, life is much simpler. You go to Jerusalem armed with an expert
opinion, send a few lobbyists and Olmert sets up a deal. Whether it's to
block the long-distance market to competition or prevent cellular tariffs
from plunging, nothing stops the tireless minister when it comes to
protecting this public.

2. The "public" of cement company owners. Again this is a small club. In
fact its members also only Nochi Dankner and his partners.

The Nesher cement monopoly has been fighting for years to block dumping
imports of cement from Turkey. It applied pressure to all the Industry
ministers over the years, but all understood that when it comes to a basic
of the construction industry, which cement certainly is, raising prices
would be too harsh a blow.

Import dumping contravenes international law, if it hurts the industry in
the country importing the product. Olmert's decision could be defended on
those grounds, but it apparently no coincidence that the Antitrust Authority
opposed adding a tariff to Turkish cement.

Yet Olmert heeded his public of Nesher and did not quail.

3. The "public" of Salt Industries shareholders which consists mainly of
Dankners.

The State Comptroller bitterly criticized the Israel Land Administration
decision giving the Dankners tremendous building rights on the lands they
own. The comptroller, Eliezer Goldberg, ruled that the process leading to
the deal had been flawed and insufficient. He estimated that the
construction rights the Dankners receiver were worth $90 million. Attorney
general Elyakim Rubinstein wrote to the ILA that the agreement with the
Dankners' company Israel Salt Industries (TASE: SALT ) improperly granted
the company excessive rewards, in contravention of proper administration.

Yet Olmert stood firm, granting the Dankners their rights in defiance of the
attorney general.

4. The "public" of Coca Cola shareholders, or, actually, Mozi Wertheim, who
also owns United Mizrahi Bank (TASE: MZRH) and Keshet broadcasting.

The Finance Ministry ruled that Coca Cola Israel should not receive state
aid to relocate its plant from Bnei Brak to Ashkelon. The attorney general
also objected to the lavish NIS 70 million gift.

But Olmert shrugged off the paper-pushers, government treasurers and lawyers
alike. He lent his support to his public, namely the mayor of Ashkelon, who
wanted the bottling plant, and Wertheim, who wanted the grant.

5. The "public" of huge marketing chains and retailers is a little bigger,
this is true. It includes the major shareholders in Blue Square Israel
(NYSE, TASE: BSI), Supersol (OTC:SSLTF.PK, TASE: SAE), Strauss-Elite (TASE:
ELEI) and Osem Food Industries (TASE: OSEM).

They want Olmert to quash that pesky law forcing them to mark prices on all
products. They want shoppers to have difficulty comparing prices, which
would make it easier to raise them and widen their profits.

Olmert isn't concerned about price rises or diminishing competition, because
his attention is on his public, the powerful owners of the big retail
chains.

There are other publics to whom the minister devotes his attention. Not all
receive mention in the press. His decision to position himself as the
address for anybody not satisfied with rulings by Antitrust Commissioner
Dror Strum attests best of all to which public he is affiliated.

Behind the cases in which Olmert chose to intervene in antitrust decisions,
we may find his desire to succor this or that public smarting under from a
trustbuster slap, a public that wholeheartedly supports competition and
lower prices in somebody else's back yard