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Friday, August 2, 2013

2nd choice for Bank of Israel chief withdraws due to suspicions of sexual harassment

In a new blow for Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid as they tackle Israel’s financial challenges, Bank Hapoalim economist Leo Leiderman, who was named Wednesday as the next Governor of the Bank of Israel, withdrew his candidacy on Friday.
Leiderman was chosen to succeed the well-regarded Stanley Fischer in the post, two days after Jacob Frenkel notified Netanyahu and Lapid Tuesday that he would not be taking over from Fischer as originally intended. Fischer stepped down over a month ago. His acting replacement Karnit Flug resigned on Wednesday when she was passed over for the post.

Leiderman informed Netanyahu and Lapid Friday that he wished to withdraw his candidacy, which was about to be vetted by an appointments panel, having discussed the matter with family members and decided he preferred to continue working in the private sector. He had previously indicated he would take the job.

Netanyahu promptly issued a statement expressing his and Lapid’s “regret” at Leiderman’s decision.

According to Ha’aretz, the turnaround was a consequence of dozens of phone calls which poured into the office of former Supreme Court justice Jacob Turkel, head of the committee charged with vetting the appointment, complaining of past sexual harassment on Leiderman’s part.

One caller reportedly urged the committee to look into Leiderman’s past at Deutsche Bank, from which he resigned abruptly. The caller hinted the reason behind the sudden resignation from the German bank was a sexual harassment case involving Leiderman.

Following Leiderman’s withdrawal, opposition chief Shelly Yachimovich urged Netanyahu and Lapid to visit the house of acting replacement Flug, apologize to her and “implore her to take on the post of Bank of Israel head.”

Earlier reports in Israeli media had indicated Leiderman’s withdrawal from the Bank of Israel nomination was likely at least a partial consequence of media ridicule over his interest in astrology.

On Thursday, Channel 10 reported that Leiderman had consulted regularly with an astrologer, Amos Aharoni, on various matters — a pursuit that caused much merriment in the media. Friday’s Yedioth Ahronoth carried a mocking headline about Leiderman asking how the economy was doing on planet Neptune.

Leiderman said none of his consultations with Aharoni related to professional or financial issues, and that the sessions were nothing more than a “hobby.”

However, an unnamed source told Channel 10 that Leiderman would contact the astrologer “often, at times very often.” He said Aharoni’s advice to Leiderman was based on information such as the client’s date of birth.

The news report said the consultations continued during the years when Leiderman held very senior economic positions, that he sometimes spoke with the astrologer “several times a day,” and even took him with him to various events. The report said economists “raised their eyebrows” at news of the unusual combination of “astrology and numerology.”

Leiderman, a longtime professor at Tel Aviv University, currently serves as the chief economist of Bank Hapoalim, and previously headed the Bank of Israel Research Department. He also served as director and head of the emerging markets economic division at Deutsche Bank in New York and London.

“This is a very emotional day,” he said Wednesday night to reporters at his home, hours after he had been named for the job, declining further comment except to say, “We’ll have lots of opportunities to speak in the future.”

Netanyahu and Lapid came to a decision over the appointment following an afternoon of intensive discussions in which they determined that Leiderman would at this point be the most suitable candidate for the prestigious post, the Prime Minister’s Office said. The appointment would still have been subject to approval by the Appointments Advisory Committee headed by retired Supreme Court Justice Jacob Turkel.

“I thank Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid for their trust in me,” Leiderman said following the announcement. “I’m excited to return to the Bank of Israel, and will work to help Israel’s economy overcome the challenges we face.”

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