Israeli Court Delays Posting Envoy to U.S. Over Tax Charges

In a further embarrassment to the government of Prime Minister Yitzhak Rabin, Israel’s Supreme Court on Tuesday delayed the appointment of the new Israeli ambassador to the United States until prosecutors have examined charges of tax evasion against him.

The order temporarily barring Itamar Rabinovich, former rector of Tel Aviv University, from taking up his post in Washington followed charges by the state comptroller Monday that Rabin’s Labor Party had accepted illegal contributions amounting to more than $100,000 in last year’s parliamentary elections.

The court order was sought by a member of Parliament from the right-wing opposition Tsomet Party; Israeli political commentators called the action a protest both against Israel’s negotiations with its Arab neighbors and against Rabinovich, who has been Israel’s chief negotiator in peace talks with Syria.

“Discredit Rabinovich, discredit the peace talks,” a Rabin adviser said angrily. “Our opponents are trying to leave the impression that we play fast and loose and consequently would sell out the country. It’s nonsense--worse than that actually--but Rabinovich is now seen as less than honest.”

Rabinovich, a Middle East specialist, disclosed this week that he paid a $14,000 fine to settle a dispute with Israeli tax authorities over a $26,000 bank account he had while teaching in the United States and had not immediately closed when he returned home as required by Israeli law.

Last autumn, in the midst of crucial talks between Israel and Syria in Washington, anonymous tipsters wrote Israeli tax authorities, opposition politicians and the press, charging Rabinovich with violating Israeli currency controls and evading taxes.

To close the case, his lawyer Pinhas Rubin said, Rabinovich paid the fine but considered the allegation “another expression of attempts to harass him and harm his functioning in the peace negotiations.”

“If it were not for his role in the peace talks, I would advise him not to bother to respond,” Rubin added, contending that Israel’s right to tax the salaries earned by its citizens abroad is not clear. Rabinovich has refused to comment directly on the case.

The matter is particularly sensitive for Rabin because his first government fell in 1977 in a scandal over U.S. bank accounts worth more than $20,000 that he and his wife, Leah, retained--in violation of Israeli law--after he finished his tour as Israeli ambassador in Washington.

Rabinovich, who quickly won Rabin’s confidence last autumn for his knowledge of past Arab-Israeli negotiations, as well as his intelligence and urbanity, had planned to arrive in Washington on Feb. 1 to replace Zalman Shoval, the current Israeli ambassador; his appointment had been approved by the Cabinet, despite the allegations against him.

“If the law enables one to pay a fine, then it is legal and not a crime,” Foreign Minister Shimon Peres said over the weekend in Rabinovich’s defense. “There is no reason why he should not be Israel’s ambassador to Washington.”