Israeli minister faces graft charges

ARYEH DERI is not about to throw in the towel. For three years he has brazened out the investigation into his business dealings. He refused to co-operate with the inquiry or to resign his posts as Interior Minister and leader of Shas, the small religious party in coalition with the Labour Party of the Prime Minister, Yitzhak Rabin, writes Charles Richards.

Now the attorney-general has filed indictments against him on nine counts of fraud, corruption and breach of trust. But experience suggests that it will not be until all legal proceedings are exhausted that the affairs will begin to have political implications for the governing coalition.

The charges relate to land deals, and questionable ownership of two penthouses. A second raft of charges against three of Rabbi Deri's close associates is also due to be filed.

Rabbi Deri, who at 34 might have expected a long political career, was made Interior Minister in 1988, when Shas was in coalition with the nationalist Likud party. The ministry has always been controlled by religious parties because it determines the qualifications for a Jew to record his religion on his identity card.

Rabbi Deri has several different courses of action before him. He can take up the attorney-general's offer of a special hearing in three weeks' time. This is an option which public figures can exercise to try to get charges dropped on the grounds that they are politically motivated. Or he can fight to retain his parliamentary immunity before the Knesset.

Typically, some Shas members have said that the proceedings against Rabbi Deri are a racially orchestrated campaign against the largely Sephardic party. It is a party that has thrived on grievance and a sense of victimisation by the Ashkenazi establishment. Rabbi Deri has said he will not resign until he appears before a court. If he is forced to resign, this could threaten the coalition, since Mr Rabin needs the six seats Shas brings. Mr Rabin managed to avert an earlier threatened coalition collapse over Shas' objection to the outspoken Shulamit Aloni as Education Minister.