Tzippi Livni is positioned to be the next Prime Minister of Israel. The ruling party, Kadima, will hold a primary for its leadership during September. Current PM Olmert has already announced that he will not offer himself as a candidate during the primary. This leaves the way open for Livni to assume leadership of the party and, with it, the position of Prime Minister of the State of Israel. Although Livni will have some opposition, she is currently the firm favourite to win the primary. But who is Tzippi Livni, and what qualifies her to be Prime Minister of Israel?
I guess that this raises the question as to what qualifies anybody to be the Prime Minister. In most cases, they will not have had previous Prime Ministerial experience. If they do come with experience, chances are that they were not exactly successful the first time around. So how does it come to pass that a person who, a year ago would not have been thought of in the context of Prime Minister, is suddenly the leading candidate for the job?
Both Tzippi's parents were prominent members of the Irgun, the pre-state underground movement. She served as a lieutenant in the Israel Defence Forces and worked for the Mossad for a time. She qualified as a lawyer and has 10 years experience in public and commercial law. She has served in the Knesset since 1999 and has held no less than 5 Ministerial posts including her current job as Foreign Minister. So, she seems as well qualified as anybody for the role of Prime Minister. The one thing that seems to set her apart from her competitors in the race is that she has a track record of being honest where others have been involved in one scandal or another. She goes against the trend of Israeli politics where scandals and inappropriate behaviour almost seem to be a pre-condition to be a politician in Israel.
Although Livni has a seemingly envious track record having served in a number of varied and noteworthy positions, there is a question as to how successful she has been in her previous jobs. Besides keeping her nose out of trouble, what significant achievements can she point to? It is difficult to measure the success or failure of a Foreign Minister or a Justice Minister. Did she hit her sales target year after year? Did she strike any remarkable deals for Israel Ltd.? Not to my knowledge. Perhaps the fact that she was not the subject of any scandals or dodgy deals is success in itself in our political world. In my view, this is all she has going for her. Personally, I would prefer a Prime Minister who is known for positive achievements rather than for not having any black marks against her name.
This view of Tzippi is reinforced when I recall some of my personal dealings with her during the mid 1990’s. At that time, she was Director-General of the Government Companies’ Authority. This is a rather grand title for somebody who had the job of acting as the shareholder representative on behalf of the government in companies which the government owned or held a shareholding in. My experiences with her relate to Bezeq, the incumbent telecommunications operator in Israel.
At that time, I worked for London-based telecommunications operator, Cable & Wireless. C&W’s Chairman, Lord Young, was a personal friend of Israeli PM Rabin (of blessed memory) and received a personal approach from Rabin regarding the government’s intended privatisation of Bezeq. C&W’s participation in the privatisation process would have generated much-wanted interest in Bezeq’s privatisation. Lord Young was eager to be a player in the peace process that was unfolding in the wake of the Oslo accords, and envisaged a role for C&W in bringing together telecommunications operators from Israel, Jordan, Lebanon and Syria in addition to being involved in the establishment of an operator for the emerging Palestinian Authority area. Young had the vision of a giant multi-country telecommunications infrastructure across all of the Eastern Mediterranean countries that would be run by a single operator. In addition, Young had a sharp eye for a good deal and he thought that Bezeq would be a great investment for C&W. He did not have to be invited twice by the Prime Minister. Within a very short space of time, C&W acquired a substantial holding in Bezeq via the small float of Bezeq shares that were traded on the Tel Aviv Stock Exchange. C&W initially purchased a 5% stake in Bezeq, which quickly grew to 7% and entitled C&W to appoint a representative to the Bezeq Board of Directors. Thereafter the investment was increased to 10% and was threatening 14%, at which point a further Director was to have been appointed. Despite Rabin’s enthusiasm to involve C&W in the privatisation process, I am not sure that he anticipated that Young would act so quickly and so decisively.
Behind the scenes lurked Tzippi Livni and her partner-in-crime, Limor Livnat in her role as Minister of Communications. The ladies were less than pleased with C&W’s bid for Bezeq. They had other plans for Bezeq’s privatisation. Whilst they were eager to attract the interest of C&W and other large international telecommunications operators, they had hoped to offer their bride, Bezeq, in a beauty contest to the highest bidder. They envisaged C&W, AT&T and other wealthy suitors paying top dollar to ensure that they would be the chosen groom in the face of stiff competition to win the bride’s hand. C&W’s holding of 10% meant that other suitors were discouraged from participation due to C&W’s seemingly preferred position. It also meant that C&W had access to all information that was tabled at the meetings of the Board of Directors via its representative on the Board. The shutters went down and the ladies declared war on C&W, which had acted “unfairly” in their bridal auction.
When Tzippi realised she had been outfoxed, she resorted to political tactics to try to restore the commercial equilibrium. At C&W, we woke up one morning to discover that a law had been passed through the Knesset preventing C&W from taking up a second position on the Board of Directors if it increased its holding to 14%. This was one of a series of political measures that were taken by Limor and Tzippi in order to limit C&W commercially. C&W’s decisive action drew an angry response which far overstepped the commercial limits that C&W was dealing with. Many angry meetings and phone calls were conducted accompanied by the exchange of legal letters. There were also a number of personal incidents involving the ladies and members of C&W's senior management that did not leave a positive impression of the members of the Israeli government. The only benefit to the Israeli economy of this exercise were the substantial legal bills that were run up by both sides. In the middle of this process, Tzippi was replaced at the Government Companies’ Authority and left the unruly mess to her successor to sort out.
As a result of the war that was waged on C&W, the opportunity to attract other possible bidders was completely lost. C&W, which had once been interested in coming to an agreement with the government to buy a controlling stake in Bezeq, lost interest and sold the 20% stake that it ultimately controlled at a substantial profit. The government was left with Bezeq on its books until some 8 years later when the controlling interest was sold to Apax Partners for far less than what C&W had been prepared to pay.
So,what did this ordeal teach me about Tzippi Livni? She is certainly a very determined lady. When you try to take her in a direction that is not where she wishes to go, she will use every trick in the book (and some that are not in the book) to scupper your plans. She appears to be better at using political tactics than commercial expertise. When the commercial going got tough, she resorted to the Knesset to save her plans. Perhaps this demonstrates some level of creative thinking. At the time, it was regarded as dirty play. She is prepared to cut her nose to spite her face. Instead of securing a tidy sum from C&W to contribute to the government’s coffers, she preferred to ensure that C&W went home empty-handed. The fact that the government lost an opportunity in the process did not seem to bother her very much. Most telling of all for me is the fact that her efforts and political tactics did not achieve her ultimate objective to privatise Bezeq.
Whilst a few positive points of her character came to the fore, I consider her efforts in this regard as a failure. She may have won a few battles, but the war was lost. I certainly hope that she will do better when sitting in the Prime Minister's seat.
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