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Rabin Power Base Crumbles Under Trade Union Corruption Charges : Israel: Peace process hangs in the balance as prime minister's Labor Party reels and Likud waits in the wings.


JERUSALEM — In the midst of Israel's crucial peace negotiations with the Palestinians and Syria, Prime Minister Yitzhak Rabin's political base is crumbling under charges of corruption high in his Labor Party and in the trade union federation allied with it.

For Rabin, who lost the premiership in 1977 in another, smaller scandal and regained it only three years ago, this could become paralyzing, diverting his attention from the peace negotiations to domestic politics and making him even more cautious in calculating what risks he can take for a settlement.

Within Rabin's Cabinet, the mood is grim. Senior ministers are quoted in Israeli papers as saying that "this is an earthquake, a total collapse--this will bring us down" and that "this is a snowball, threatening to bury all of us under it and bring Likud (the right-wing opposition party) to power."

Nahum Barnea, a leading political commentator, described the unfolding scandal as "a political cluster bomb that could destroy not only the careers (of the former trade union officials) but also of Rabin."

"His ship is breaking up and sinking," Barnea wrote in Yediot Aharonot, the country's biggest newspaper.

As support for Rabin declined, President Ezer Weizman this week renewed his suggestion for a "government of national unity" that would bring Likud into the Cabinet as Labor's partner, but undoubtedly at a cost of slowing, even suspending, Israel's negotiations with the Palestine Liberation Organization and perhaps Syria.

But Likud leader Benjamin Netanyahu, scenting blood, is more interested in early elections, and Likud and other right-wing parties intend to press for dissolution of Parliament in a motion next week.

Although most commentators focused on the long-term question of whether the coalition government will be forced into early elections that the Labor Party would lose, some warn that Rabin's very attempt to survive the crisis will inevitably slow and weaken his pursuit of peace with Israel's Arab neighbors.

"He's looking over his shoulder, seeing whether Likud is gaining on him or whether he can maneuver a bit more this way or that with Syria, with the PLO," a former Rabin adviser said. "All his energy is going into an escape from this crisis. He keeps remembering how Labor lost power in 1977. He was depressed before, now he's worse. You can't negotiate that way."

Rabin, speaking to the Labor Party's executive bureau, sought to defend his leadership.

"The party is under an assault, which is often baseless," he said. "I read, for instance, that I am depressed--something that I hadn't noticed myself.

"There are always ups and downs in political life, and sometimes en route to the target soldiers have to put on their helmets," Rabin continued, seeking to rally supporters. "We in Labor need to remain cool and composed, especially as it is hard to contend with an attack in the press in which unfounded rumors are circulated."

Rather than hold a regular meeting of Labor Party ministers last week, Rabin met instead with Haim Ramon, a reformer who broke from the party last year to win election as secretary general of the Histadrut, Israel's trade union federation, the long-rumored corruption of which now threatens the government.

"The ministers could contribute nothing but mutual recriminations and more acrimony to what is already a crisis," a Rabin aide said dismissively. "They would have made a bad situation worse. The discussion would have strengthened the link in the public's mind between Histadrut corruption and the Labor Party leadership. Ramon, however, could help constructively."

Police Minister Moshe Shahal told Parliament that the intensive investigation appears likely to lead soon to indictments of a number of past Histadrut leaders on charges of fraud, forgery, embezzlement and other crimes.

According to Israeli press accounts, the Histadrut officials used union funds, which were raised by mandatory, tax-like dues paid by almost all Israeli workers, to finance their own and their friends' political activities.

Much was ordinary campaign organizing, but some reportedly was "dirty tricks," including hiring private investigators and paying for wiretaps to get materials discrediting Ramon.

The amounts of money siphoned from the Histadrut into Labor Party politics are not really known, but speculation that began with amounts like $200,000 now reaches up to $10 million, a huge sum in Israeli politics.

Those involved, according to the daily accounts in the Israeli press, may include Transport Minister Yisrael Kessar, a deputy trade minister, several former top Histadrut officials and as many as five Labor Party members of the Knesset, Israel's Parliament.

Kessar, a former Histadrut secretary general who sought the leadership of the Labor Party in 1992 but was defeated by Rabin, has rejected all charges of wrongdoing, as have others.

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