In the cities and towns of Israel last week, the people had reason to rejoice. It was Passover week, when families celebrate the flight from Egypt more than 3,000 years ago. The populace also had a grand secular occasion to celebrate: the upset victory (78 to 77) of a Tel Aviv basketball team over Italy in the European championship at Belgrade.
Once the game was finished, however, those who stayed tuned to Israeli radio and TV heard a shocking message. Premier Yitzhak Rabin, 55, had waited for game's end to take to the air waves and declare another stunning upset—his own. Rabin announced to the country that he would not lead his ruling Labor Party in the May 17 elections —and that he wanted to resign immediately. His reason: he and his wife Leah had held two U.S. bank accounts in violation of Israeli law, and their value was far higher than the couple had earlier admitted.
Little Choice. Rabin had little choice in resigning, since he was already under police investigation for violation of Israel's foreign currency laws. His stepping down, said a grim Rabin, was a "sad end" to a three-year political stewardship. Finance Minister Yehoshua Rabinowitz had another phrase for it: "the biggest political crisis in the history of the state of Israel."
The seeds of Rabin's humiliating downfall had been germinating for weeks, ever since the Tel Aviv daily newspaper Ha'aretz reported that the Premier's wife had held a bank account in Washington for the past four years (TIME, March 28). It is illegal for Israeli citizens to keep money abroad without special permission, and Mrs. Rabin had not sought such permission. She provided an explanation that sounded convincing enough at the time: the account at the National Bank of Washington, which amounted to about $2,000, was an old one, dating from the years (1968-73) when Rabin served as Israel's Ambassador to the U.S.
Though his wife was in charge of family finances, Rabin was co-signer on the account, and. he conceded, "the responsibility was mine as much as hers." A lawyer for the couple also said that the Rabins had been unaware that a foreign account such as theirs had to be closed within a reasonable time after their return to Israel.
The Rabins' apparent candor and the small amount of money involved made the incident seem forgivable to the Israeli public. The feeling was that Rabin would escape with a substantial fine—but with his career intact.
But the Rabins had not told the whole story. As Finance Ministry officials went over the bank records, they discovered a second account, containing nearly $6,000. In all, the Rabins had $18,700 in the two accounts when they left Washington, and they had transferred only some $10,500 back home. Israel's Attorney General Aharon Barak decided that the matter was serious enough to justify calling in the state prosecutor to investigate further. He also decided that Mrs. Rabin bears responsibility for the accounts; if found guilty in court, she could face up to three years in jail or a heavy fine. Confronted with the evidence on the eve of an election campaign, Labor Party members began demanding Rabin's resignation.