Prime Minister Menahem Begin's personal intervention on behalf of a former banker sentenced more than two years ago for misappropriating $47 million is rapidly snowballing into the first domestic scandal of Israel's new government.
The 12-year jail sentence of the banker, Yehoshua Benzion, 52, was commuted two days ago by Israel's president, Ephraim Katzir, on Begin's recommendation in his capacity as acting minister of justice.
He based his plea to the president on the finding of two of Benzion's personal physicians, who argued that their client is a very sick man and that jail conditions might endanger his life.
The prime minister's initiative immediately drew fire from the Labor Party opposition, which charged that he was motivated by Benzion's political leanings and contributions to Rightist causes.
The Labor Party announced that it will seek a special session of the Knesset, Israel's Parliament, to discuss the Benzion case, Labor speakers say that Benzion won his release because he contributed heavily to Gush Emunim, the nationalist religious group advocating Jewish settlement in the occupied territories.
Begin's action was also criticized by jurists, reportedly including Supreme Court justices, as political intervention in the due process of law.
The former justice minister, Haim Zadok, who had repeatedly turned down requests to recommend Benzion's release, said tonight in a television interview that Begin's move constitutes infringement of the principle of equality before the law.
Former Minister of Police Shlomo Hillel revealed in a radio interview that Begin, while still eader of the opposition, had intervened on Benzion's behalf on several occasions. "In view of his personal interest in the case in the past, Begin should have disqualified himself from making any recommendation to the president on the prisoner's release," Hillel said.
Public criticism of Benzion's release intensified yesterday after Communist members of the Knesset published a confidential medical report that concluded that while Benzion suffers from a lung and heart condition, his health is not so bad that treatment could not be given in jail. The report was submitted last month to the Statutory Committee on Medical Releases which makes recommendations to the minister of police.
Zadok said tonight that Benzion's lawyers had made 13 pleas for medical release up to November 1976.
According to Israeli law, a prisoner can be released from jail if his sentence is commuted by the president, who acts upon the recommendation of the minister of justice, or he can be released by the minister of police, or he can be released by the minister of police if a statutory committee finds that chronic illness dictates such action on medical grounds.
In the Benzion case, critics argue, Begin, as acting minister of justice, interceded on medical grounds despite the fact that the law had created a totally different procedure for such cases.
Benzion was the managing director of the Israel-British Bank when it collapsed in July 1974. When the bank was taken over by the Bank of Israel, the country's central bank, it became apparent that Benzion, whose family had control of the defunct bank's stock, used $47 million of its funds as collateral given to Swiss banks for loans taken in the name of companies registered in Vaduz.
The Israeli Supreme Court upheld the sentence meted out by a lower court, which found Benzion guilty of misappropriating the money.
On his release from jail, Benzion announced that he has new evidence to prove his innocence, and will demand a new trial to clear his name.
Several editorials in Israeli newspapers today predicted that the case will hurt the popular image of the Begin government, which had campaigned on a law-and-order platform accusing the previous government of political corruption. Prime Minister Begin himself, in an unprecedented move, issued a statement yesterday justifying his action, saying: "Only a person whose motives are question-able could object to my initiative in the Benzion case."
He emphasized that Benzion is a very sick man, whose life expectancy, according to several noted doctors, is short. Begin mentioned several Labor personalities who recently appealed to him to intervene on Benzion's behalf. He also revealed that Benzion had in the past turned down Begin's request to contribute money to the Likud party.
Obersevers say that one aspect of the Benzion case that may prove detrimental to Begin is that the U.S.-born Benzion is considered a wealthy Western Jew, while many poor jews from Arab countries-a segment of the population that voted heavily for Likud - do not receive any special treatment in Israel's crowded jails.