To: the President.

From: the National Security Advisor.

Top Secret.

I hereby submit to you, Mr. President, the report of the secret task force for reforming Israel, parallel to the task force working on the reform of the Palestinian Authority.

The faults of the Israeli system are known to all: an autocratic one-man rule by a leader surrounded by cronies and yes-men, a leader who is a chronic liar whose every word is untrustworthy, corruption that penetrates every echelon of government, democratic institutions which serve only as window-dressing, the lack of a constitution, the absence of a real opposition, a multi-party system that is just a pretense, media that are fully mobilized in the service of the government.

This system is unable to move towards peace. Since you, Mr. President, have determined that peace is in the basic national interest of the United States, we must use our power in order to bring about a thorough reform.

Following are some of the findings of the task force:

One-man rule: In theory, Israel is governed by a democratic leadership with decentralized authorities and a system of checks and balances. In fact, the situation is quite different.

By a sophisticated labyrinth of make-belief institutions – government, cabinet, inner cabinet, "kitchen" "kitchenette" – a situation has been created that allows Mr. Sharon to decide and execute anything he wants.

In practice, Mr. Sharon acts through a small group of family members and cronies who have been devoted to him for decades, but who have never been elected. (Conspicuous among them is his son Omri and Messrs. Weisglas and Genger.) Members of the official cabinet have no influence whatsoever. Messrs. Peres and Ben-Eliezer, for example, serve only as rubber-stamps.

Corruption: The existing Israeli system is based on general, systematic and institutionalized corruption.

Large chunks of the national budget are transferred – both openly and secretly – as bribes to religious and other parties who keep him in power, and parts of these go into the pockets of their functionaries. These huge sums are stolen from the general public at a time of growing unemployment and lack of funds for the infrastructure, when there is even no money to assure a decent living to invalids, the elderly, the unemployed and to handicapped children, decent hospitalization for the sick, not to mention decent living conditions for prisoners, who are kept in barbarous conditions.

Election campaigns are tainted by general corruption. Leading candidates receive secretly and illegally huge amounts of money from local and foreign interest groups, which expect, of course, to be repaid many times over once their candidate comes to power. Every campaign is followed by a long train of criminal indictments, which are but the tip of the iceberg.

The Prime Minister himself, who is the owner of the biggest private farm in Israel, is involved in directing agricultural policy, including the price of water and the regulation of agricultural imports,

Much as in the Palestinian Authority, almost all the leading positions in the government and private services and corporations are handed out to cronies of the Prime Minister and members of the central committee (numbering thousands) of the governing party, most of them without elementary qualifications and talent. All the previous governments did the same. Every ministry is, of course, staffed and stuffed with cronies of the minister, and so are local authorities etc. In this way, a huge parasitical apparatus has been created at the expense of ordinary taxpayers.

In addition, taxpayers have to carry the burden of a large sector of people called "Haredim" (God-fearing) who do not work or pay taxes (nor do they serve in the army, thereby increasing the compulsory service and reserve duties of all the others.) Many settlers are also flourishing at the expense of the general public.

The gap between rich and poor in Israel is bigger than in any Western country, a fact that turns Israel into a Third World country.

Mendacity: Mr. Sharon is a certified liar. Already at the beginning of Mr. Sharon's career, the then Prime Minister, Mr. Ben-Gurion, defined him as a habitual liar. On January 29, 1960, Mr. Ben-Gurion wrote about him in his diary: "If he would wean himself from the habit of not speaking the truth…he would be an exemplary military leader." Two years earlier, when Mr. Sharon was promoted to the rank of Colonel, Mr. Ben-Gurion asked him: "Have you stopped saying the untruth?"

The mendacity is not a personal trait of Mr. Sharon only, but a method deeply imbedded in the Israeli leadership. A predecessor of Mr. Sharon, former Prime Minister Shamir, has publicly declared that lying for the state is a virtue.

One could cite innumerable instances of this official trait. Mr. Sharon's immediate predecessor, Mr. Barak, for example, has spread a mendacious account of the Camp Davis summit conference (Summer 2000), in order to put the blame for the failure on Mr. Arafat. Since then, all the Israeli media repeat this legend daily, in spite of the fact that most leading commentators know the truth.

The same goes for the Oslo agreements. The Israeli leadership, with the help of the media, hides the fact that most of the violations have come from the Israeli side (they did not implement the third troops' deployment, did not open the four agreed "safe passages" between Gaza and the West Bank, they have embezzled the tax and customs money collected for the Palestinian Authority, refused to negotiate in good faith about Jerusalem, settlements and refugees, as stipulated in the agreements, etc.)

It will be remembered that even Mr. Rabin announced that "there are no sacred dates", thereby relieving himself of the duty to fulfil any obligation at the agreed time.

It should be mentioned that at the time when the Israeli government has pretended to stop settlement activity, this activity is in fact continuing at a frantic pace, as discovered by our satellites.

This, Mr. President, is a summary of the report. The task force proposes suspending our economic and military aid to Israel until a thorough reform has been undertaken, and to appoint a team of monitors to oversee the results. Israel, like the Palestinians, should also be forced to adopt a Constitution.

Yours respectfully,

The Advisor.