A hitch appeared in the expected appointment of Jacob Frenkel as the next governor of the Bank of Israel this week.

The committee for approving senior civil service appointments, chaired by Emeritus Supreme Court Justice Jacob Turkel, will meet on Sunday to deliberate on the matter. It has not yet been decided whether the meeting will be a discussion among the four members to determine their course of action, or if the committee will hold a video or telephone call with Frenkel, who is currently in the United States.

The committee requested last week that Frenkel provide an explanation regarding an incident that occurred almost decade ago, and why he did not report it to the vetting committee. The incident in question took place at Hong Kong's international airport, where Frenkel was suspected of stealing from a duty-free shop.

Frenkel passed the committee his version of events on Friday. According to him, "The local authorities in Hong Kong reached the conclusion that this was an unfortunate misunderstanding and expressed the wish that I refrain from compensation claims." The Turkel Committee formally announced that it will "meet in the coming days for further deliberation," including on other inquiries that have been submitted in recent days to the committee.

Committee sources, having finally seen Frenkel's account, are playing down the incident's impact on the nomination pending further review of additional records and eyewitness accounts.

On Friday afternoon, Frenkel responded to Haaretz's report with a statement similar to the version he gave the committee, although he did not refer to the details of the incident. "This is an incident which took place seven years ago, and which ended in nothing," Frenkel said. "Local authorities in Hong Kong reached the conclusion that this was an unfortunate misunderstanding, and expressed their apology and their appreciation that I did not sue them for compensation. I expect to take office as Governor of the Bank of Israel in early October, after my appointment is approved by the Turkel Committee and the Israeli government. I see this as a national duty for the benefit of the economy and the state."

Frenkel is currently abroad and is expected to arrive in Israel next week. Prime Minister Benjamin Netanyahu, who recommended Frenkel's appointment, was unaware of the Hong Kong incident and heard of it only following Haaretz's inquiries to the appointments committee. Likewise, Finance Minister Yair Lapid who was partner to Netanyahu's decision to advance Frenkel's candidacy and called Frenkel, a friend and a neighbor, was unaware of the incident until this week.

The severity of the incident and its effect on Frenkel's potential appointment will depend on the clarification of the details surrounding it. If it was a small misunderstanding that Frenkel thought in good faith didn't need to be reported, he will be able to continue on his path toward appointment. But if it appears that the involvement of local police and a lawyer who arranged for Frenkel's departure from Hong Kong reached the level of an investigation that would require a report, the committee is likely to nix Frenkel's candidacy due to his concealment of the event. Attorney General Yehuda Weinstein will also be asked to evaluate the case and decide if he would be able to defend Frenkel's appointment in the face of any petitions to the High Court of Justice against it.

Until the appointment of a permanent Bank of Israel governor, the position is being filled on an acting basis by Deputy Governor Karnit Flug.

Frenkel appeared before the appointments committee last month after filling out the candidate's form, but did not mention the Hong Kong incident. The committee, which was expected to approve Frenkel's suitability as Bank of Israel governor this week, consequently has delayed its decision until he appears again before the committee.

Haaretz agreed to the appointment committee's request from the beginning of the week to hold off publicizing the case while the committee was still preparing to discuss it.

The committee takes a hit

The appointments committee's reputation took a hit three years ago when it approved the suitability of Maj. Gen. Yoav Galant to serve as IDF chief of staff following his nomination by Netanyahu and then Defense Minister Ehud Barak. The committee did not have the proper tools at the time to conduct a thorough examination of the claims aired against Galant at that time regarding his alleged illegal appropriation of public land next to his house in the community of Amikam.

In that case, despite the committee's approval of Galant and the subsequent government approval of the appointment, Galant's candidacy for IDF chief of staff was nixed following a petition to the High Court of Justice and opinion issued by Weinstein and then State Comptroller Micha Lindenstrauss raising the prospect of legal difficulties in defending the appointment. Three of the committee's four members currently on the appointments committee were also serving on the committee at the time of the Galant scandal.

At the beginning of the week, Turkel was surprised to hear that in 2006 Frenkel had been accused of stealing an item at the airport in Hong Kong. The incident was reported at the time to the Foreign Ministry, but the ministry could not find any documentation of it this week. Following Haaretz's inquiry addressed to Turkel, the Foreign Ministry officials who dealt with the matter were asked to provide their own accounts of the event, namely Ambassador to Romania Dan Ben-Eliezer, who was then consul general in Hong Kong, and the consul and head of administration at Israel's embassy in Bangkok, Eli Gil, who was then Ben-Eliezer's deputy consul. Amikam Levy has been serving as Israel's consul general in Hong Kong since Ben-Eliezer completed his term at that post.

Foreign Ministry director general Rafi Barak instructed the ministry's legal counsel to gather together the material from the files at Foreign Ministry's headquarters, the consulate in Hong Kong and the diplomats' testimonies and transfer them to the appointments committee. The Foreign Ministry did not originally volunteer the information it had to the committee after Netanyahu, who also is serving as acting foreign minister, publicly sought Frenkel's appointment to the Bank of Israel. The material regarding the incident was given by the Foreign Ministry to the appointments committee only following Haaretz's inquiry.

Based on the information received by Haaretz, the incident at the airport in Hong Kong occurred when Frenkel visited a shop before his scheduled takeoff from airport. As he was leaving the store, a bottle of cologne that appeared to have not been paid for was found among Frenkel's belongings. A security guard then apprehended Frenkel and prevented him from boarding his flight, with the event captured on security cameras. Frenkel protested his treatment, presented his Israeli passport, stated that he was a former governor of the Bank of Israel and claimed there had been some misunderstanding. Frenkel held a valid diplomatic passport during the '90s, when he served as Bank of Israel governor, but was permitted to renew it after finishing his term at the bank or use it at least as a means of identification, if not for crossing international borders.

Airport police called the Israeli consulate in Hong Kong to verify Frenkel's identity. Consul general Ben-Eliezer and his deputy Gil handled the matter and treated Frenkel as a VIP even though the incident occurred six years after he finished his term at the Bank of Israel. The two diplomats reported the incident to the Foreign Ministry's situation room in Jerusalem. Today, there is only a foggy recollection of the incident in the situation room, where it was not recorded.

The Israeli diplomats put Frenkel in touch with a well-known local lawyer, Sharon Ser, who also served as president of the Reform synagogue in Hong Kong. Ser typically handles family law cases, but is known for her widespread connections to the political and executive elite in Hong Kong. She arranged for Frenkel's detention and investigation not to take place in a police facility but in a hotel at the airport. After being detained for close to 24 hours, Frenkel was permitted to leave Hong Kong by plane. No indictment was filed against him. The status of the police file, whether it is still open or was closed, is unknown.

Ser did not respond to Haaretz requests for comment in either writing or by telephone. Ben-Eliezer responded by directing all requests for comment to Foreign Ministry spokesman Yigal Palmor, as did current Consul General Amikam Levy.