In 1976, HaOlam HaZeh began publishing investigations regarding illegitimate financial transactions concerning senior members of the labor movement and the party funds.
The cabinet decided, on September 5, to appoint Yadlin, former head of the Histadrut's economic enterprises, governor of the Bank of Israel to succeed Moshe Sanbar on November 1.
[2] After a month of intensive police investigation, Yadlin was detained for interrogation on suspicion of having accepted bribes and undercover commissions in transactions affecting Kupat Holim.
On October 24 the cabinet resolved, without prejudging the charges against Yadlin, that it could no longer delay the appointment, and named Director-General of the Treasury Arnon Gafni as governor of the Bank of Israel.
[2] There was considerable criticism of the daily publicity by the press to unproven rumors of charges against Yadlin, which were believed to have been fed by unauthorized disclosures from police sources.
[2] Towards the upcoming elections, Shimon Peres and his supporters had jumped on the Yadlin scandal as proof of Rabin's poor judgment in making appointments.