By
Michael Rochvarger and
Sharon Shpurer |
Apr. 8,
2014 | 4:30 AM In 2002, at the height of one of the most serious
economic crises in Israeli history, the governor of the
Bank of Israel, David Klein, managed to create anxiety
in the country's banking system. A carelessly phrased answer
to a reporter sent a warning that an Israeli bank might
collapse. Klein refused to say which one, but in the markets
they guessed that the bank most in danger was Israel
Discount Bank – and its shares plummeted.
Klein regrets that slip even today, since his response
could very well have caused customers to rush out and
withdraw their funds, causing a run on the bank that may
have caused it to fold – and possibly even leading to a
system-wide collapse of other banks, financial institutions
and companies. There could have been a sort of
self-fulfilling prophesy.
That never happened: Discount did not fall, and the
public calmed down. But such a statement by a senior
economic and government figure should be uttered only the
most exceptional circumstances.
The whole incident did not, however, bother then Minister
of Industry, Trade and Labor
Ehud Olmert. Indeed, a year later told Haaretz: “If the
deal between the Dankner family’s Israel Salt Industries
Ltd. and the Israel Lands Administration is not approved by
the ILA council [which determines policy] – Bank Leumi could
collapse.”
Klein said what he did because the enormous exposure of
Discount's billions of shekels loans to large corporations
could bring the bank down. In Olmert’s case, his statement
was completely baseless. Leumi had a 1.4 billion shekels
($400,000,000) exposure to the deal. Even if it would have
lost that entire amount, it was only 10% of the bank’s
equity at the time. Serious damage but not enough to bring
about its demise.
But that wasn’t the point. It is more relevant to ask why
the industry and trade minister was interested in the first
place in the Dankners' property, and what the connection was
between it and one of Israel’s two largest banks. We must
also remember that at the time Olmert served as chairman of
the ILA’s council. What was at issue was a deal in which the
ILA was asking for approval for a rezoning of the Dankners'
property in Eilat in the south and Atlit near Haifa, from
agricultural to residential land.
For the Dankners, the significance of the ILA's approval
was enormous, almost existential. Back then they already
partially controlled Bank Hapoalim, but they had achieved
that by means of an enormous amount of credit – 1.4 billion
shekels they received from Bank Leumi. An economic crisis at
the time sent shares in Hapoalim plunging, so the value of
the bank shares the Dankners owned dropped below the
1.4-billion shekels they owed; they feared Leumi would
demand immediate repayment.
This is where guarantees for the loan entered the picture
– the very same lands owned by the Salt Industries then
under discussion at the ILA. Its approval for the rezoning
would allow the Dankners to increase the value of their
land, on paper, to 1 billion shekels.
At an ILA council meeting, Olmert told the members he was
speaking from his heart – and asked them to green light the
deal.
This was not the only time he acted in such a strange, or
even suspicious, fashion. He went as far as saying certain
things that could have endangered the Israeli economy.
Olmert seems to have used any tactics available back then
to serve the Dankners' interests. He was never charged with
anything in the Salt Industries affair, but the story does
raise questions about his involvement in the deal – which
was finally revoked not long ago, and as a result of which
Dan Dankner, former chairman of Bank Hapoalim, was convicted
of giving a 1.3-million shekel bribe to Meir Rabin, the
brother-in-law of ILA head Yaakov Efrati; Efrati himself,
however, was acquitted of taking a bribe on the grounds of
reasonable doubt.
Bank Leumi sale tender
Today we can look back and examine with heightened
concern the other scandals in which former Prime Minister
Olmert was involved, and not just the most famous of them –
i.e., the Talansky cash-envelope and Investment Center
affairs.
One of the lesser-known affairs happened in 2005 when
Olmert was finance minister in Ariel Sharon’s cabinet. The
police investigated a suspicion then that Olmert acted to
sell the state’s shares in Bank Leumi to two Jewish
businessmen who were close to him: Frank Lowy and S. Daniel
Abraham, both from Australia, who headed a group of
investors bidding in the tender. And if all that were not
enough, the lawyer representing the group was attorney Yosef
Gross, whose daughter is married to Olmert’s son.
Olmert never informed the officials in his ministry of
these connections with the group of investors.
The affair never made it to court, as State Prosecutor
Moshe Lador decided to close the case. Lador said the police
never found an adequate basis to prove that Olmert
influenced the tender intentionally in favor of his friends.
While the High Court of Justice rejected a petition asking
them to order Lador to indict Olmert, the bench did
criticize Olmert’s actions.
“The picture painted by the evidence is worrying.
Olmert’s actions are not proper, and there is more than just
bad taste in evidence here,” the justices wrote.
A few years later it turned out that the very same
Abraham – on whose behalf Olmert was suspected of, but never
charged with, fixing the Leumi tender – had helped pay legal
fees for Olmert's longtime bureau chief Shula Zaken’s
defense; she has also been convicted in the Holyland case.
One person who never stopped warning about the tender
being fixed was Yaron Zelekha, then accountant general in
the Finance Ministry, who also served as a key witness.
Zelekha was constantly accused of seeing shadows everywhere,
but did not hesitate to come out against his boss.
Zelekha may be quite well-off today and sometimes he even
advises tycoons, but unlike many of his colleagues from the
treasury, he was never sought after by the same tycoons to
run their businesses – and never to serve as a board
chairman. No one wants a “troublemaker,” and appointment of
someone like Zelekha could be seen as a message to senior
officials that even if they don’t do what the tycoons want –
they can still find a good job. That is a message that could
damage the entire financial system of the country.
In his book Zelekha later wrote that he participated in a
number of meetings – along with other senior finance
officials, including governor of the Bank of Israel Stanley
Fischer – where Olmert tried to fix the Leumi tender in
favor of his friends.
“At one meeting, two weeks after the final date to submit
bids for the tender, Olmert sat with us at a meeting in
which he read from a letter that described changes in the
tender that would benefit Lowy’s group. This, of course, was
something he was forbidden to do, since it violated the
conditions that had been set forth.
“The letter was at some stage in Fischer’s hands. I
grabbed it from him and saw it was actually a fax that
Olmert had received from Lowy’s group. Afterward, Fischer
told the police he didn’t remember any such thing. Like
three monkeys, everyone sat there: No one understood but
they were supporting the changes Olmert wanted to make, even
though they knew that at the time of the announcement of the
winner of the tender, Olmert was planning on traveling with
his wife Aliza to Australia to see Lowy. (A trip that did
not come about, in the end.) Later on the police didn’t
remember or understand, and were surprised by the
investigation itself,” noted Zelekha.
When asked about this a few days ago, Fischer declined to
comment.
Akirov blames the press
Not many people remember, but one of the members of Frank
Lowy’s group of investors for a short time – not until the
end – was another friend of Olmert’s: businessman Alfred
Akirov. He also wanted to buy control of Leumi along with
them. And Akirov, too, as we have just learned in recent
days, could find himself entangled in the next phase of the
Holyland case.
Akirov will be invited to answer the police’s questions
in the next few days, to clarify whether he actually paid
Zaken to "keep quiet" during the Holyland trial by hiring
her at his real estate development company Alrov, as an
adviser on Jerusalem hotel marketing events and in the field
of incoming tourism.
Akirov claims that he paid Zaken 12,000 shekels a month
in wages, and she gave receipts as a self-employed
contractor.
As is his wont, Akirov blamed the press for dragging him
into the limelight now: “I assume that sticking my name in
the Olmert affair was intended to satisfy the press, and
nothing more,” he declared.
Today, Akirov owns 3.1% of the share of Bank Leumi, even
though his main business interest lies in real estate and
the hotel industry. The shares he owns give him some
influence over the bank – for example, as concerns the
choice of the chairman and the wages of senior executives.
As opposed to state officials, Akirov voted in favor of the
compensation packages for the bank’s CEO Rakefet
Russak-Aminoah and chairman David Brodet.
Occasionally Akirov can be seen on television, always
blames the media for fanning the flames or Knesset members
for incitement against the rich. You can find in Akirov’s
offices – as in those of public relations guru Rani Rahav of
prominent attorney Ram Caspi – paintings done by Olmert’s
wife Aliza, which cost thousands of dollars.
The Alrov real estate firm has built, among other things,
the Mamilla project in Jerusalem just outside the Old City
walls, as well as the famous Akirov Towers in Tel Aviv, a
well-know status symbol. Olmert was responsible for years,
as mayor of the Jerusalem and later as the chairman of the
ILA, for the advancement of the Mamilla project.
Livnats behind the scenes
Nochi Dankner naturally drew the fire when the IDB
conglomerate collapsed recently. His silent partners in
controlling IDB, who also were company directors, were
members of the Livnat family ־ specifically, the Avraham
Livnat Group. They remained behind the scenes and came out
of the debacle almost unharmed. Even today, after losing
control of IDB, the Livnat family controls one of the
largest and most influential companies in Israel.
The family deals not only in haulage and logistics, its
traditional business fields, but also owns quarries and an
explosives factory through Taavura Holdings Ltd. Taavura has
a monopoly in the area of transporting cement, and also
controls the publicly owned Maman, which operates cargo
terminals at the airports. The firm also operates buses in
cooperation with Egged.
In 2010, after he was already suspected of criminal acts
in a number of cases, Olmert received an offer to work for
Motti Zisser – before he too saw his business go bankrupt.
Zisser already employed someone close to Olmert, former
Jerusalem city engineer Uri Sheetrit, who was also convicted
last week of receiving bribes in the Holyland case.
Olmert decided to accept the suggestion of Taavura and
Avraham Livnat, who appointed him chairman of the Avraham
Livnat Group.
This week Haaretz asked the Livnat family whether Olmert
would remain chairman of the group after his conviction, or
whether he would be fired – but the Livnats declined to
answer. Sources close to the family said the Livnats see no
reason to remove Olmert, and they emphasize that theirs is a
privately owned firm.
The fact of Taavura being privately held – and not
publicly traded – is important, since if it were public,
Olmert would have no choice but to resign as convicted
criminals cannot serve in such positions. The message seems
to be that since the firm is private, convicted criminal
Olmert has no contact with the public’s money.
This, of course, is deceptive. While the Avraham Livnat
Group is a private entity, it owns a public company: Maman.
Also, just a month ago Taavura raised 50 million shekels
from institutional investors, who manage the public’s
pension and provident funds. Add that sum to the 190 million
shekels in loans the group has already taken out.
So, what is Olmert’s connection to all this? The Livnat
family loves to tell the story of the father, Bondi, who
will never forget how Olmert’s father invited him in when he
was a poor, young Holocaust survivor all alone in a new
country. It is certainly an emotional story, but it also has
a very troubling side as revealed in the past by Raviv
Drucker on the "Hamakor" investigative TV show: Olmert was
involved as the industry and trade minister in decisions
that favored Dankner and the Livnats. Olmert was responsible
for raising duties on cement, which was to the benefit of
the Livnats and their Nesher cement monopoly.
Bribes from public funds
Israel Salt Industries' lands, those at the heart of
Danny Dankner’s second trial and conviction, no longer
belong to the Dankners. It was sold a few years ago, along
with their shares in Bank Hapoalim, to Shari Arison – the
controlling owner of the bank.
Arison bought out the public in the industries, and now
it is a private firm. But until then, the company was a
public company controlled by the Dankner family. This did
not seem to bother Dan Dankner, who took the money from
bribes out of its coffers in 2003 and 2004. And Akirov has
"joined" Dankner, by means of using the auspices of his
publicly traded Alrov to hire Zaken – allegedly to ensure
her silence.
This information was discovered by police investigations.
The question is how many other such strange jobs are being
offered today in companies in which our pensions and other
savings are invested – but about whose operations the public
knows nothing.
Nochi Dankner paid tens of millions of shekels over the
years to lobbyists, brokers and various consultants –
without the public knowing who those people were and why
they were employed. Occasionally the media exposed a few of
these cases. For example, IDB paid 4 million shekels to a
new investment banking firm controlled by the former
chairman of the Israel Securities Authority, Zohar Goshen,
and lobbyist Tomer Amir: The sum was paid as brokers' fees
on a deal to sell a company, but in the end some else
actually closed the deal. Only nine months earlier Goshen
still served as chairman of the ISA, which was supposed to
supervise Dankner – but which allowed him and the Livnat
family to distribute billions of shekels in dividends, thus
precipitating IDB's collapse.
IDB also paid some 2 million shekels to
Aryeh Deri, the
head of the Shas party, for services that still remain
unknown. Deri, as everyone knows, served as interior
minister, was convicted of accepting bribes and was
sentenced to three years in prison.
Israeli Prime Minister Is A Thief [ 31 March 2015 ]
Olmert got
another five years in addition to the six he is doing for a different lot of
thieving. He beat several fraud raps using the Statute of Limitations and
corrupt Attorneys General. Then little Mr. Mazuz got the job
without understanding that politicians are above the law. Whoops.
Israeli Prime Minister Goes Back To Prison [
16 February 2016 ]
QUOTE
JERUSALEM — Describing his fall as “painful and strange,”
Ehud Olmert became on Monday the first former Israeli prime minister to
enter prison, beginning a 19-month term for bribery and obstruction of justice.
UNQUOTE
Olmert isn't just a thief; he is a career thief who
beat several cases using the Statute of Limitations. Last time he got six years,
then beat one rap on appeal. Now he is back in. He might get to meet the
President of Israel who is a
Rapist doing seven years.
Errors & omissions, broken links,
cock ups, over-emphasis, malice [ real or imaginary ] or whatever; if
you find any I am open to comment.
Email
me at Mike Emery. All
financial contributions are cheerfully accepted. If you want to keep
it private, use my
PGP Key.
Home
Page
Updated on
23/08/2020 07:41
