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Does Corruption Drive Israeli Disengagement?

Rachel Neuwirth- Monday 1st Aug 2005

In the last few weeks we have explored some possible motives behind the government of Israel's insanely self-destructive decision to expel the Jewish population of Gaza and part of Samaria, and to withdraw Israel's military outposts from these areas, which are essential for Israel's defense.

Among the explanations we have considered are the deeply engrained Jewish tendency to seek to please friends and protectors and to appease enemies at all costs--a legacy of the Jewish people's many centuries as a helpless, ghettoized minority. Another possibility is that Prime Minister Ariel Sharon [ ] has been blackmailed by Israel's leftist public prosecutors, who are zealous supporters of the supposed "peace process," and who have been threatening for years to bring criminal charges against Sharon and his two sons.

But these tentative explanations don't fully satisfy even ourselves. Still the question remains: how is it possible for one of Israel's greatest military heroes, a man with a reputation as a patriot and even as a "hard-line" supporter of Israeli settlement in Gaza, Judea and Samaria, to bulldoze through a suicidal project that runs counter to everything he has stood for during the past fifty-seven years? Over the past few days, new revelations have caused suspicions of a more tangible motive for the old soldier's betrayal to be raised: corruption.

Sharon appears to be personally and financially beholden to a circle of financial backers and campaign contributors who stand to make a killing from the Gaza "disengagement." In addition, at least one, and possibly three, other powerful officials in the Sharon administration seem to have a financial interest in the expulsion/withdrawal operation.

Three years ago, a mysterious loan that Sharon had received from an old friend and former army buddy, a wealthy British businessman named Cyril Kern, dominated Israel's headlines. Sharon had apparently used the money to pay a stiff fine imposed on him by Israel's election authority for his solicitation of illegal campaign contributions. It is also illegal for an Israeli public official to accept loans from a foreign national. But Sharon, despite a widely publicized investigation by Israel's public prosecutions office, was never charged with a crime. One of the arguments that he used to defend himself was that Kern had absolutely no business interests in Israel; hence, the loan could not be construed as a bribe.

Now, it seems that a corporation has been formed to develop a gambling casino on the site of the Gaza Jewish community of Elei Sinai, whose land is slated for confiscation and whose inhabitants are marked for expulsion in August, only two weeks from the time that this is being written. The principal organizer of this venture is a financier, Samuel Flatto-Sharon, who has been a fugitive from justice in France for over 20 years, charged with embezzling hundreds of millions of dollars from investors in a fund he had managed. Israel gave Flatto-Sharon refuge and citizenship under its Law of the Return, which allows Jews of every background and past history to immigrate to Israel. Among the other investors are a Saudi billionaire and--you guessed it--a British citizen named Cyril Kern.

Nor, as it turns out, is this Kern's first venture into the Palestinian casino world. He has been a major investor in the casino in Jericho, which had to close down during the recent "intifada" because the terrorists couldn't resist the impulse to shoot it up.

Another major investor in the Jericho casino is an Austrian financier named Martin Schlaf. Described in the Israeli press as a close personal friend of Sharon, he was also a major source of the illegal campaign contributions that enabled Sharon to be elected Israel's Prime Minister in 2001.

The investors in the Jericho casino still have hopes of reviving it, but the Israeli military authorities have been reluctant to authorize Israelis to visit the still-standing and refurbished casino, in view of the Palestinian Authority's failure to maintain even minimal security in Jericho. Hence the interest in a new casino in the Gaza-Gush Katif area.

Schlaf cannot be ruled out as a player in the proposed new casino, either. His company has exclusive rights to operate other casinos in territories administered by the Palestinian Authority. How will the Flatto-Sharon group and the Schlaf group manage their seemingly conflicting interests in Gaza casino development? Will they cooperate, or fight it out for control? Perhaps Cyril Kern, whom the Israeli press has described as an investor in both casino enterprises, will act as a bridge between them. Those possessing a morbid fascination with evil will undoubtedly watch closely how the jackals divide up the spoils.

Not that the Flatto-Sharon and Schlaf groups are the only ones that stand to profit from the confiscated land of the Israeli "settlers." Yet a third such enterprise has as its managing director none other than Eival Giladi, the official in the Prime Minister's office whom Sharon has designated as the "coordinator" of the expulsion-retreat. The British-owned Portland Trust corporation has plans to raise $500 million to build 150,000 housing units for Arabs on the land seized from the Jewish farmers. Giladi will substantially augment his meager income as an Israeli civil servant by directing the development of the land, whose present owners are to be "evacuated," after he supervises their expulsion himself. No public official, it would seem, has ever had a stronger incentive for getting his job done!

The principal investor in the Portland Trust is Sir Ronald Cohen, a British billionaire who is a close advisor and political backer of the number two man in the British government, Chancellor of the Exchequer Gordon Brown. Cohen also recently bought up Israel's monopoly telephone company, Bezeq.

The Portland Trust's corporate charter says openly that one of its objectives is to promote the foreign policy goals of the British government and the European Community in the Middle East. One of these goals is, of course, to bring about Israel's withdrawal to its pre-1967 "Auschwitz borders," as the late Israeli foreign minister Abba Eban named them. That makes corporate CEO and withdrawal-expulsion "coordinator" Giladi a foreign agent as well as a public official with a massive conflict of interest. The Portland Trust, too, has "recommended" casino development for the seized Gush Katif lands.

Another public official who has a possible financial interest in the "disengagement" is Sharon's closest advisor, his chief of staff and personal emissary Dov Weissglass. Virtually all-knowledgeable Israelis believe that Weissglass is the principal architect of, and driving force behind, the "disengagement." His only qualification for advising the Prime Minister about matters vital to Israel's security is the fact that he has long been Sharon's personal attorney, the man who has helped him to bail out of countless legal scrapes over the years. Weissglass's law firm, from which he is on temporary leave while he works in the Prime Ministers Office, represents the Austrian company that is a part owner of the gambling casino in Jericho and has a franchise from the PA to develop future casinos. Weissglass's firm also represents the business interests of the Palestinian Authority itself, which owns a substantial interest in the Palestinian casino companies, and is either part or full owner of nearly all businesses in the territory it rules. Weissglass is a friend of the shadowy Palestinian financier Muhammad Rashid, who managed the looting of the PA-owned companies and the transfer of their assets to the personal accounts of Yasir Arafat, Jabril Rajoub, and other Palestinian officials. Weissglass and Ariel Sharon's son and business partner Giladi "celebrated" Sharon's election as Prime Minister in 2001 with Rashid, in the "swank" apartment that Rashid owns in Tel Aviv, according to knowledgeable Israeli journalists.

Still another Israeli official who may have a financial interest in the "disengagement" is veteran Israeli politician Shimon Peres, who is currently Israel's deputy prime minister. (Over the past thirty years he has served as prime minister, foreign minister, defense minister, and in practically every other cabinet portfolio/) Peres is the founder of something called the Peace Technology Fund, a venture capital entity chartered in the Cayman Islands, which had as its stated goal bringing together investors from around the world to promote development in the Palestinian "territories," including Gaza. It invested in, among other things, Palestinian real estate companies. Perhaps not coincidentally, real estate prices in the vicinity of the Israeli communities slated for "evacuation" have gone through the roof in the past few months, as the expulsion and land-grab draws near. Peres suddenly dissolved this secretive partnership earlier in 2005 after Israeli investigative journalist David Bedein began to ask some hard questions about the secretive PTF, such as "how much was it paying Peres to act as an investment 'finder?'" Supposedly, its assets were all sold to unidentified Palestinian "entities."

The apparent reality is that Israel's government is a cesspool of corruption and treason. Its prime minister appears willing to place his people in mortal peril by destroying their national security, unity and morale, for no better purpose than to confer financial benefits on his financial backers and political hangers-on. Could the ethical and patriotic standards of Israel's leaders really have declined so far, so quickly from those of David Ben-Gurion, Golda Meir, or Menechem Begin?

We must all pray that honest and patriotic men and women will take back Israel's government and clean it up before it is too late.

Postscript for July 29, 2005. We have just received word that the Knesset Controls Committee has recommended that the Knesset order an investigation by the State Controller of Eival Giladi's apparent conflict of interest affecting his position as "Public policy coordinator" of the Gaza withdrawal-expulsion. The committee has learned that Giladi didn't sign the conflict of interest agreement required of all civil servants when they are appointed to a new position until more than three months after his appointment--and one hour before the Controls Committee met to consider the allegations against him! It has also learned that Giladi was appointed to this position by Prime Minister Sharon without a public advertisement for applicants for the position and the open, competitive hiring process required by Israeli law. Stay tuned for more developments!

* John Landau contributed reporting and research to this article



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