Barak’s Last Scandal?

Spouse’s employment of an alien is Ehud Barak’s latest scandal. We offer a short history of the others.

On Monday, Israeli media reported Nilly Pri’el, wife of Security Minister Edud Barak, sent a letter to the General Attorney, Yehuda Winstein, informing him she is willing to pay a fine for illegally employing an alien.

That’s nice of her, I guess. It also looks suspiciously like an attempt to hurriedly close Pandora’s box, and in should be said, in fairness to Winstein, that he did not fall for this trick, and on Thursday informed Pri’el she may be facing a felony indictment. Last week, Winstein had egg all over his face when he announced the case closed, since no one could find the alien employee – only to have the magnificent reporter Carmela Menashe dig her up and interview her, a feat which in which Winstein, the Alien Workers Police (the OZ unit) and the fabled GSS all failed miserably. This humiliation was compounded on Thursday night, when Channel 10 managed to pull the same trick.

Now things are complicated. The employee, apparently called Virginia, told Menashe that if Pri’el was really looking for her, she only had to look for Virginia’s phone number, which she naturally gave her. According to journalist Orly Wilnai, Pri’el provided the investigators with the wrong name (Hebrew). Wilnai further reported that Virginia received handsome sums from the Baraks, apparently in an attempt to buy her silence (Hebrew).

That’s why Pri’el sent that scared letter. We are no longer dealing with illegal employment plus non-payment of Virginia’s social security dues, but with covering up evidence and possibly obstruction of justice. In the US, admittedly, the first offense was enough to finish the career of at least one of Bill Clinton’s cabinet secretaries, but that’s not the kind of lesson Israel learns from the US. Obstruction of justice, however, is a whole new opera.

So, perhaps, it is time to sum up what we know of the questionable actions of Ehud Barak and his spouse.

Barak’s societies: During the 1999 prime minister elections, Barak’s campaign created several dummy societies, promoting (while pretending to fulfill other purposes) Barak’s election. Barak himself, naturally, claimed to know nothing of it and did not sign anything incriminating. The affair involved Shiei Weizmann, the foul-mouthed buffoon still following Barak loyally, and Barak’s brother-in-law, Doron Cohen (who still serves as Barak’s main money-man). Current Minister Yizhak (“Buzhie”) Herzog kept silent during his interrogation. It should be noted that much of the blame should be placed on the shoulders of the then Attorney General, Elyakim Rubinstein, who several years earlier decided that a similar trick made by Netanyahu’s campaign in 1996 was legal, or in any case not illegal, due to a “lacuna” in the elections law. No indictments were served, but the affair stank to high heaven.

Mark Rich’s pardon: On Bill Clinton’s last day in office, he pardoned Marc Rich, an escaped felon who, among other crimes, secretly traded with Iran while that country held American hostages., as well as with Apartheid South Africa. One of the arguments later used by Clinton to exculpate that decision, which besmirched his name, was that he was under pressure to do so by Ehud Barak, at the time a flailing Israeli prime minister who has already lost his majority in the Knesset – though presumably the fact that Rich’s wife donated heavily to Hilary Clinton’s senate campaign also stood Rich in good stand.

The Labor party, while led by Barak, received large donation from Rich’s wife. Barak never explained his involvement in this affair, and it’s good bet most Israelis aren’t aware of it – the media certainly did not follow the case.

Barak told Clinton, in a recorded phone conversation which became federal evidence, that Rich should pardoned because of “financial matters”, as well as Rich’s aid of Mossad. What financial matters? We still have no idea. (Hebrew)  Did Rich actually aid the Mossad, or was this just Barak bluffing? And if Rich did aid the Mossad, why did Barak use a phone conversation, which was bound to be recorded (as it was), to inform Clinton of this? Only Barak knows, and he isn’t talking.

Fast Money: Until 2001, Barak was a civil servant all his life. A senior one, certainly, for about two decades; but a civil servant, with a civil servant’s salary. Between 2001 and 2007, when he once more became the Security Minister, he somehow made a fortune, no one is quite sure how. He made no new product and is not, to put it mildly, considered to be a business genius. He gave lectures and held the amorphous title of “advisor”. He purchased the now-infamous apartment in Akirov Towers for some 40 millions NIS (more than 11 million dollars), and has recently purchased two more apartments for some 9 million NIS (2.7 million US$). Barak has systematically avoided informing the public about his sources of income (Hebrew): the company he built, Ehud Barak LLC, has made 30 million NIS in the four-something years he was active in it. As noted above, just the apartments he bought cost some 49 million NIS, and Barak is not known for living frugally: his watch, for instance, costs 80,000 NIS. From the way things look, there is a gap of some 20 million NIS between Barak’s income and his expenses – a gap Barak refuses to explain. It is worth noting that Barak held a bank account in the Cayman Islands, a well-known tax haven. Why? No one bothered mounting a serious investigation.

Taurus: Some two years ago, it was discovered that Nilly Pri’el was operating a company, named Taurus, whose specialty was marketing access and influence. Since presumably people wouldn’t pay Pri’el’s fee of 30,000 NIS just to get her influence, the reasonable assumption is that Barak was pimping his own influence while still in office. There was a short public outcry, as a result of which Pri’el closed Taurus.

Orascom/Hutchison: So what services, precisely, can Barak offer companies? The case of Orascom/Hutchison may prove instructive. Orascom is a giant telcom company, based in Egypt, which holds parts of a Chinese telcom, Hutchison. The latter held – until 2009 – 51% of Partner, a leading Israeli telcom. According to Israeli law, in order for a foreign company to hold more than 10% of any Israeli communication company, it needs a permit. During 2005-2006, Orascom was interested in buying more Hutchison stock, but that would mean enlarging its Partner holdings, and it needed a permit. Our security services, naturally, took a dim view of the idea that parts of Partner will become the property of an Egyptian company, and declined to issue the permit.

Enter Barak. He led a lobbying campaign on behalf of Orascom. He repeatedly pestered the then Prime Minister, Ehud Olmert, Communication Minister Ariel Atyas and GSS chief Yuval Diskin (the latter is still in office). This took place while Barak was already back in political life, and was campaigning against Amir Peretz for the leadership of Labor.

As exposed by journalist Ben Caspit (Hebrew), one of the directors of a sister Orascom company, Orascom Real Estate, was American businessman Richard Gerson. Gerson and his brother Marc have each donated 30,000 NIS to Barak’s campaign. Gerson was also one of the few clients of Taurus. And, according to rumors vehemently denied by Barak, also did business directly with Barak through the Blueridge hedge-fund, which belongs to Gerson. Barak also claims there was no business affiliation between him and Orascom, and that he lobbied for it, and annoyed some bigwigs for nothing. Okay. Explain to me again, then, that 20 million gap?

Family Busines: In accordance with the law, Barak stopped his activity in Ehud Barak LLC as soon as he became a minister again, and turned the company over to his daughters. However, it seems the company is still active, and received while Barak was inactive – officially, anyway – some 6.5 million NIS. It’s clear what for. So, again: if Barak made his fortune by lecturing, advising and in all likelihood lobbying, why do large sums of money keep coming to Ehud Barak LLC even when he is not lecturing, advising, or lobbying? Barak, by the way, refuses to explain (Hebrew) who transferred money to the company, and for what reason.

The state comptroller announced he will investigate the issue. Barak did not bother to appear to the hearing in the relevant Knesset committee. As Oren Persico of 7th Eye has noticed (Hebrew), the acts attributed to Barak are very similar to those attributed to Avigdor Liberman; the latter also has a very successful daughter, who made millions by the time she was 21 by “advising” foreign companies. Another similar episode is the one in which Gilad Sharon received some millions for googling a Greek island while his father was prime minister.

Somehow, when it comes to Barak, those affairs cause much less noise. Maybe the latest Pri’el affair will be the straw that broke the camel’s back.

But I’m not holding my breath.