The ultra-nationalist Israeli political figure Avigdor Lieberman has made a name for himself with his anti-Arab vitriol and hard-line stance on Israeli claims to the West Bank. But the frequent headlines concerning his many inflammatory remarks tend to crowd-out under-reported allegations surrounding his ascent to power—namely—those concerning his numerous shady business dealings and conflicts of interest while serving in previous governments. For a while now it has been occasionally reported that Lieberman faces a possible indictment for bribery and money laundering. In-depth exposes in Ha’aretz have gone further than most sources in describing his involvement with a shadowy underworld that ties certain Israeli political and business groups with diamond moguls, Russian oligarchs, arms dealers and foreign bank accounts. There is good reason to believe that the two roles Lieberman take on, of the Zionist firebrand and the secretive businessman, are beginning to overlap in a manner that represents a larger trend.
Mr. Lieberman is a steadfast advocate of Israeli settlement activity and himself lives in the West Bank settlement of Nokdim. One of Lieberman’s associates, the scion of a well-known family that made its fortune off the diamond trade, serves as a perfect case of the overlap between politically-connected business moguls and Zionist efforts to colonize the West Bank. As we shall see, it is part of a nexus in which the profits made from neo-colonial arrangements in Africa are being used to fund Israeli settler-colonists in occupied Palestine.
LIEBERMAN AND HIS “PATH TO THE EAST”
The issue of Lieberman’s allegedly illicit financial arrangements first came out publicly in 2000, when a report by the State Comptroller discovered that his party, Yisrael Beitenu, had “received a million dollar credit line from a bank in Israel, using a bank guarantee from Vienna for the credit line. The Viennese bank […] was given a personal guarantee of the million dollar guarantee by a foreign resident.” The foreign resident turned out to be an Austrian businessman named Martin Schlaff, who is also suspected of having bribed the now comatose ex-PM Ariel Sharon.
Central to the allegations against Lieberman is a company he established in the late 1990s called Nativ el Hamizrach (“Path to the East”), an international trading company. He had just resigned his position as PM Netanyahu’s director general in 1997 and decided to use his political influence and numerous connections for more profitable ends. One of his first successes was on behalf of an Austrian bank. He made $3 million predicting a devaluing of the Russian ruble. This was apparently enough to raise the suspicions of Israel’s National Fraud Investigation Unit (NFIU), which took depositions from officials at the bank. None of them were able to adequately explain how Lieberman could have correctly predicted the devaluation.
In 1999, Lieberman was elected to the Knesset and he resigned his position as CEO of the Nativ el Hamizrach as the law required him to. Despite this, plenty of conflicts of interest and reasons for suspicion became apparent. Many of his closest associates were named as directors and shareholders of the company. The year of Lieberman’s election to the Knesset was–suspiciously–a “breakthrough” year for the company. According to Ha’aretz, “millions of shekels began to flow to Nativ el Hamizrach from companies associated with the lumber industry and firms dealing in raw materials for construction.” Upon becoming the minister of national infrastructure in March 2001, he appointed Micha Lazar–the accountant for Nativ el Hamizrach–to the board of directors of the Israel Electric Corporation. It is also suspected that Lieberman was heavily involved in laundering money through his confidants during this time period.
To further support the case that Lieberman advanced his business interests while in office, Ha’aretz reported that:
The revenues of Nativ el Hamizrach skyrocketed in the years when Lieberman was an MK and a cabinet minister: from about NIS [Israeli new shekel] 1 million in 1999 to more than NIS 5 million in 2000, NIS 8.5 million in 2001, NIS 6 million in 2002 and NIS 4 million in 2003. In 2004, revenues fell by half, to about NIS 2 million, and in the past two years [2005 and 2006] they have stood at hundreds of thousands of shekels a year.
DAN GERTLER’S CONGO ENTERPRISE
Dan Gertler comes from a prestigious family that made its fortune off the diamond trade. His grandfather, Moshe Schnitzer, is known as the “king of Israel’s diamond industry.” Gertler has chosen to distance himself from the family business by starting an independent firm, Dan Gertler Israel (DGI), and dealing with rough diamonds instead of polished diamonds. DGI serves as his main conduit for mining investment operations throughout the world.
In early 2000, Dan Gertler arrived in Kinshasa, the capital of the Democratic Republic of the Congo (DRC) with the intent of meeting with its new leader Laurent Kabila. The DRC had been in a state of chaos and conflict since the overthrow of the Cold War-era US ally Mobutu Sese Seko in 1997. The presence of armies from neighboring African countries aggravated the situation further. Its mineral wealth was being systematically plundered by government and military officials from both within and outside the country. Gertler was eventually able to arrange a meeting with Kabila by taking advantage of his international liasions. He offered an impressive $20 million up front payment in exchange for comprehensive monopoly rights to all of the DRC’s diamond exports. Kabila, who was desperate for the cash, accepted the offer. Gertler established a Congo branch of DGI and named it International Diamond Industries (IDI). Gertler later attributed this successful deal to his credentials. As he told The Scotsman: “they checked up on me and saw that I have a good company and that I am someone they could trust.”
The monopoly had it’s drawbacks. Despite the fact that the DRC government received a greater percentage of revenues, illicit smuggling of diamonds out of the country increased.
Analysts claimed that the IDI monopoly offered below-market prices for diamonds, causing many producers to smuggle their stones into the neighboring Republic of Congo (Brazzaville). According to Ambroise Kawaya Swana, the DRC’s deputy minister for mines, shipments of rough diamonds from Brazzaville to buyers in Belgium soared from $1.2 million a month before IDI’s monopoly to $25 million a month (World Peace Foundation 2002, p. 15).
In January 2001, Laurent Kabila was assassinated by his own bodyguard. His son Joseph Kabila entered office stating that he wanted to democratize the DRC and engage the impress the West. That April, he ended the IDI monopoly with much encouragement from the International Monetary Fund (IMF). Gertler still maintained good ties with the DRC leadership and soon found new methods of reasserting his presence there.
In 2003, he made a secret agreement through Emaxon Finance Corporation, a Canadian firm he controlled. The agreement gave him the right to export 88% of the diamonds mined by MIBA (the DRC’s government-owned diamond company), which were purchased with a 5% discount. A December 2003 expose from Newsweek revealed that the DRC’s own mining minister, Eugene Diomi Ndongala, said it was “a terrible contract for the republic.” Diomi estimated that the discounted rates to Emaxon was costing MIBA about $2 million per month. It also reported on evidence that a Kabila associate named Augustin Katumba Mwanke, who was once suspended from the administration for being named in a UN report on corruption, put pressure on MIBA to sign the Emaxon deal.
Interestingly, Kabila has been utilizing Gertler and his close Brooklyn-born confidant Haim Leibowitz as representatives for his regime in Washington DC since 2002. They met with then national security advisor Condoleezza Rice, who referred them to a National Security Council member responsible for African affairs named Jendayi Frazer. The duo lobbied her for assistance to Kabila’s regime and an easing in human rights-related criticism. They later took credit for helping Kabila get a visit to the Bush White House in November 2003.
TIES BETWEEN LIEBERMAN AND GERTLER EXPOSED IN LAWSUIT
In 2004, a lawsuit was filed by Yossi Kamisa, an ex-officer of Israel’s border police, against Dan Gertler, an Israeli government agency responsible for arms export and a retired general named Yosi Ben-Hanan. Kamisa claims that in July 2000, Avigdor Lieberman invited him to a meeting at the Jerusalem offices of Nativ El Hamizrach. He was referred by Lieberman to Gertler, who needed security advice as part of his deal with Kabila.
According to the suit, Gertler told Kamisa that if the attempts to secure monopoly rights for the DRC’s diamond exports were successful then Kamisa could earn a significant portion of the profits if he provided certain security services. Specifically, Kamisa was told he would need to help recruit and train the Congolese army and provide protection for both Kabila’s regime and the Gertler’s diamond enterprise. When Kamisa requested a formal contract in writing, he “was told that the diamond industry did not normally make contracts and that everything was settled by a handshake.”
The suit alleged multiple acts of corruption on the part of Gertler and his associates in the Israeli government, including Lieberman. It was asserted that Gertler:
- Bribed Congolese officials and Angolan generals allied with Kabila, which Kamisa claimed to have witnessed personally while on a visit to the Congo.
- Illegally attempted to bring the Congolese army’s chief-of-staff to Israel to meet with Israeli defense industry officials.
- Arranged for Lieberman to stop the Israeli Ministry of Foreign Affairs from filing a police complaint against him over the attempted Congo army chief visit.
Gertler soon canceled his agreement with Kamisa and, in October 2000, agreed to pay him NIS 1.4 million on the condition that he forgo any claims or demands. Kamisa persisted in attempting to obtain permission to train the Congolese army on his own but an application to do so was rejected by the Foreign Defense Assistance and Defense Export Organization (SIBAT). Around the time of this rejection, two major generals named Meir Dagan (later named head of the Mossad) and Avigdor Ben-Gal applied to train the Congolese army on Gertler’s behalf.
Shortly after Kamisa’s application was rejected, a delegation of senior Congo Army officers arrived in Israel and visited the same defense industries that were blocked to Kamisa. SIBAT illegally approved the visit, without obtaining the consent of the Ministry of Foreign Affairs. The visit was cut short after Kamisa contacted [a Ministry of Foreign Affairs official] and the Congolese officers […] were flown back home.
In September 2002, when Kamisa planned to file a complaint with the Israel Police chief of investigations over the affair, he was promptly fired from his position at Ministry of National Infrastructures. It is of course worth mentioning that Avigdor Lieberman was the head of the infrastructure ministry at this point in time and that the firing was ordered by an appointee and political associate of Lieberman. Kamisa’s position was reinstated only after an appeal to the National Labor Court.
The basis for the lawsuit is the assertion that Gertler “grossly and fundamentally” violated his earlier agreement with Kamisa when he worked to block Kamisa’s security work in the DRC while Ben-Gal and Dagan were picked as a replacement. The suit was rejected immediately as a result of the October 2000 agreement in which Kamisa forfeit any claims surrounding the Congo diamond security deal.
For his part, Gertler denied being personally involved in any arms deals and that Dagan and Ben-Gal were brought to the Congo as sources of advice more than anything else. Israeli documents appear to corroborate this as it does not appear that very many arms were exported to the DRC from 2001 to 2002. However, allegations of a corrupt relationship with Lieberman still continue to haunt him.
At the beginning of 2009, Gertler was interrogated by Israeli police on suspicion of bribing Lieberman. He was asked “if he had joint business dealings with Lieberman and whether he had transferred funds to companies allegedly controlled by Lieberman.” He denied both allegations, but admitted that he employed Lieberman for a brief period of time in the late 1990s and paid him the equivalent of a couple thousand US dollars.
INVESTING IN ISRAELI SETTLEMENTS
In July 2008, the West Bank village of Bil’in filed suit in Canadian court against two Quebec registered companies called Green Mount Inc. and Green Park Inc. The suit alleged that both companies take part in construction and sale of condominiums in the Modi’in Illit settlement, which is built on land confiscated from Bil’in. As it turns out the majority shareholder in Green Mount and Green Park is Lexinter Management, whose majority shareholder is a Panama registered entity called FTS Worldwide Corporation, which is controlled by Dan Gertler Israel.
It would appear as though Mr. Gertler is not alone in using the wealth from his diamond business to finance the colonization of Palestinian land. The Israeli billionaire businessman Lev Leviev, who is a competitor with Gerlter, has attracted attention from mainstream sources for his controversial diamond dealings in Angola and his involvement in West Bank settlement construction. According to a profile in New York Magazine:
Leviev’s alliance with Angola’s central government, which won the country’s civil war, led to his gaining primary control of the country’s rough-diamond supply in 2000. A security company contracted by Leviev was accused this year by a local human-rights monitor of participating in practices of “humiliation, whipping, torture, sexual abuse, and, in some cases, assassinations.”
According to research done by Adalah-NY, Leviev’s investment in construction activities often takes place in settlements that are “central to Israel’s efforts to seize control of and annex strategic areas of the West Bank.” He also provides funding to settler support organizations such as the Land Redemption Fund.
Yedioth Ahronoth and other sources explain that the Land Redemption Fund has used large sums of money, strong-arm tactics and deceit to secure Palestinian land for settlement expansion. According to Gadi Algazi,”The fund, established 20 years ago, coordinates the takeover of Palestinian land in key areas earmarked for the expansion of the settlements. Moreover, “The fund’s intelligence network is made up of former [Palestinian] collaborators who were discovered and returned to their villages, retired Israeli General Security Services operatives who are information contractors for pay, and former military governors,” who use their “connections in the villages.” The Land Redemption Fund’s attorney Moshe Glick explained the LRF’s goals to Yedioth Ahronoth in this manner: “The fund has no interest in just blurring the Green Line, but wants all of Judea and Samaria to move toward the State of Israel.”
Mines and Communities: Congo asset strip (27 Feb. 2006)
Dissident Voice: Gertler’s bling bang Torah gang (9 Feb. 2008)
Christian Science Monitor: An Israeli tycoon, the Virgin Islands, and Africa’s blood diamonds (22 Jun. 2010)