Netanyahu held tax haven bank account

Benjamin Netanyahu

"Globes" reveals that Prime Minister Benjamin Netanyahu held an account in the Channel Islands tax haven of Jersey.

Between his first term as prime minister and his appointment as finance minister, Benjamin Netanyahu held a bank account in the Channel Island tax haven of Jersey. During this period, most of Netanyahu's income came from speaking tours around the world.

Documents obtained by "Globes" show that Netanyahu transferred money to an account in his name at a branch of the Royal Bank of Scotland on Jersey, one of the Channel Islands whose economy is based on offshore financial services. Jersey has a particularly liberal tax regime: a zero tax rate, making it an ideal tax haven for investors, according to experts. Jersey is ranked as the best tax haven in the world.

According to the documents obtained by "Globes", Netanyahu's account was active during the brief period of his time-out from politics, in 1999-2003, after his first term as prime minister and his appointment as finance minister.

Transactions in Netanyahu's account shed some light on his activity during these years. For example, on December 13, 2000, he sent signed instructions to transfer from the account $2,468.45 to the Shimron, Molho, Persky & Co. law firm. Isaac Molho is one of Netanyahu's closest aides and used as a special diplomatic emissary. In 1999, when Netanyahu was prime minister, Molho was his personal emissary for diplomatic affairs, and handled negotiations with the Palestinians. Molho is filling the same role today. According to Netanyahu's office, Molho carried out his diplomatic missions at the time on a voluntary basis.

Molho's partner in the firm, David Shimron, who is also his brother-in-law, represented Netanyahu in two legal affairs during those years: the gifts affair, and the Amadi affair. In the gifts affair, Netanyahu and his wife were suspected of taking for their personal use official gifts given him by world leaders in his capacity as prime minister. By law, such gifts are state property. The case was closed due to lack of evidence, after it turned out that Netanyahu kept a meticulous list of all gifts he received from world leaders.

In the Amadi affair, Netanyahu was suspected of exploiting his position as prime minister to obtain benefits from a trucker, Avner Amadi. The police recommended indicting Netanyahu on charges of bribery, fraud, breach of trust, and obstruction of justice, but the attorney general decided against it.

Both Molho and Shimron are related to Netanyahu. Shimron's mother was a cousin of Netanyahu's father, and Molho is married to Shimron's sister.

The documents also show that, at the same time, Netanyahu instructed the bank to transfer $8,000 to the bank account of IDF Col. (res.) Yehuar Gal, Netanyahu's chief of staff in 2000, when he was considering a political comeback. After Netanyahu lost the 1999 elections to Ehud Barak, he expressed an interest in returning to politics and considering running against Ariel Sharon for the head of the Likud, before giving up on the idea.

On January 29, 2001, Netanyahu instructed the manager of his bank account in Jersey to transfer $1,800 to Aviv Bushinsky, his media adviser during his tenure as prime minister in 1998-99, and who kept the job after Netanyahu briefly quit political life. In 2003, when Netanyahu was appointed finance minister, Bushinsky was his chief of staff.

The documents show that on February 2, 2002, Netanyahu instructed the manager of his Jersey bank account to transfer $145,000 to Lehman Brothers in New York. A few months later, in late 2002, Netanyahu was serving as foreign minister, and he was appointed finance minister a few months after that. In this capacity, he initiated tax reforms.

Netanyahu personally signed all of the documents.

Israeli law permits the holding of bank accounts in tax havens, provided that the account owner notifies the Israel Tax Authority about them. However, the Tax Authority, an agency that was answerable to Netanyahu when he was finance minister, is trying to reduce Israelis' use of tax havens.

During the 2012 US presidential campaign, President Barack Obama's campaign staff fiercely attacked the Republican candidate, Mitt Romney, after the discovery that he had bank accounts in tax havens, even though this was not illegal.

In 2013, "Forbes Israel" ranked Netanyahu as Israel's sixth richest politician, estimating his fortune at NIS 41 million. The magazine said that Netanyahu, who is not a scion of a wealthy family, made most of his fortune in 1999-2001. During this period, he reportedly enriched his bank account by millions of shekels. For example, he bought his house in Caesarea in 2002.

It seems that the loss to Barak in the 1999 elections may have been a political disappointment for Netanyahu, but, financially, it paid off handsomely. In the subsequent three years, when he held no public office, he was a highly sought-after speaker. He was reportedly invited to give more than 20 speeches a year around the world, for which he earned $60,000 per engagement. "Forbes Israel" estimates that Netanyahu made a profit of NIS 15 million from his speaking engagements alone. Most of his clients were foreign businesses and universities.

At the same time, Netanyahu served for two years as a strategic adviser to BATM Advanced Communications Ltd. (LSE: BVC; TASE: BATM). In addition to his salary, which was reportedly several hundred thousand shekels a year, he received options, which he subsequently exercised. He also "opened doors" for other companies, including Electric Fuel (now Arotech Corporation (Nasdaq: ARTX) for which he brokered a deal with US retail giant Wal-Mart Stores Inc. (NYSE: WMT). According to "Forbes Israel", Netanyahu earned $150,000 for holding 15 meetings with wealthy people, including Idan Ofer and Poju Zabludowicz on Electric Fuel's behalf. He reportedly received $2.5 million in salary and options from these two companies. Another source of income was his position as senior strategic advisor to Net2Wireless Communications Inc., to which he was appointed in November 2001.

The Prime Minister's Office said in response to this report, "This time too your attempts to discredit Prime Minister Benjamin Netanyahu do not fit in with the facts. We are talking about an account that has not been active since 2003. In 1999 after Netanyahu's first term as prime minister he made an investment via the account that had no tax advantage over Israel. The accounts and deposits were fully reported to the authorities in Israel including the Israel Tax Authority and were also included in the declaration of wealth filed by Netanyahu with the Israeli authorities."

Published by Globes [online], Israel business news - www.globes-online.com - on January 15, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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Benjamin Netanyahu
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