Washington Report on Middle East Affairs, October/November 1997, Pages 23-24

From the Hebrew Press

Current Translations and Commentary From Israel's Hebrew-Language Newspapers

By Dr. Israel Shahak

Land and the Crime of Collaboration

Yediot Ahronot, May 21, 1997

By Matti Golan¹

The orders to assassinate Palestinians who sell land to Jews are "monstrous," said the prime minister. He added a few words about racism and, of course, something about Nazism. He is right. The murder is shocking.

If, however, in Netanyahu's statement you replace "Palestinians" by "Jews," then what he said could apply to us. The whole world, perhaps except Netanyahu, knows that Jews have killed, without a trial, other Jews who collaborated with the British or Arabs.

Isn't selling land to the opposite side collaboration? As a matter of fact, it is much worse. Collaboration usually means giving information that could cause damage, but not to the extent that can change the course of history. The sale of land, however, is an act that decides permanent facts of political historical significance.

Doesn't Netanyahu know what it means for the Palestinians to sell land to the settlers? He should know.

Before the founding of Israel and in the first years of its existence, it was known that any Jew who would dare to sell land to Arabs would suffer a bitter fate, especially at the hands of organizations like the Irgun, whose policies Netanyahu thinks that he continues. When a people is fighting for its land and some of its members sell parts of that land to the opponent, this is considered as a most serious act of treason, and rightly so.

But why go back several decades? How would contemporary Jews treat a Jew who sold land to a Palestinian? Doesn't our code of laws prevent, intelligently but indirectly, Arabs from buying our land and settling among us?

The time has come for us, the Jews, to stop pretending to be a more moral people than other peoples, and especially to stop pretending to have a higher morality than the Arabs. We are not "a great righteous nation,"² and we have never been better than other nations. From memoirs and interviews published today one can understand that in the struggle for our existence we knew quite well not only how to cheat and lie but also how to assassinate and accuse others of acts we ourselves had committed. The time has come for even our prime minister to learn about this.

NOTES:

¹ Golan is a veteran journalist with centrist views.

² A phrase associated with Shimon Peres.

Israel is a Paradise for Money Launderers

Yediot Ahronot, April 27, 1997

By Sever Plotzker

Only in Israel can a person enter a bank with a suitcase that contains a million dollars and deposit the money without disclosing its source. The result: the estimate of the illicit capital coming from abroad into Israeli banks is some $45 billion.¹

There is also the problem of laundered money from illicit deals within Israel. No competent estimates regarding dimensions of the illegal economy within Israel have been made for 10 years.

According to the estimate made in 1983, about 15 percent of the Israeli GNP is not reported to the tax authorities. Experts who have retired in the last years from the State Revenues Administration are convinced that the share of black-market economic activity has grown considerably since that time.

Suppose it is still 15 percent. Last year the Israeli budget was about 100 billion shekels [around $30 billion]. One may reasonably assume that the total output of the "black economy" reached 45 billion shekels last year. Tax loss for the Treasury: 15 billion shekels—more than the budgetary deficit last year.

Who are the principal tax evaders? Contrary to the prevailing view, these are not the richest citizens. They usually report all their income and then hire the services of the best auditors and tax consultants to legally avoid paying any taxes.

Many tax evasions are concentrated among the middle-level self-employed, or wage earners who work in their spare time as self-employed. But most of the taxes evaded come from all kinds of criminal activity.² It is hard to chase medium and small tax evaders, especially when, as in Israel, the duty to report all sources of income apparently does not apply to all citizens.

An additional serious legal failure, characteristic of Israel, is the absence of any specific law that forbids the laundering of black capital. In Israel, an offender can always claim that he got his suitcase with money from a new Jewish immigrant. A more sophisticated tax evader can even point to a money transfer made from a foreign currency account of a new immigrant, exempted from tax so long as he is Jewish, to his own account.

In Israel a citizen who holds an immigrant certificate, issued on the basis of the "Law of Return," can enter a bank with a suitcase containing a million dollars and deposit the banknotes in a special account from which he is entitled to draw money for many years. A bank employee who might ask where the money comes from will be satisfied with the answer, "from where I immigrated." There is no need to prove that this is not laundered Israeli money originating from black business activity, or worse, from criminal activities.

In short, Israel is a paradise for black money laundering, local and international. To close this loophole a bill was prepared three years ago forbidding the laundering of capital. There were violent objections and the bill did not even reach the Knesset. Recently, under pressure from the U.S., which suspects that much of the money laundered in Israel originates in America, and on the initiative of the Ministry of Justice, the bill has returned to the headlines, but has not yet been submitted to the Knesset.

Jonathan Welner, U.S. assistant secretary of state for law enforcement, published an article on the issue a week ago. He claims that:

• Lax bank laws and the exemption of deposits of foreigners from taxes have turned Israel into a paradise for illegal money.
  
  
• Israel is lagging behind in legislation against financial crimes—not only behind Austria and Cyprus, but even behind Lebanon.³
  
  
• A loophole calls for a thief, and in Israel the thief is attracted by several loopholes: The absence of a law against laundering black or criminal capital; the banks not being obliged to keep records on big money transfers; the total absence of agreements with other states for the exchange of information on laundered money; the absence of a control system on the flow of money crossing lsraeli borders or regulations on laundering of capital through other than banks. In short, the Israeli legal authorities have no tools to fight the laundering of black money.

The bill prohibiting capital laundering drafted in the state attorney's office would fill a large share of the loopholes. The Knesset must approve this bill which is backed by the U.S., which will assist Israel in its application. It should be observed that a state without laws that forbid laundering of black money is exposed to serious economic risks.

If the bill against laundering black money becomes a law, Israel must establish a center for tax investigations and financial offenses, common to all law enforcement authorities. The establishment of such a center was recommended by the "Shimron Commission" for the liqudation of serious criminality. The report of the commission was published at the beginning of 1978. In the summer of 1997, the time has come to implement it.⁴

NOTES:

¹ Laundered money reaching Israel is one of the important sources of investments in the Israeli economy.

² The number of Israeli gangsters and their activity has been increasing at a rapid pace during the last 8 to 10 years.

³ Three countries notorious for laundering criminal funds.

⁴ There is no hope that any law against laundering black money will be passed because the religious parties will oppose it violently.

Israeli Government Involvement in Pollard Defense

By Israel Shahak

Since 1995, Jonathan Jay Pollard has been represented by the lawyer Larry Dub, a Jerusalem resident with dual citizenship and a permit to practice law both in the U.S. and in Israel. After Dub submitted to the Israeli Supreme Court a petition against Prime Minister Binyamin Netanayhu for supposedly breaking his promise to free Pollard (which is yet to be taken up by the Court) he and other persons involved in this case were interviewed by Edna Adeto (Yediot Ahronot, May 6, 1997). Interesting facts were disclosed about the involvement of the Israeli government in the legal defense of Pollard.

When asked for his view of why Israel does not pay his legal fees since Pollard has nominated Dub as his lawyer, Dub answered, "I claim in my petition to the Supreme Court that all Pollard's fees to the lawyers who formerly represented him were paid by an American organization financed, in turn, by the Israeli government. The money was conditioned on Israeli approval of the selection of Pollard's lawyers. Since Jonathan Pollard chose me to represent him, Israel has not paid Pollard's legal expenses to me, even though I submitted the bills for my expenses in the case during the last three years to the prime minister."

Amnon Dror, who for many years headed the Israeli public committee to support Pollard, responded to Dub's statements: "I want to declare with certainty, based on my personal knowledge of the issue and the factors involved, that Pollard has never in the past and does not now have any financial problems. I am even prepared to take a risk and declare that both official and other Israeli agencies are prepared in principle to pay any sum of money which will contribute to Pollard's liberation. I am not entitled to explain why official Israeli agencies are not prepared to finance Pollard's current lawyer. I am assuming that they have their reasons and they should be asked about it. Advocate Larry Dub once applied to me and I told him to apply to those responsible for such matters...

"One morning, about a year and a half ago, Pollard decided to dismiss his former lawyer, whom he has strongly criticized. He did it in the framework of total severance of contacts with all those who were previously involved in efforts to liberate him. This included not only his parents and sister, but U.S. Jewish leaders, my colleagues and me. There was hardly any congressman to whom we did not turn in our efforts..."

The prime minister's media adviser, Shay Bazak, stated: "I will not react to the issues raised by Dub's petition, but leave them to the government lawyers. However, I want to emphasize that the prime minister, even when he was only the head of the opposition, acted with the greatest vigor for Pollard's liberation. Since he became prime minister, he has redoubled his efforts.

"In all his meetings in Washington he raises this issue, again and again. This includes his meetings with President Clinton. We shall continue our efforts for the liberation of Pollard."'

All this raises two questions: Is the American public as aware as is the Israeli public that Pollard's former lawyers, including the renowned lawyer and commentator Allan Dershowitz, were financed by the Israeli government? Why were the U.S. media not as frank with their readers about this important issue as the Hebrew press has been?