Aryeh Deri’s brother grilled as suspect in graft probe

Shlomo Deri, the building contractor brother of Interior Minister Aryeh Deri, is the “very close” associate questioned under caution as part of an investigation into suspected irregularities in the Shas leader’s real estate holdings.

Deri, whose identity came to light with the lifting of a court gag order late Wednesday, was grilled by interrogators for a third straight day Thursday morning.

Police investigators searched Shlomo Deri’s home and office this week, and both he and his daughter were brought in for questioning for two separate suspicions related to graft and financial irregularities.

Attorney General Avichai Mandelblit announced on March 31 that a criminal investigation will be opened against Aryeh Deri for suspected corruption, after fresh fraud allegations were leveled against the Shas leader.

The investigation centers on unreported real estate owned by Deri and members of his family, including a vacation home in northern Israel and apartments owned by each of his nine children.

A joint team of detectives from the Lahav 433 police anti-corruption unit and the tax authority is investigating the minister’s brother.

Shlomo Deri said that he had paid for most of the vacation villa in the community of Safsufa near Mount Meron, but insisted that the transaction had been entirely legal.

Shlomo Deri has already sued the financial daily Globes for an article reporting that he had paid only NIS 4.25 million ($1.12 million) for an apartment complex he bought from brother Aryeh in the Jerusalem neighborhood of Givat Shaul that was actually worth 12 to 15 million shekels ($3.17-3.97) and for describing the deal as a fraudulent act and a straw deal. He said Aryeh bought the plot in 2010 for NIS 3.7 million ($980,000) because he had planned to build a house for himself on it.

The report said the whole complex had belonged to an acquisitions company that had built two residential towers nearby and that Shlomo Deri purchased the empty plot from Aryeh for NIS 10 million ($2.65 million), but registered it in Aryeh’s and Aryeh’s family’s names before going on to build a five-apartment building on it.

Shlomo explained that the building had remained in Aryeh Deri’s name because the process of transferring ownership to the property acquisition company took so long. “Today, the issue has been sorted out and the house is registered under my name and my children’s names,” he told the NRG news site.

“As I said, Aryeh is a talented guy with a clear agenda that draws fire and gossip,” Shlomo went on. “They take something small like the house in Safsufa and blow it up. I saw that a senior editor at The Marker [financial daily] wrote that the thing has to be seen in proportion. The luxury villa in Safsufa is the equivalent of a crappy apartment in Tel Aviv. There were people who asked me if building the house in Safsufa was intended to win Arab votes.”

Aryeh Deri, who has served a prison sentence for graft offenses that took place during his previous tenure as interior minister, has sought to downplay allegations about his real estate holdings and said he would cooperate with the investigation to prove his innocence.

“Yesterday I found out that my wife and I have become real estate moguls,” he said when word of the probe against him first broke in late March. “We have owned an apartment for about 25 years, in which we raised nine children and for which we are still paying the mortgage. In addition, we have a vacation home in Safsufa for the extended family, including the grandchildren.”

The Movement for Quality Government called some six months ago on the attorney general to look into gaps between the value of the properties Deri owns and those he reported to the media.

When he was appointed interior minister, Deri’s declaration of capital included property whose value was estimated at NIS 5 million ($1.32 million). That included his apartment in Har Nof, Jerusalem, valued at NIS 4.7 million ($1.24 million), NIS 10,000 in savings ($2,645), a stock portfolio worth NIS 300,000 ($79,350) and a NIS 60,000 ($15,870) car registered in the name of his wife Yaffa.

Reports say Deri had made some NIS 2 million ($530,000) from consultancy following his release from jail.

In October, investigative journalist and transparency advocate Tomer Avital revealed that one of the interior minister’s daughters owned an apartment in Jerusalem and a third of a house in Tel Aviv and that three and a half apartments were registered in another daughter’s name, three of them in Tel Aviv’s Hatikvah Quarter. A third daughter was registered as the owner of an apartment in Tel Aviv and a house on a moshav between Tel Aviv and Jerusalem. One son was registered as the owner of an apartment in the Saul Towers in Jerusalem, and another bought an apartment in Jerusalem through a property acquisitions company. And there’s the villa in Safsufa.

Israel Radio reported that investigators had questioned one contractor and a senior source from Shas, but not under caution.

Aryeh Deri’s political rival, the former Shas leader Eli Yishai, said Wednesday that Deri’s predicament gave him no joy. Yishai, who failed to win any seats in the last elections as leader of the far-right Yachad list, told activists in Jerusalem on Wednesday: “I will never gloat. On the contrary: It’s true that we have ideological and political differences, but on the personal level we are all brothers, and I hope for him that the whole business will end with nothing.”

Times of Israel staff contributed to this report.