Several prominent Israelis are named in the so-called “Pandora Papers” — a review of nearly 12 million files obtained from 14 different firms located around the world — including a former justice minister, a secretive billionaire and a leading Likud lawmaker.
Some 565 Israelis are listed in the Pandora Papers, published by the International Consortium of Investigative Journalists, according to Shomrim, an Israeli investigative journalism nonprofit organization that took part in the investigation.
The leaked trove is being dubbed the “Pandora Papers” because the findings shed light on the previously hidden dealings of the elite and the corrupt, and how they have used offshore accounts to shield assets collectively worth trillions of dollars. Some 600 journalists from 150 media outlets in 117 countries worked on the report, released Sunday by the ICIJ.
The straw man
Former Labor Party Justice Minister Haim Ramon is among the high-profile Israelis named in the report.
Ramon’s name comes up in connection to a dubious tourism real estate deal in Montenegro with Austrian casino magnate Martin Schlaff.
The allegations revolve around the “Bigova Bay” company set up in 2006, with a 20 million euro loan from an Austrian bank, to set up a tourism project in Montenegro.
The company began buying land in the area, but was hit by the 2008 financial crisis. In 2013, the company was sold to another company, MS Privatstiftung, that is owned by Schlaff.
However, in 2016 the company had some 52 million euros in debts and Schlaff sold it to a Cypriot company, apparently partially owned by Ramon. Later documents show Ramon then became the sole owner.
However, the deal makes little financial sense, given the company’s large debt, lack of progress and a clause that allows Schlaff to buy back the company.
Schlaff is a well-known name in Israel, having been linked to several Israeli politicians, including the corruption trial of current Finance Minister Avigdor Liberman. Liberman was acquitted.
Ramon, a rising star in Israeli politics until he was convicted in 2007 of forcing a kiss on a young female soldier, denied any wrongdoing in the “Bigova Bay” deal.
“I completely reject the accusation that I was a ‘straw man’ for MS Privatstiftun. these accusations are harmful, hurtful, and not true,” Ramon said in a statement Sunday.
Ramon said his company was merely “working to extract the ‘Bigova Bay’ project from the dead-end in which it has been mired.”
Courts and mines
Also named in the papers is secretive Israeli diamond magnate Beny Steinmetz, who was convicted this year of bribery in a Geneva court.
Steinmetz was accused of having set up a complex financial web, including a system of front companies, in order to pay bribes — partly through Swiss accounts — so that Beny Steinmetz Group Resources (BSGR) could obtain mining permits in Guinea’s southeastern Simandou region.
The area is estimated to contain the world’s biggest untapped iron ore deposits.
In a separate case, last year a Romanian court sentenced Steinmetz and political adviser Tal Silberstein in absentia to five years in jail each in an organized crime case.
The two Israelis were found guilty of “the creation of an organized criminal group” in a property-related case that dates back to 2006-2008 and cost the Romanian state $145 million.
According to the papers, in 2018 Steinmetz, at the height of legal proceedings against him, and his children decided to transfer some $1 billion from a Lichtenstein-based fund, to one in the Cook Islands.
The official reason given for the transfer was that the Steinmetz family were unhappy with the performance of the fund.
Steinmetz had no comment on the transfer.
Another prominent Israeli named is Likud MK Nir Barkat.
According to the report, the eToro company that Barkat has holdings in is registered in the Virgin Islands, despite the majority of its offices being located in Israel. While having a company registered in a tax haven is not always illegal per se, it may violate the Knesset Ethics Committee’s guidelines.
Barkat, while serving as Jerusalem’s mayor between 2008 and 2018 maintained that his wealth was under a blind trust, as most politicians do. Yet according to Shomrin, the leaked data showed that much of his wealth was still under his name until 2019.
After Barkat was elected to the Knesset in 2019, he transferred the same shares to his brother Eli Barkat, despite the Knesset Ethics Committee’s guidelines requiring a “public trust company,” Shomrim said.
Barkat’s office issued a statement on Sunday stating that “when he entered the public sphere some 18 years ago, he transferred the management of all his business activity to his brother, and when he was elected to the Knesset, he filed blind trust documents alongside a full declaration of capital to the Ethics Committee and asked for its guidance.”
“It is hard to disconnect the political interests at play in the publication of this ridiculous ‘investigation,’” the statement added.
Barkat had previously sought to be Israel’s finance minister, and last year, then-prime minister Benjamin Netanyahu said he would tap him for the role if he managed to form a government.
In 2019, the business magazine Forbes Israel estimated Barkat’s net worth at some NIS 500 million ($139 million), making him the wealthiest lawmaker.
More than a dozen heads of state and government, including the king of Jordan and the Czech prime minister, have amassed vast fortunes in secret offshore assets, according to the investigation.