Oligarchs pumping money into Elkin Jerusalem mayoral campaign, filing shows

Oligarchs pumping money into Elkin Jerusalem mayoral campaign, filing shows

Likud minister has raised $1.68 million for campaign, according to State Comptroller, thanks largely to loan guarantees from wealthy individuals connected to former Soviet Union

Jerusalem mayoral candidate Ze'ev Elkin attends a debate between candidates for the upcoming Jerusalem Municipality electiona, Jerusalem, October 21, 2018. (Yonatan Sindel/Flash90)
Jerusalem mayoral candidate Ze'ev Elkin attends a debate between candidates for the upcoming Jerusalem Municipality electiona, Jerusalem, October 21, 2018. (Yonatan Sindel/Flash90)

Massive loan guarantees from wealthy individuals with ties to the former Soviet Union appear to have put Ze’ev Elkin, a leading contender to be Jerusalem’s next mayor, way ahead of his rivals when it comes to declared campaign funding.

Elkin — currently the government’s environmental protection and Jerusalem affairs minister — has raised NIS 6,166,000 ($1.7 million) for his election campaign, according to figures released by the State Comptroller’s Office.

Ofer Berkovitch, the 35-year-old leader of the Hitorerut (Awakening) list, comes a far second with NIS 157,582 ($43,000), while the third leading candidate, Moshe Lion, has just NIS 88,100 ($24,000).

The figures, however, reflect only what the candidates are actually reporting.

Lion, a businessman, has said he will be putting up much of his own cash.

Berkovitch is evidently securing funding that he is not legally obliged to report.

The law requires those running for local office to continually update details of donations and loan guarantees on the State Comptroller’s website.

It does not, however, oblige reporting about personal loans.

Loan guarantees enable candidates to borrow from banks on the assumption that they will be able to repay debts after the elections with finance received from the state.

Local government candidates qualify for state financial support so long as they get at least one mandate.  Some of the money is advanced during the campaign, with the final calculations being made according to various criteria only after the elections are over.

Berkovitch and Lion’s campaign declared accounts are made up of small donations up to the legal maximum of NIS 5,000 ($1,360) per gift, the records show.

Likud Minister Zeev Elkin (L) and Moshe Leon in the Knesset on March 26, 2015. (Yonatan Sindel/FLASH90)

Elkin’s list, by contrast, contains 16 loan guarantees, the biggest for NIS 1 million each (there are no legal limits on loan guarantee amounts), alongside contributions by individuals.

Several of those backing Elkin are Russian-speaking emigres to Israel, like Elkin himself.

The three guarantors for the NIS 1 million ($273,000) loan guarantees include Yuri Zelvensky, who resides in the well-heeled coastal town of Caesarea, where Prime Minister Benjamin Netanyahu and his wife Sara also have a home.

Zelvensky was a founder in 2003 of Sibinterneft, a Siberian oil company based in Tomsk — one of Siberia’s oldest towns. His name still appears in Russian media in connection with several Tomsk companies. He has also served as president of the local Jewish cultural autonomy organization in Tomsk and as a presidium member of the Russia-wide Jewish congress.

Zelvensky was named person of the year for his efforts to help restore an old synagogue in Tomsk. In Israel, he is a co-founder of Ocsial S.A R.L which deals in nanotechnology. He has also helped to advance a project for a Soviet Jewry Heritage Center in the western Galilee town of Ma’alot.

Another guarantor for a NIS 1 million loan is Alexander Milelis of Rishon LeZion in central Israel.

The Times of Israel has been unable to trace him either in the English, Hebrew or Russian media.

Elkin’s biggest lender is Moshe Schwetz, who has underwritten two loans, each of NIS 1 million.

Schwetz, an active member of the religious community of Beit Meir outside Jerusalem, has been heavily involved in the creation of a Chabad complex in the Russian city of Tolyatti (formerly Stavropol).

Also supporting Elkin, with a loan guarantee for NIS 500,000 ($136,000), is Lev Kaganov. He has been identified by the Globes business daily as a Jerusalem-based owner of Russian-language media and production companies.

Temor Ben-Yehuda (Khikhinashvili), chairman of the Russia-based Israel-Russia Business Council and president of the new Israel-based Israel-Russia Chamber of Commerce, pictured in Jerusalem, October 9, 2018. (Sue Surkes/Times of Israel)

Temor Ben-Yehuda (Khikhinashvili), who has also supported Elkin’s political career in the past, has meanwhile guaranteed a NIS 360,000 ($97,800) loan.

Ben-Yehuda, a prominent Georgian-born, Moscow-based Russian-Israeli Jewish businessman — most of whose business interests are in Russia — was in Jerusalem earlier this month for the official launch of the Israel-Russia Chamber of Commerce, also attended by Elkin.

The chamber of commerce forms the Israeli side of a partnership with the Russia-based Israel-Russia Business Council, which was set up several years ago.

Ben-Yehuda heads the latter and will serve as president of the former.

Israeli-Georgian tycoon and philanthropist Mikhael Mirilashvili. (YouTube screenshot)

Two big names that are conspicuously absent from Elkin’s supporters’ list are those of business tycoons Vladimir Gusinsky and Mikhail Mirilashvili. Both supported Elkin’s run in the Likud primaries of 2015, albeit to the tune of the roughly NIS 11,000 maximum ($3,000) allowed by law.

Gusinsky, a former owner of the Maariv newspaper, who has Spanish and Israeli citizenship, was a Russian media baron in the early 1990s under then Russian President Boris Yeltsin.

A leader of the Russian Jewish Congress, he came into conflict with Yeltsin’s successor, Vladimir Putin, and was subsequently charged with various offenses, including theft and embezzlement from state-owned companies, which his supporters said were trumped up. Gusinsky fled to Spain and then to Israel, successfully avoiding extradition back to Russia.

In Israel, his businesses are represented by Aviad Friedman, a long-time Elkin associate, who is understood to be part of Elkin’s campaign team.

Friedman, who chairs the Association of Community Centers on a voluntary basis, would not comment for this article.

Mirilashvili, who was released from a Russian prison in 2009 after spending eight years on allegedly trumped-up charges connected to his father’s abduction, is one of Israel’s wealthiest citizens, according to Haaretz, with an estimated net worth of $3 billion.

His extensive holdings in Russia are said to include shopping malls, casinos and other gambling venues. In Israel, he has invested in high-tech and agricultural tech companies, Haaretz has reported.

Elkin and his campaign did not respond to a Times of Israel request for comment before press time.

Ze’ev Elkin in his office on May 2, 2016. (Hadas Parush/Flash90)

Elkin, 47,  immigrated from Ukraine in 1990, and began his political career in the Kadima party under Ariel Sharon. He moved over to Likud, led by Prime Minister Benjamin Netanyahu, after the more dovish Tzipi Livni took over as Kadima chief.

Before becoming minister for environmental protection and for Jerusalem affairs, he served as deputy foreign minister and coalition chairman, as well as chairman of the powerful Foreign Affairs and Defense Committee.

Considered close to Netanyahu, he has also served as acting deputy prime minister when the premier was abroad.

For his mayoral bid, Elkin has — and is making full campaigning use of — Netanyahu’s backing, although the Likud party is supporting a Jerusalem Likud list lead by a local attorney.

Education Minister Naftali Bennett shakes hands with Minister Ze’ev Elkin in the Knesset on December 7, 2016. (Hadas Parush/Flash90)

Elkin is also backed by the leader of the Jewish Home Party, Naftali Bennett.

The job of Jerusalem mayor is seen as a launchpad for a prime ministerial bid.

Ehud Olmert, who served as prime minister from 2006 until 2008, completed two terms as Jerusalem’s mayor between 1993 and 2003.

The decision of the capital’s current mayor, Nir Barkat, to join the Likud party and not to run for a third term in Jerusalem is also widely interpreted as a move onto the national political stage.

Several months ago Elkin moved to the Jerusalem neighborhood of Pisgat Ze’ev from the West Bank settlement of Kfar Eldad, some 10 kilometers (6 miles) southeast of the capital.

Earlier this month, he told The Times of Israel that he realized he could give more to the country as mayor of Jerusalem, including by attracting more business to the city and massively increasing housing for Jews in predominantly Palestinian East Jerusalem.

Ofer Berkovitch, Jerusalem mayoral candidate and head of the Hitorerut (Awakening) movement, seen at the opening of Hitorerut’s election campaign in Jerusalem on September 2, 2018. (Yonatan Sindel/Flash90)

Elkin is currently polling behind Berkovitch, from the secularist Hitorerut party, but is widely expected to ultimately beat him in a runoff. No candidate is expected to reach the 40% threshold needed to win outright.

Lion has been endorsed by leading ultra-Orthodox rabbis, although the backing of much of the city’s Haredi community in the 2013 mayoral race did not enable him to defeat Barkat.

In addition to state finance and donations, candidates connected to a national party in the Knesset can also enjoy donations to the party, which are published online.

Because it is not supporting Elkin, the Likud party will direct whatever donations it has for Jerusalem to Elisha Peleg, the lawyer heading the local Likud list in the municipal elections.

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