Israel Resource Review 30th July, 2005


Some US Congressional leaders worry that Gaza pullout amounts to appeasement

Nobody in the Republican-controlled Congress wants to be seen as opposing the wishes of both Israeli Prime Minister Ariel Sharon and the Bush administration. But quietly, the unilateral Israeli pullout from the Gaza Strip is making some prominent House and Senate members nervous.

Over the past few weeks, these legislators have been briefed by leading Israeli and U.S. strategists over the impact of the Israeli pullout.

The briefers have not been unanimous in their assessment. But virtually all raised the prospect of the Gaza Strip turning into another Somalia, or a terrorist haven hosted by a dysfunctional Palestinian Authority. The terrorists would certainly include members of the Iranian-sponsored Hizbullah as well as Al Qaida.

One scenario envisioned that Abu Mussib Al Zarqawi would use the Gaza Strip to recruit Palestinians for the Sunni insurgency in Iraq as well as for operations in neighboring Jordan. Another scenario was that Gaza would be used as a launching pad for attacks on U.S. and NATO shipping in the eastern Mediterranean.

Rep. Dan Burton, an Indiana Republican and regarded as one of the most security-minded members of the House, expressed his concern over the Gaza pullout on U.S. interests in the Middle East and the war on terrorism. In a June 20 House speech, Burton, a senior member of the House International Relations Committee, viewed the Israeli withdrawal as a victory for terrorism both over the Jewish state and the United States.

"Personally, I will not second guess the prime minister's wisdom," Burton said. "I very much hope that he is right. But again, my experience tells me that if you take steps to appease an enemy you only give him a green light to put more pressure on you. In my opinion, it is imperative and critical to U.S. national security that we as policymakers understand the consequences should the Israeli disengagement plan fail to live up to expectations."

Burton then introduced into the record an assessment by a former Israeli diplomat, Yoram Ettinger, who served in Washington and as consulate-general in Houston during the 1990s. The assessment warned that the Israeli pullout could create a terrorist regime that could turn the Palestinians into an international threat against the United States as well as against such allies as Jordan, Kuwait, Oman and Qatar.

"Disengagement is perceived, by the Mideast, as cut and run, appeasement and cave-in, in sharp contrast to U.S. war on terrorism," the assessment said. "No negotiation with - and no concession to - terrorists; no ceasefire with, but destruction, of terrorist regimes; no political, but military solution, to terrorism."

This ran in the August 2nd, 2005 issue of Geostrategy-Direct

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Does Corruption Drive Israeli 'Disengagement'?
Rachel Neuwirth

July 30th, 2005

In the last few weeks we have explored some possible motives behind the government of Israel's insanely self-destructive decision to expel the Jewish population of Gaza and part of Samaria, and to withdraw Israel's military outposts from these areas, which are essential for Israel's defense.

Among the explanations we have considered are the deeply engrained Jewish tendency to seek to please friends and protectors and to appease enemies at all costs--a legacy of the Jewish people's many centuries as a helpless, ghettoized minority. Another possibility is that Prime Minister Ariel Sharon [] has been blackmailed by Israel's leftist public prosecutors, who are zealous supporters of the supposed "peace process," and who have been threatening for years to bring criminal charges against Sharon and his two sons.

But these tentative explanations don't fully satisfy even ourselves. Still the question remains: how is it possible for one of Israel's greatest military heroes, a man with a reputation as a patriot and even as a "hard-line" supporter of Israeli settlement in Gaza, Judea and Samaria, to bulldoze through a suicidal project that runs counter to everything he has stood for during the past fifty-seven years? Over the past few days, new revelations have caused suspicions of a more tangible motive for the old soldier's betrayal to be raised: corruption.

Sharon appears to be personally and financially beholden to a circle of financial backers and campaign contributors who stand to make a killing from the Gaza "disengagement." In addition, at least one, and possibly three, other powerful officials in the Sharon administration seem to have a financial interest in the expulsion/withdrawal operation.

Three years ago, a mysterious loan that Sharon had received from an old friend and former army buddy, a wealthy British businessman named Cyril Kern, dominated Israel's headlines. Sharon had apparently used the money to pay a stiff fine imposed on him by Israel's election authority for his solicitation of illegal campaign contributions. It is also illegal for an Israeli public official to accept loans from a foreign national. But Sharon, despite a widely publicized investigation by Israel's public prosecutions office, was never charged with a crime. One of the arguments that he used to defend himself was that Kern had absolutely no business interests in Israel; hence, the loan could not be construed as a bribe.

Now, it seems that a corporation has been formed to develop a gambling casino on the site of the Gaza Jewish community of Elei Sinai, whose land is slated for confiscation and whose inhabitants are marked for expulsion in August, only two weeks from the time that this is being written. The principal organizer of this venture is a financier, Samuel Flatto-Sharon, who has been a fugitive from justice in France for over 20 years, charged with embezzling hundreds of millions of dollars from investors in a fund he had managed. Israel gave Flatto-Sharon refuge and citizenship under its Law of the Return, which allows Jews of every background and past history to immigrate to Israel. Among the other investors are a Saudi billionaire and--you guessed it--a British citizen named Cyril Kern.

Nor, as it turns out, is this Kern's first venture into the Palestinian casino world. He has been a major investor in the casino in Jericho, which had to close down during the recent "intifada" because the terrorists couldn't resist the impulse to shoot it up.

Another major investor in the Jericho casino is an Austrian financier named Martin Schlaf. Described in the Israeli press as a close personal friend of Sharon, he was also a major source of the illegal campaign contributions that enabled Sharon to be elected Israel's Prime Minister in 2001.

The investors in the Jericho casino still have hopes of reviving it, but the Israeli military authorities have been reluctant to authorize Israelis to visit the still-standing and refurbished casino, in view of the Palestinian Authority's failure to maintain even minimal security in Jericho. Hence the interest in a new casino in the Gaza-Gush Katif area.

Schlaf cannot be ruled out as a player in the proposed new casino, either. His company has exclusive rights to operate other casinos in territories administered by the Palestinian Authority. How will the Flatto-Sharon group and the Schlaf group manage their seemingly conflicting interests in Gaza casino development? Will they cooperate, or fight it out for control? Perhaps Cyril Kern, whom the Israeli press has described as an investor in both casino enterprises, will act as a bridge between them. Those possessing a morbid fascination with evil will undoubtedly watch closely how the jackals divide up the spoils.

Not that the Flatto-Sharon and Schlaf groups are the only ones that stand to profit from the confiscated land of the Israeli "settlers." Yet a third such enterprise has as its managing director none other than Eival Giladi, the official in the Prime Minister's office whom Sharon has designated as the "coordinator" of the expulsion-retreat. The British-owned Portland Trust corporation has plans to raise $500 million to build 150,000 housing units for Arabs on the land seized from the Jewish farmers. Giladi will substantially augment his meager income as an Israeli civil servant by directing the development of the land, whose present owners are to be "evacuated," after he supervises their expulsion himself. No public official, it would seem, has ever had a stronger incentive for getting his job done!

The principal investor in the Portland Trust is Sir Ronald Cohen, a British billionaire who is a close advisor and political backer of the number two man in the British government, Chancellor of the Exchequer Gordon Brown. Cohen also recently bought up Israel's monopoly telephone company, Bezeq.

The Portland Trust's corporate charter says openly that one of its objectives is to promote the foreign policy goals of the British government and the European Community in the Middle East. One of these goals is, of course, to bring about Israel's withdrawal to its pre-1967 "Auschwitz borders," as the late Israeli foreign minister Abba Eban named them. That makes corporate CEO and withdrawal-expulsion "coordinator" Giladi a foreign agent as well as a public official with a massive conflict of interest. The Portland Trust, too, has "recommended" casino development for the seized Gush Katif lands.

Another public official who has a possible financial interest in the "disengagement" is Sharon's closest advisor, his chief of staff and personal emissary Dov Weissglass. Virtually all-knowledgeable Israelis believe that Weissglass is the principal architect of, and driving force behind, the "disengagement." His only qualification for advising the Prime Minister about matters vital to Israel's security is the fact that he has long been Sharon's personal attorney, the man who has helped him to bail out of countless legal scrapes over the years. Weissglass's law firm, from which he is on temporary leave while he works in the Prime Ministers Office, represents the Austrian company that is a part owner of the gambling casino in Jericho and has a franchise from the PA to develop future casinos. Weissglass's firm also represents the business interests of the Palestinian Authority itself, which owns a substantial interest in the Palestinian casino companies, and is either part or full owner of nearly all businesses in the territory it rules. Weissglass is a friend of the shadowy Palestinian financier Muhammad Rashid, who managed the looting of the PA-owned companies and the transfer of their assets to the personal accounts of Yasir Arafat, Jabril Rajoub, and other Palestinian officials. Weissglass and Ariel Sharon's son and business partner Giladi "celebrated" Sharon's election as Prime Minister in 2001 with Rashid, in the "swank" apartment that Rashid owns in Tel Aviv, according to knowledgeable Israeli journalists.

Still another Israeli official who may have a financial interest in the "disengagement" is veteran Israeli politician Shimon Peres, who is currently Israel's deputy prime minister. (Over the past thirty years he has served as prime minister, foreign minister, defense minister, and in practically every other cabinet portfolio/) Peres is the founder of something called the Peace Technology Fund, a venture capital entity chartered in the Cayman Islands, which had as its stated goal bringing together investors from around the world to promote development in the Palestinian "territories," including Gaza. It invested in, among other things, Palestinian real estate companies. Perhaps not coincidentally, real estate prices in the vicinity of the Israeli communities slated for "evacuation" have gone through the roof in the past few months, as the expulsion and land-grab draws near. Peres suddenly dissolved this secretive partnership earlier in 2005 after Israeli investigative journalist David Bedein began to ask some hard questions about the secretive PTF, such as "how much was it paying Peres to act as an investment 'finder?'" Supposedly, its assets were all sold to unidentified Palestinian "entities."

The apparent reality is that Israel's government is a cesspool of corruption and treason. Its prime minister appears willing to place his people in mortal peril by destroying their national security, unity and morale, for no better purpose than to confer financial benefits on his financial backers and political hangers-on. Could the ethical and patriotic standards of Israel's leaders really have declined so far, so quickly from those of David Ben-Gurion, Golda Meir, or Menechem Begin?

We must all pray that honest and patriotic men and women will take back Israel's government and clean it up before it is too late.

Postscript for July 29, 2005. We have just received word that the Knesset Controls Committee has recommended that the Knesset order an investigation by the State Controller of Eival Giladi's apparent conflict of interest affecting his position as "Public policy coordinator" of the Gaza withdrawal-expulsion. The committee has learned that Giladi didn't sign the conflict of interest agreement required of all civil servants when they are appointed to a new position until more than three months after his appointment--and one hour before the Controls Committee met to consider the allegations against him! It has also learned that Giladi was appointed to this position by Prime Minister Sharon without a public advertisement for applicants for the position and the open, competitive hiring process required by Israeli law. Stay tuned for more developments!

This article can be found at:
John Landau contributed reporting and research to this article

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Abu Mazen:
We Can't Promise Zero Gunfire During Withdrawal
U.S. Pressures Israel to allow arms for the P.A.
Amit Cohen, Ilil Shahar and Felix Frisch
Correspondents, Maariv

The scenario that has the security establishment most concerned is of disengagement under fire, but, judging by the statements made recently by Palestinian Authority officials, it seems unlikely that they will be able to prevent that scenario from playing itself out. Palestinian officials say this stems from a severe shortage of guns and ammunition that will keep them from stopping Hamas and from ensuring a quiet Israeli pullout from Gaza.

"Our security organizations have 20% of the necessary equipment. The situation is even graver when we're talking about ammunition," said Tawfik Abu Husa, a spokesman for the Palestinian Interior Ministry, adding that the PA had already discussed this matter with Israel and the United States. He said Israel had offered no response on the matter, but the Palestinians believe that the Americans will understand their needs. Indeed, it seems as if the United States is applying pressure on Israel about permitting the Palestinians to acquire more weapons. Dov Weissglass, Prime Minister Sharon's political adviser, has left for the US to reach an agreement with the administration about its demand that Israel permit the Palestinians to purchase ammunition and other equipment used in warfare. Secretary of State Condoleezza Rice raised this issue insistently in the course of her most recent visit to the region last week.

Israeli officials said that the Americans have demanded that Israel increase the assistance it gives to PA Chairman Abu Mazen. The Israeli officials said they believed the Americans were afraid that Hamas might gain in strength at the expense of the moderate forces in the Palestinian Authority leadership.

The Americans are also displeased with the fact that Israel and the PA have failed thus far to coordinate disengagement, failing even to reach an agreement about the demolition of the settler homes. James Wolfensohn, the special envoy of the US administration and the Quartet for the implementation of disengagement, said yesterday in the course of a visit to Gaza and a meeting with Abu Mazen that a decision about razing the settler homes would be made in the next number of days.

Against the backdrop of Israel's concerns about possible terrorism in the course of the evacuation process, high-ranking IDF Intelligence Branch officials said this weekend that they believed Hamas had decided to hold its fire in the Gaza Strip and to allow, for the time being, for the disengagement process to be coordinated. According to the IDF Intelligence Branch situation assessment, the Hamas leadership realized that if they continue to attack Israel in the pre-disengagement period, as they did up until last week, Israel would be forced to launch a large-scale ground operation in the Gaza Strip and to seize control of large swaths of territory in Palestinian cities.

Israeli officials believe that Hamas's decision stems from their fear that the Palestinian public will perceive Hamas's continued vigilante operations as a gratuitous act of provocation that will slow down the pace of the Israeli withdrawal and will damage the eased restrictions on the Palestinians. This situation assessment has given rise to the decision not to launch a major ground operation in the Palestinian cities in the near future.

This piece ran in Maariv on July 31, 2005

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PA to Buy Weapons from Egypt
Roni Shaked
Intelligence Analyst and Correspondent, Yediot Ahronot

Israel has allowed the Palestinian Authority to buy ammunition for the Kalashnikov assault rifles in its possession, said Palestinian sources in Gaza yesterday.

These sources said: "our ammunition has run out and we're going to need it to provide security both during the evacuation and after it."

Palestinian Interior Minister Nasser Yousef made a request to purchase the ammunition more than three months ago in the course of a meeting he held with Defense Minister Shaul Mofaz. Officials in Yousef's office said that Mofaz replied: "there's a lot of ammunition in Gaza. Buy it on the black market."

The Americans applied pressure on Israel recently to allow ammunition to be purchased, and this issue was raised in the course of Secretary of State Condoleezza Rice's visit. A decision ultimately was made to allow the Palestinians to buy the ammunition via Egypt because Israel was averse to providing it directly to the PA.

This piece ran in Yediot Ahronot on July 31st, 2005

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