Arik - The Life Of Ariel Sharon (78 page)

Only it wasn’t. Bank Leumi belatedly realized that Sycamore Ranch couldn’t be mortgaged because the Sharons didn’t own the freehold: it was state land, farmed on long-term lease. Two weeks later, however, it seemed the Sharons really would be able to draw a final line beneath the whole episode: a sum of $1.49 million was deposited in the brothers’ account at a branch in Tel Aviv of the Israel Discount Bank. The money was sent by Cyril Kern, a resident of
South Africa, from his account in
BAWAG (Bank für Arbeit und Wirtschaft) in
Vienna, through J. P. Morgan in
New York, and on to Israel Discount Bank in Tel Aviv. On April 30, with this deposit as their surety, the brothers negotiated a loan from Israel Discount Bank of 4.2 million shekels. With this, they paid off the loan they had taken from Bank Leumi in Sderot, which was to have been secured by the mortgage but could not be.

Eight months later, and just three weeks before the election, this whole elaborate edifice came crashing down around the Sharon family with the publication, on January 7, 2003, of the
Haaretz
story. Ariel Sharon appeared to have tripped himself up under questioning. Interrogated by police detectives on April 22 over what was then still the front companies affair, the prime minister had trotted out the version of the loan and the mortgage in Sderot, even though, as the prosecutors explained in their letter to the South African legal authorities,
everyone involved knew by then that it was impossible to mortgage the ranch.
ⁱ

The evolution of the front companies affair into the Cyril Kern affair threatened to add a new and, for Sharon, dangerous aspect to the public’s perception of his and his family’s conduct. From election finance finagling, the story looked as if it were becoming one of outright bribery, or at least of illicit gift taking by the prime minister and his family. The Israeli political ethos, like that of many democracies, makes a distinction between donations to politicians at election time, even if they exceed or otherwise infringe legal restrictions, and gifts to politicians at other times—which are looked on with greater severity.

The almost comical structure of empty companies with pompous, patriotic names was assumed to have been intended to enable Sharon’s longtime patrons and admirers to continue supporting him, especially now that he was bidding for the highest office.
^j
Granted, some of these people had business interests in Israel, which made their support unethical and possibly illegal even beyond the election finance laws infringements. But over the long years, the public had somehow grown inured to Sharon’s enduring dalliance with this moneyed circle of American backers. His ranch, which he showed off with such pride, had been paid for by these friends, and his claims that he had paid them back were always taken with a pinch of salt.

Cyril Kern was someone new, at least to the broad public. The media quickly learned that he was indeed a very old friend of Sharon’s. The two had met back in 1948 when Kern, a young British Jew, came out to Palestine to fight as a volunteer in the new state’s army.
He had gone back to England and flourished in the textile business. Later he moved to
South Africa. Cyril and Arik, for all their disparities, had been close for more than fifty years. And he was certainly a rich man. But was he rich enough to write a check for $1.49 million to help a friend in trouble? Or was he, like
Annex Research, also just a front? His money had been remitted through Austria, from the same bank used by
Martin Schlaff. Schlaff had been growing closer to the Sharons in recent years. He’d been a guest at
Sycamore Ranch. His assiduous cultivation of Israeli politicians, his involvement in the Jericho casino, his reported plans to build another in
Eilat—all these were seen as more sinister, certainly more suspicious, than the activities of Sharon’s other, older friends.

T
he Cyril Kern affair, hugely embarrassing and potentially lethal, accounted for only half of Sharon’s woes that first week of January 2003. Another rumbling episode of alleged bribe-taking by the Sharon family came surging to the surface, this one on the pages of the mass-circulation
Yedioth Ahronoth
.

In March 2001, just a month after he took office as prime minister, the paper had published a seven-page exposé concerning an ambitious but disreputable building contractor and Likud activist named David “Dudi” Appel who set out in the late 1990s to buy
Patroklos, a scenic and undeveloped island just off the Greek coast thirty miles southeast of Athens.
¹⁹
Appel planned to build on the island a vast vacation and recreation complex with many thousands of hotel rooms and holiday apartments, huge shopping malls, golf courses, theme parks, cinemas, an opera house, concert halls, sports stadiums, and fifteen(!) casinos. To buy the island and then to develop it, Appel knew he would need the backing of the Greek authorities. There would have to be legislation to change the designation of the island from a protected archaeological site to a tourist venue. He lobbied vigorously in Athens, with the help of an Israeli-Australian-Greek businessman, Norman Shkolnik, who claimed to have close connections with the powers that be in the Greek capital.

In Israel, Appel lobbied two key figures in his party: Ariel Sharon, the foreign minister; and Ehud Olmert, the mayor of Jerusalem. In January 1999, he persuaded the Israel
Labor Party, then in opposition, to invite a delegation from its Greek sister party, Passok, led by the deputy foreign minister, Yiannos Kranidiotis. Appel picked up the tab. He prevailed on Minister of Foreign Affairs Sharon to attend an intimate dinner with the Greek delegation in an apartment he owned
in
Tel Aviv. Other senior politicians and ex-generals completed the star-studded guest list. Unfortunately, the Greek deputy minister was killed soon after in a freak plane accident. Later in the year, Appel persuaded Olmert to invite the mayor of Athens on an official visit. Again Sharon, now leader of the opposition, graced an intimate dinner with his presence, this time in Appel’s home.

All through this period, for reason of various and sundry criminal suspicions against him, the police were tapping Appel’s telephone lines and monitoring his copious conversations. They heard him, for instance, promise generous support, both political and logistic,
both
to Sharon
and
to Olmert, who were running against each other in the Likud leadership primary in September 1999. They also heard him discuss with Sharon, albeit in rather general terms, the fact that Sharon’s son Gilad was working on the Greek island project and would, as Appel stressed, be earning very well out of it. “He’s learned how to lose money till now; now he’s going to learn how to make some,” Appel assured Sharon. Was the payment to the son in fact a payoff to the father?

Despite
Yedioth
’s efforts to demonstrate a prima facie suspicion of bribery against the prime minister, the “Greek island affair” seemed to fade away after the initial publication in 2001. Neither Sharon nor Gilad was questioned by the police, and no additional evidence was unearthed by the media. Now, though, as the Likud floundered in a wave of corruption stories, the Greek island suddenly surfaced again. On January 2, 2003,
Yedioth
splashed over its front page the contract of employment between Appel and Gilad. He had indeed earned very well for services that remained vague and mysterious. “The $3 Million Deal Between Gilad Sharon and David Appel,” the headline read.
²⁰

Gilad was described in the contract as a consultant. This arrangement had lasted until June 2001, by which time the project had finally run aground and the team working on it was disbanded. Gilad earned some $540,000.

The
Yedioth
reporters were particularly exercised by the bonus clauses in the contract. These provided that if permission was received from the Greek authorities and work was begun, Gilad would receive $1.5 million. Once the project was completed, he would receive another $1.5 million.

This was “hard to fathom,” the
Yedioth
team wrote. Gilad’s “consultancy work,” which
Yedioth
anyway ridiculed (he was thirty at the time, had a degree in agriculture, and had scant experience in business and none in tourism), was ostensibly connected with marketing to tourists, not lobbying governments. “On the face of it, he lacks
any qualifications for persuading the government of Greece … to provide the requisite licenses. But Ariel Sharon—who lives at
Sycamore Ranch, to which all the moneys in the contract were paid—he is very well-known all over the world. Even as leader of the opposition …”

The next day, January 4, the Meretz MKs
Yossi Sarid and
Ran Cohen formally requested the police to investigate the Sharons. “The Sharon family is a pretty good business,” the sardonic Sarid observed. “Thousands of firms around the country are folding, but they’re turning over millions.”
Yedioth
cited unnamed “sources familiar with the case” who said that a police investigation had in fact been conducted and the recommendation was “to indict everyone involved in the affair.”

After another day of dwindling poll figures, Sharon himself reacted, trying to reduce the flames and to direct them against his political rivals. “This publication about Gilad is very serious, and it makes me very angry,” the prime minister said. “The only reason for publishing the story anew at this time is to hurt me. It’s all political. These stories are intended to divert the public’s attention from the crucial issues of security that should be at the top of our national agenda.”
²¹
Three days later,
Cyril Kern soared out of anonymity to the top of the national agenda.

Sharon and the Likud were in real trouble. The gap with Labor narrowed to just three seats—twenty-seven against twenty-four.
²²
The election, from a virtual shoo-in, was suddenly wide open. Labor strategists were striving mightily to lump together all the unsavory characters and stories highlighted by the Likud faction primary with the leader himself in one sinkhole of corruption. Labor’s election broadcasts took their inspiration from
The Sopranos
. Sicilian
music played in the background as “Sharon and his sons” were shown whispering furtively. It looked as if this might just succeed. Panic began to lap at the Likud campaign.

Sharon, at his best when others panicked, shut himself away in his study at the ranch. He summoned his adman friend Reuven Adler; his Israeli election strategist, Eyal Arad; and his American strategist, Arthur Finkelstein. Together they laid on a “simulation” of the toughest press drubbing imaginable. Sharon parried with vigor. Adler urged him to counterattack from the outset. He was being framed by his political foes. (The state prosecution service was long seen on the right as a last redoubt of the leftist “old elites.”) They were out to wrest power by subterfuge. That’s what he should say. The others agreed. Sharon sat on alone into the night, preparing the opening statement that he would deliver the following evening, January 9, at the press
conference to be broadcast live on prime-time
television from his office in Jerusalem.

The statement, as it turned out, was a stunning success, one of the most salient in his career. He did not have himself to thank for that, but, ironically, a justice of the Supreme Court. He began with a searing attack on Labor, which was

Everything was done legally, Sharon insisted, and there were documents to prove it. Gilad earned very well, and he was proud of him, he declared, in reference to the renewed Greek island revelations. As for
Cyril Kern, he was a dear friend of fifty years’ standing. “He never asked for anything, and he never received anything. He’s got no business interests in Israel; he never has had, and he never will have. But he loves us … Look what you’re doing to him just because he’s my friend. So Gilad took a loan from him, which he afterward repaid and paid tax on it. So what? Is that bribery? Is that illicit benefits? What is this? Have you gone completely mad?” Here Sharon brought his fist crashing down onto the desk. “He is a lover of Israel … What are you doing to him?!”

By this time Sharon was shouting into dead cameras, though he did not know it. The justice of the Supreme Court
Mishael Cheshin, who had been appointed election commissioner for the upcoming general election, ordered the three television channels to pull the plug on the prime minister on the grounds that Sharon was electioneering rather than merely answering the allegations against him. Under Israeli law, electioneering on radio and television during the weeks immediately preceding an election is strictly regulated. The parties are allocated TV and radio time for their official election broadcasts in proportion to their numerical strength in the outgoing
Knesset. Other than that, the media must keep candidates off the air—unless they’re not talking
politics. Sharon was supposed to have been talking forensics; when he digressed, Cheshin silenced him.

Probably, this split-second decision by a judge known for his tempestuous disposition decided the outcome of the election. Sharon railed on for another ten minutes, and then his aides answered questions from journalists. The full proceedings of the press conference were duly reported in the newspapers the next day. A close parsing of them left many questions unanswered. But that didn’t seem to matter anymore. What remained etched in the public mind was that Sharon had been shut up when trying to defend himself. His accusations against his political opponents hung in the air. The darkened screen was the most memorable image. Its effect on the voters was immediate. That same night, the Likud began picking up ground again, and Labor receding.