Shari Arison is the richest woman in Israel (she lives mostly in Miami, but retains Israeli citizenship), worth $7-billion. She leads a family business inherited from her father, Ted, who founded the Carnival Cruise Lines. She heads one of the 18 Israeli oligarch families, which together own 60% of the nation’s equity capital. Because of this, Israel has the fifth greatest disparity between rich and poor among all OECD nations. During periods of social protest, Arison and her fellow oligarchs are often pointed to as emblems of tremendous wealth and a corrupt financial system.
Arison’s Bank Hapoalim, the nation’s largest privately-owned financial institution ($100-billion in assets and 12,000 employees), has endured a period of financial crisis and conflict with regulators, as it was forced to satisfy more stringent capital requirements under Israeli financial reforms. Arison has searched long and hard for buyers to rescue her position in the bank. Over the past year, she identified several parties interested in buying a stake in the bank and her other investment funds. Within the past month, three funds signed memoranda of understanding, taking a $930-million (a different report values the stake at $800-million–the price depends in part on the value shekel in relation to the dollar) stake in one of Israel’s largest banks.
Bank Hapoalim is a complicated and controversial investment. Besides the regulatory issues it faces, it is also deeply implicated in the Israeli Occupation. It owns numerous branches in Israeli settlements and funds residential and commercial mortgages beyond the Green Line. In doing so, it not only lends money, but accepts the Palestinian land and settlement housing it finances as collateral. If an investor defaults, the bank becomes the owner of this property, essentially stolen land to begin with.
In addition, the Bank serves as a clearinghouse for Palestinian banks and provides services to them at a steep price. The funds which the Palestinian institutions must deposit with Bank Hapoalim to guarantee these services are steep and earn no interest. This is captive banking which constitutes a form of financial Occupation.
Thus, the Bank both benefits from, and sustains the Occupation. As such, it has come under pressure from BDS activists both inside and outside Israel who target such Israeli companies. Denmark’s largest bank and the United Methodist Church have divested themselves of the Bank for that reason. The Danish company explained that Hapoalim was ““involved in activities in conflict with international humanitarian law.”
That probably explains why at least one of the buyers of the new stake has refused to identify itself. There are two known participants: the University of California Retirement Plan, which investments the pension contributions of thousands of UC professors and staff. Maariv only identified the second as a Canadian academic pension fund. I’m guessing it’s the Ontario Teachers Pension Plan, which is the only pension plan I’m aware of in Canada dedicated to teachers. I’m trying to confirm this with the reporter who wrote the Maariv story. I’ve also approached each company for comment on their purchase of the Bank and the ethical issues it raises.
The reporter did not know who the third investment fund was. Both Israeli and Canadian regulators permitted this part to remain secret. Writing in Maariv, he noted how problematic this decision was:
It’s important to note that revealing the name of investors in such a significant business transaction is critically important. The wider public may have significant information it can add regarding the business activities of parties to the deal, who will be taking control of the Bank. This information can help in examining the suitability of the new partners in the deal.
None of the English-language media coverage of the story identified any of the participants in the deal, which I found strange. But one factor was noted in these reports: none of the new investors have previously sunk any significant sums into Israeli deals. Though the reporter doesn’t specify the significance of this, there is a nationalist dog-whistle in the comment. Israelis know they are facing a worldwide boycott. When they can persuade mutli-billion-dollar international investment funds to invest in Israel it is a way to break the boycott. It isn’t just a financial investment; it is a national victory against Israel’s enemies (at least in the eyes of the average Israeli).
This may explain the purpose of shielding the identity of the third party: making this investment is controversial. It will arouse the ire of the international BDS movement. Hundreds of companies which have made such prior investments have faced shareholder unrest and a world-wide campaign to divest their Israeli holdings. It’s likely this party anticipates such controversy and is seeking to quell it. That’s all the more reason to pressure the Canadian financial regulators to reveal the information to the public. Major international financial deals must be transparent. Secrecy and opacity only benefits those who have something to hide and constitute bad financial management.
It’s ironic and tragic that two pension funds representing the professors and teachers of Ontario and California are supporting Israeli economic apartheid. Educators serve our children and teach them. They are role models and embody values in their teaching and their lives. They study society and examine its problems. Their research and analysis suggest methods of improving society and addressing its ills. So how is it these two funds prop up a rotten Israeli system of Occupation and oppression of Palestinians?
I urge Canadian activists and business journalists to examine this business transaction and bring it into the light of day. As an aside, Bank Hapoalim maintains branches in both Canada (Toronto) and California (Los Angeles), where their new owners are based.
This list of oligarchs has been out of date for a long time.
Some of them are on their way to jail or were declared bankrupted.
A source from 7 years ago is hardly a source.
@ Shahar: for us to believe that anything significant had changed in reference to 18 families we’d have to believe Israel has fundamentally altered its oligarchic financial system permitting control of vast amounts of wealth in a tiny sliver of the population. As this hasn’t happened, your complaint is irrelevant. Nor did I give a “list.” I merely mentioned there were 18. If you wish to dispute the number you’re welcome to provide support for your claim.
And just because an oligarch goes to prison doesn’t mean he stops being an oligarch. Unless you’re claiming that the prison sentence also strips all of his assets. Are you claiming that?
No. What I’m ‘claiming’ is Dankner, Ziser and Fishman are bankrupted and that Dankner is probably facing jail time.
@Shachar: some oligarchs go & others take their place. Does it make a substantial, or even any difference regarding the larger & more important issue, which is the fundamental feudal, vulture capitalism nature of Israel’s economic system?
@Richard Silverstein
Is it illegal, under international law, to finance settler expansion in the West Bank?
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A case now before the US Supreme Court, Jesner v Arab Bank ( https://www.justsecurity.org/45509/jesner-guide-blogosphere/ ) might make quite a difference to Hapoalim Bank. This case will establish whether alines (non-USA citiaens) may sue corporations in USA courts for violations of (I suppose inter alia) international human rights laws. Imagine Palestinians who are not USA citizens suing (among others) Hapoalim Bank for supporting the (international law-violating) occupation.
Well, perhaps the US S/C will rule that corporations cannot be sued. We must wait to see.
“Imagine Palestinians who are not USA citizens suing (among others) Hapoalim Bank for supporting the (international law-violating) occupation”.
Even if SCOTUS allows aliens to sue corporations, Palestinian plaintiffs would have to surmount several hurdles in order to have their day in Court. They would have to prove Article III ‘standing’, and they would have to overcome the ‘political question’ defense.
As a retired UC prof I am interested where I can object if my retirement money is invested in backing the theft of WB Palestinian land? This sounds explosive. Perhaps I could do my part in combating Israeli apartheid.
There is a link in my post to the UCRP website. Look there for a link to communicate directly with the staff. You might also communicate to the board of directors of the Fund or the UC Board of Regents.