Arik - The Life Of Ariel Sharon (77 page)

The vote was ominous. It showed that Netanyahu, though down, was by no means out. It showed, moreover, that the hard core of the party, despite Shani’s and Omri’s efforts to bring in new blood, continued to balk at Sharon’s relative moderation. He was popular among the general public and among the Likud rank and file, as the leadership primary had shown. But the Likud Party activists were not, in the main, his political supporters and probably never would be.

In Labor, the leadership primary had produced a revolution. Binyamin Ben-Eliezer’s dramatic secession from Sharon’s government failed to convince a dispirited membership looking for fresh, untainted politics.
Amram Mitzna, the bearded, soft-spoken ex-general and popular mayor of Haifa, took the party by storm. A man with no experience in national politics, who had never served in the Knesset and never held cabinet office, would now lead them against the battle-hardened Sharon.

It was not the
first time the two men had crossed swords. Mitzna was the highest-ranking officer to resign in protest at the then defense minister’s running of the Lebanon War. His resignation was brief, but it gave him momentary fame. He was back in the public eye in 1987–1989 as CO of Central Command during the first intifada, often sparring with the West Bank settlers. Sharon had objected to his promotion to general. Now, though, their roles were different. “I don’t bear a grudge, and I’m not vengeful,” Sharon told reporters. “It’s not a question of relations between two lovers. It’s a matter of policy and politics.”

Mitzna, determined not to be sweet-talked into passivity, insisted, “It’s the same Sharon, the Sharon who misled the government and the nation in the Lebanon War. He hasn’t changed, even if he looks like a dear old granddad.”

Sharon proposed to found the policy of his new government after the election—another unity government as broadly based as possible, he promised—on President Bush’s blueprint for peace first articulated on June 24 and subsequently elaborated in the yet-unpublished
road map. In the traditional prime minister’s lecture winding up the annual
Herzliya Conference on national security, Sharon provided a somewhat airbrushed picture of the evolving road map. He detailed the many constitutional, administrative, financial, judicial, and above all sweeping security reforms that were required of the Palestinians and skated over the steps that Israel would be required to take. He insisted that the Palestinians would have to make progress on their reforms first, before Israel moved at all.

But he did spell out the two subsequent phases in the road map: a Palestinian state with temporary borders, and then peace negotiations over final status and permanent borders. He made it clear that as long as he was in charge, it wouldn’t happen fast. But he also insisted that he was committed to the process. He was at pains to persuade his audience of his sincerity: “My long-standing ideological and political beliefs are well-known to you from the many positions I was privileged to fill during my decades of public service. These [new] decisions are
not easy for me … However, I have come to the conclusion that in the present regional and international reality Israel must act with courage to accept the political plan which I described. There are risks involved, but also enormous opportunities.”
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A year later, on the same dais, he would shock the world by putting tangible content into those vague but intriguing words.

Mitzna, in his lecture to the same forum, challenged Sharon’s vagueness and urged a concrete and specific separation plan. The Gaza Strip should be evacuated unilaterally and urgently, he said. In the West Bank, Israel should seek agreement, but if it proved unattainable, then settlements must be dismantled unilaterally there, too, he said. To this Sharon replied repeatedly during the campaign that his rival was “sowing illusions.” Unilateral decisions could not produce a solution, he asserted. “Any unilateral withdrawal or unilateral separation without an agreement means serious disaster for Israel.”
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Happily for Sharon, many middle-of-the-road voters refused to believe him. “Most of the public back Sharon to carry out Mitzna’s policy,”
Haaretz
wrote, reporting the findings of an opinion poll. “Without reference to the election results,” the pollster’s question read, “if it proves impossible to reach a negotiated agreement, would you support or oppose unilateral separation, provided Israel could keep the settlement blocs and a solution were found for Jerusalem?” Fifty-eight percent said they would support it. “And here’s the even bigger surprise,” the reporter
Yossi Verter added: “The same results were registered among Likud voters [as among the public at large]. This is the paradox that
Amram Mitzna needs to think about: the majority of the public clearly supports his plan for unilateral separation, but the majority of the public will vote for Sharon, in the hope that he will implement Mitzna’s plan.”

On New Year’s Eve, Sharon’s sense of quietly cruising to victory was rudely disturbed. Press reports linked some of the new faces in the Likud’s Knesset list to powerful but shady families whose business affairs were close to criminality and whose influence would now extend to the national legislature itself.

The
police, prodded by the
media, began investigating. When they decided to pounce, though, it was on a relatively harmless piece of political pork, allegedly perpetrated by a veteran and thoroughly respectable MK,
Naomi Blumenthal, the deputy minister of national infrastructures. A onetime theater star now married to an eminent eye surgeon, she had invited a group of key central committee activists to Tel Aviv on the night before the central committee vote and put them up in a city hotel at her expense. For this infringement of the election
finance rules she was arrested. Blumenthal refused to cooperate with her police interrogators, citing “the right to remain silent.”

Ill-advised by his image artists, Sharon now committed an ignoble act of hypocrisy that earned him scant public approbation and would quickly come back to haunt him. He fired Naomi Blumenthal. Not only did she not have the right to remain silent, he wrote to her prissily on December 31. She had “an absolute duty to disclose the circumstances surrounding her election.” He could not dump her from the list—she had been duly elected—but he sacked her as a deputy minister. This even though she had not, as yet, been prosecuted. She shot back a lawyer’s letter denying his right to interfere in her legal process.

The thinking among Sharon’s advisers was to distance him from the sleazy imagery projected by the Likud primary and to portray him as a leader of national stature sternly committed to the rule of law, in defiance of seedy party machinations. This supposedly sophisticated strategy sat uncomfortably with Sharon’s long chronicle of close scrapes with the law. It became risibly irrelevant a week later, when
Haaretz
broke the story that quickly became known as “the
Cyril Kern affair” and mushroomed into a gray cloud that hung over Sharon for the rest of his life.

The prime minister and his son Gilad, wrote the paper’s police reporter, Baruch Kra, were suspected by the state prosecution service of receiving bribes, of fraud, of breach of trust, and of lying to the state comptroller and to the police. Omri Sharon was believed to be involved, too, Kra wrote. The state prosecution had specified all these allegations in an official document sent to the government of
South Africa asking permission to interrogate a man named Cyril Kern over his role in the affair. The document was in
Haaretz
’s possession.

T
he Cyril Kern affair did not drop onto Sharon—or onto the Israeli electorate—out of the clear blue sky. Trouble had been brewing for Sharon for more than a year as investigators, first from the state comptroller’s office, then from the police, trawled through the accounts of his September 1999 primary campaign for the leadership of the Likud. He had raised and spent far, far more than the law allowed and done so, moreover, through a shadowy network of front companies created specifically to facilitate, but at the same time to conceal, the flow of funds from Sharon’s American supporters to his campaign managers.
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The Cyril Kern affair was a much uglier mutation of this earlier, multi-tentacled creature that was already being dubbed “the
front companies affair.”

The saga began back in March 1999. Netanyahu was about to lose the prime ministership to
Ehud Barak, and Sharon, while publicly demonstrating support for the sinking Netanyahu as his loyal foreign minister, was at the same time preparing for his own bid for the Likud leadership and perhaps, eventually, for the prime ministership. It was against this backdrop that Sharon’s longtime lawyer and adviser Dov Weissglas, on March 3, 1999, set up a company in Tel Aviv named
Annex Research. Annex’s goals, as described in its articles of association, were “to work for the inculcation and advancement of democratic principles in public, party-political, and rural life in Israel; to initiate educational activities aimed at imbuing young people and adults with democratic values and the culture of good government; to encourage foreign investments in Israel.” “There was nothing,” as a judge was later pointedly to note, “about Annex handling contributions and expenses for Candidate Ariel Sharon’s primary campaign.”
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In fact, though, that was Annex’s sole purpose. Weissglas had set it up on behalf of Yoram Oren, an Israeli living in California who had long been a key fund-raiser in the United States for the Likud and for Sharon. Oren instructed Weissglas to transfer the shares in Annex to four U.S. citizens. In August, a month before the primary, Omri Sharon asked Weissglas to install his schoolroom friend and army buddy Gabriel Manor as CEO of Annex. Annex’s official address became Manor’s home.

Suddenly, the hitherto dormant company sprang to life. A total of $1.5 million poured into its bank account, mainly from three nonprofit concerns in the United States: the American Israel Research Friendship Foundation, the
Center for National Studies and International Relationships, and the College for National Studies. And all of this money, about six million shekels in Israeli currency, poured out again, on Omri’s orders and over his friend Manor’s signature, in payments for the primary—to political strategists, to a pollster, to a security firm, to public-relations experts, and to a legion of campaign workers who all had a part in Sharon’s victory in the primary on September 2. The three American foundations were run by two executives who—“what a coincidence,” the same caustic judge was to write years later—were among the four shareholders of Annex. The various service providers were asked by Omri to make out their invoices and receipts to Annex, for services ostensibly rendered to Annex, not to the Sharon campaign, their true client.

Under the Parties Law, the candidates in the Likud leadership primary were limited to raising and spending precisely 826,726.50 shekels.
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Candidates in primaries were required, moreover, to file detailed
returns after their campaign to the party’s supervisory board, which in turn would publish them and send them on to the registrar of parties. In November 1999, Sharon’s campaign filed meticulous returns showing how it had raised the modest sum of 139,776 shekels and had spent 972,396 shekels, just a little above the legal limit. The documents were prepared by the campaign’s accountant, and Sharon himself signed them, as the law required. They were entirely true insofar as they went. Only they failed to mention the other 6 million shekels.

When State Comptroller
Eliezer Goldberg, in his routine examination of the 2001 prime ministerial election, alighted on the missing 6 million, they naturally piqued his interest. He determined that of 5.9 million shekels actually paid out by Annex, 1.2 million had been paid for services provided to Sharon
after
the primaries, when he was already chairman of the party. That left 4.7 million that had gone for Sharon’s primary campaign—almost six times as much as the law allowed and forty-two times as much as Sharon solemnly attested in his official return to have raised. When questioned about this, Sharon informed the state comptroller, after consulting his lawyers,
^h
that he would repay the whole 4.7 million immediately from his own pocket.

Sharon could have dragged his feet. He could have put up arguments about the sums raised and the sums spent and gotten into a long sparring match with the authorities over the facts and figures. His zeal to pay up was apparently intended to underscore, to Comptroller Goldberg and through him to the entire Israeli public, how dumbfounded and humbly contrite the prime minister was about the whole business. Sharon assured the comptroller that he, the candidate, had taken no part whatever in the running of the money side of his primary campaign. He had left all that to his son Omri, leaving himself free to focus on the politics.

Comptroller Goldberg chose not to comment on the plausibility of this depiction. He wrote that Omri was “clearly in total control of Annex’s expenditures; the CEO played merely a formal role and signed the checks.” Omri for his part, Goldberg noted, had “refused to answer the state comptroller’s questions about Annex and about
the companies which transmitted funds to it, on the grounds that he did not wish to incriminate himself and on additional grounds (not entirely relevant) that ‘he did not wish to hurt others.’ ” Omri’s noncooperation with the comptroller in his investigation of the “front companies affair” explains the howl of outrage that went up a year later when Sharon peremptorily fired the popular Blumenthal for doing precisely what Omri had done: she exercised her right to remain silent.

The
Cyril Kern affair took up from where the front companies affair left off. The state comptroller’s report was published on October 1, 2001. Three days later, on October 4, in keeping with his expansive pledge to repay the errant 4.7 million shekels, Sharon sent a check to Annex for 500,000 shekels from his personal account. His sons, Omri and Gilad, now set about finding the wherewithal to cover the rest of their father’s commitment. On October 22, 2001, Gilad took a loan of 4.2 million shekels from the branch of Bank Leumi, a large, nationwide bank, in the sleepy little town of
Sderot, near Sycamore Ranch.
As collateral, he mortgaged the ranch. The next day, Ariel Sharon sent Annex a check for 4.2 million shekels. A quick and elegant end, it seemed, to a potentially awkward affair.