by Simon Shiffer and Nahum Barnea
The knot around the Bank of China (“BOC”) case gets complicated: now two letters are placed with Netanyahu, from two powerful countries, and one is in complete contradiction to the other. Yossef Chechanover was asked to reach a compromise, unsuccessfully. The Prime Minister needs to decide to whom he will turn his back: on his American allies, or his Chinese host.
Netanyahu learned a lot of things during his years in politics, but one lesson he didn’t manage to learn: there are no free meals; certainly not Chinese meals. New dramatic developments in the BOC case question crucial national security and state interests of Israel. Netanyahu, who is responsible for giving conflicting promises to the Chinese government, to his right-wing American friends, and the US court, is personally involved in this case.
When Netanyahu returned to office for the third time he set a goal in the foreign affairs area: an upgrade in the relationship with China. In his vision, he saw big Chinese corporations build the country, the roads and cities that will decrease housing prices. He believed that with his influence, China will disconnect itself from Iran. He announced that China and India will be the markets that will replace the European Union as the main destination for Israeli export and Israeli know-how, and thus Israel should not be worried about the European boycott of the settlements. He gave his visit in China in May this year major significance and was willing to pay a heavy moral price for the Chinese invitation.
All this blew up in the last weeks. An angry letter from the Chinese government is placed on the Prime Minister’s desk, alongside a polite letter, but not less threatening, from the head of foreign affairs committee of the American Congress.
On Thursday, October 3rd, the head of the foreign affairs committee of the American Congress, a senior member of the Republican Party, sent a personal letter to Netanyahu: “Dear Prime Minister, I am writing to ask, with all due respect, your assistance in the global fight against terrorism, a mutual fight of ours. I ask that you will allow the US legal process of the Wultz vs. BOC lawsuit to advance in due course”.
Daniel Wultz was murdered in a terrorist attack in Tel Aviv in 2006. He was 16 when he died. His father was injured in the bombing. Later, officials in the Israeli homeland security system connected with the Wultz family. They explained to them that as part of the Israel’s fight against terrorism, it tracks down the monies that are secretly transferred for the purpose of funding terrorist attacks of Palestinian organizations. Among others, it was discovered that a Palestinian network based in China is laundering money and transferring them to the PIJ and Hamas in Gaza. Israeli homeland security officials approached the Chinese in an attempt to convince them to shut down the bank accounts. Meetings between senior Israeli homeland security officials and their Chinese colleagues took place. They were presented with several accounts numbers and copies of wire transfers. The Chinese were courteous but did nothing.
Banks that were transferring terrorist money, as well as banks that were in business with Iran, are exposed to lawsuits in the US since the international banking clearance is located in NY. Officials in Israel encouraged in the past filing lawsuit against foreign banks in NY and other jurisdictions in the Western world. For this purpose, a non-profit association, “Shurat Hadin,” was formed. Israel supplied this non-profit association with documents, and in some cases instructed its officials to give depositions or to testify in court with respect to the acts and failures of the banks.
The Wultz family hired the services of Darshan-Laithner and, at a certain point, choose to hire instead, Boies Schiller, one of the largest law firms in NY. Uzi Shaya, former homeland security official, was supposed to testify in court and to present the incriminating information. So was promised to the family and some of Israel’s important friends in Washington. The most important of them is Eric Cantor, the Republican House Majority Leader in the American Congressman, who is the cousin of Sheryl Cantor-Wultz. Cantor is active in this matter behind the scenes.
The expectation in Israel was that the Chinese would get scared and reach a settlement outside of the court. But the Chinese, as Chinese are: they hired an expensive law firm in NY that lined up for them tens of lawyers. In court, the BOC firmly denies it knew that accounts (17 in number) were involved in funding terrorism and that Israel has ever asked to shut them down. Maybe Israel asked another official in China but China is a large state.
The same time, the Chinese made sure that the Palestinians shut down those accounts. When Netanyahu was asked to visit China, they made it clear to the Israeli ambassador in Beijing, Matan Vilnai, that Netanyahu will be allowed to visit only if he commits to hinder the lawsuit in NY, i.e., prohibit any government employee, in the future or in the past, to testify. Netanyahu so committed.
In May, Netanyahu went with his wife and kids to China. The visit was very photogenic. The future looked bright: the case in NY and the contradicted commitments that were provided in that respect looked further away than ever.
But NY did not fail: BOC’s lawyers notified the court in NY that they have Israeli government’s commitment that none of the employees or former employees, would testify in court. Without the testimony, the case can just be closed. The judge wrote to the Ministry of Justice in Israel requesting clarifications – what does Israel intend to do? The international division of the Ministry of Justice replied in the standard form of all prosecution letters: we are discussing the subject. We have not made up our mind. The judge asked when you will make up your mind and received another vague answer.
In September, Uzi Shaya was on a business trip to Washington DC. Wultz’s lawyers approached the court and got a subpoena in his name. One night, a representative of the law firm and a messenger knocked on his hotel door and served him with the subpoena. “You are hereby ordered to appear in the Federal court in New York on November 25.” Should he not appear as scheduled, he is expecting to be arrested once on US soil or be extradited.
The head of the foreign affairs committee of Congress wrote to Netanyahu, “As you know, Uzi Shaya, a former employee of the Israeli government, is a key witness in this case. I understand that Mr. Shaya is willing to testify … Daniel Wultz’s parents wrote you a letter last year in which they asked that the Israeli government continue to assist with all its power to the lawsuit. We hope that the legal procedure in the US will continue in due course and allow the Wultz family to get the justice they legally deserve.”
On September 27, the judge wrote another letter to Ayelet Levi, the Deputy State Attorney: “In light of Mr. Shaya’s subpoena, I ask to know what the timeline is for the Minister of Justice’s answer to my question regarding his appearance in court.”
She also asked to know if an Israeli official is intending to appear in court and explain why Israel is preventing Shaya from testifying.
Wultz family’s lawyers are threatening to call all the Israeli officials who were involved in this matter to testify, among them, Netanyahu’s state affairs adviser and future ambassador to Washington, Ron Dermer, the current ambassador, Michael Oren, Dani Arditi, Shalom Matalon, Udi Levi, Nitzha Deshen-Leithner and more.
“The best show in court is the lawsuit against China” said one of the lawyers in NY. “The second best show will be the witnesses from Israel.”
Threats are not only made on the American side. There are now made also by the Chinese, who are very unpleased that the Israeli government is not formally announcing the cancellation of the testimony. In China, dilemmas of this kind have simple solutions: the witness just disappears or is sent forever to a work camp.
The news about Shaya’s subpoena alerted the Chinese. They were also alerted by an article in Haartz that pointed to additional cases where the Chinese assisted terrorism.
Following the news, the Homeland Security Committee in the Prime Minister’s Office sent the Chinese a letter that said in essence that we did everything we could to fulfill our commitment that there will be no testimony. However, once the US court issued a subpoena, the matter is no longer in our hands. Shaya is a private person and can act as he deems fit.
The Chinese replied with a letter addressed to Netanyahu, personally. According to information in our hands, the letter says: “you committed that no employee, in the present or in the past, will testify. The commitment enabled your visit in China. The Chinese expect you to honor your commitment.”
Vilnai reported to Jerusalem that the Chinese are furious and might take actions. On the line are not only economic projects but also national security cooperation between the two countries which have improved dramatically recently.
A few weeks ago, the phone rang in Lee Wolosky’s office. Lee Wolosky is a senior lawyer in Boies Schiller, the law firm representing the Wultz family in the lawsuit in NY. “Hello” said the voice on the other side, “I’m Yossef Chechanover. I was asked by Netanyahu to find a solution to the BOC case problem.” Chechanover is one the senior lawyers in Israel. He was the general manager of the Ministry of Defense and Ministry of Foreign Affairs, headed several inspection committees and was appointed by Netanyahu to settle the crisis with Turkey. Chechanover is a pleasant man, positive and optimistic. A line of prime ministers and senior ministers have approached him to rescue them from trouble, personal as well as national. It didn’t always work.
They met in New York. Chechanover presented his mission. The plaintiffs in NY got the Israeli government into a dilemma. On one hand, the fight against terrorism and the commitment to the family, and on the other hand, the relationship with China. Will the family and the lawyers be willing to consider a settlement outside the court? Lee Wolosky replied that they would be willing to consider a settlement. The settlement must be based on following: the first, an appropriate financial arrangement; the second is a confession by the BOC that it held accounts used by terrorist organizations; and the third, is a commitment by the bank to not handle accounts like these in the future.
Chechanover promised to check. According to the American side, to this day, he has not returned with an answer. The Americans are convinced that this is because the Chinese are absolutely not willing to accept any responsibility. It is possible that they fear additional claims or suits based on their confession, or they are simply Chinese, and as a powerful county, are not accepting orders from foreigners?
The Israeli government and its organizations have solved in the past, even recently, problems like these using money. In this case, money will not solve the problem because the Wultz family has a different agenda, because of the involvement of US political officials who hate the Chinese even more than they love Israel, and also because Darshen-Lithner has filed tens of additional claims in another US court building off of Shaya’s promised testimony. Should they try compensating everyone, there will be a big scandal in Israel.
A few weeks ago, former head of the Mossad, Meir Dagan, gave a lecture to the employees of Iscar factories in the north. Dagan invited questions from audience. One of the questions was if he will be willing to testify in BOC case in NY.
Dagan is one of the four fathers of the international effort to prevent money laundering and money transferring to terrorism organizations. His answer was straightforward. “Netanyahu gave up on the lawsuit so he could go to China. I am willing to testify in court anytime.” Dagan can testify on the Israeli policy. Uzi Shaya can tell about the Chinese conduct in this matter firsthand. He is now in a trap: the US justice system is threatening an arrest should he not testify; the Israeli system is warning him that if he testifies, actions will be taken against him but refuses to officially prohibit him from testifying not to be accused that it abandoned its life work – the fight against terror.