Court Approves Sale of Three Strategic E. J'lem Buildings to Right-wing Jewish Group

Ateret Cohanim is awarded possession of the properties purchased from the Greek Orthodox church in a long-disputed sale in which the church alleged bribery was involved

The Imperial Hotel, left and the Petra Hotel in the background
The Imperial Hotel, left and the Petra Hotel in the background. Emil Salman

The Jerusalem District Court approved an agreement Sunday for the purchase of three buildings by the Ateret Cohanim Association from the Greek Orthodox church. The court’s approval of the long-disputed sale, which makes Ateret Cohanim the owner of the buildings in strategic East Jerusalem locations, is considered a victory for the right-wing Jewish organization.

The large size of two of the buildings, the Petra and the Imperial hotels near Jaffa Gate in the Old City, will allow Ateret Cohanim to expand its activities considerably there. In 2005, when the agreement between the Greek Orthodox patriarchate and Ateret Cohanim came to light, it set off an unprecedented firestorm in the Greek Orthodox Church, which eventually led to the dismissal of Patriarch Irenaios.

Assets transferred to Ateret Cohanim

Irenaios refused to accept his dismissal and since then has holed himself up in the patriarchate in Jerusalem. His successor, Theophilus III, waged a legal battle against Ateret Cohanim in an attempt to void the sales. The court rejected the patriarchate’s claim that the sales were the product of corruption in the patriarchate at that time and that Ateret Cohanim had bribed patriarchate employees.

The three sales contracts were signed in 2004 when foreign companies registered abroad, Gallow Global, Berisford Investments and Richards Marketing Corporation, which are all associated with Ateret Cohanim, purchased lease rights to the buildings for a period of 99 years. The Petra Hotel is a four-story building, and the Imperial a two-story structure. The third building, called the Moazamiya, is located in the Muslim Quarter and is inhabited by a Palestinian family. The management of the hotels and the Palestinian family are now expected to face legal proceedings from Ateret Cohanim in an effort to evict them.

The agreements were signed by representatives for the parties – Eitan Geva, a lawyer for the buyers, and Nicholas Papadimas, the patriarchate’s chief financial officer. News of the transaction in the Maariv daily, reported by journalist Kalman Libeskind, began the process that led to Patriarch Irenaios’ historic dismissal. Four years later, the three companies filed suit to force compliance with the agreement. The patriarchate, through lawyer Ofir Blum, claimed that the CFO, Papadimas, was corrupt and had sold the property as part of a bribery arrangement. The patriarchate claimed that Papadimas had come into a great deal of money and had fled the country a short time later. The church also alleged that he was subsequently involved in other criminal activities.

Among the evidence the patriarchate submitted to the court at that time were recordings of Papadimas and the head of Ateret Cohanim, Mati Dan. In one recording, Papadimas is heard telling Dan that Dan had promised him money. Dan did not deny this, but said that the money was to be paid when the tenants in the buildings subject to the sale are removed.

Ateret Cohanim claimed that the tape had been edited and was not admissible, an argument that the judge, Gila Kanfy Steinitz, accepted. She criticized the plaintiffs for choosing not to have Dan testify himself, saying that “not having him testify raises the suspicion that this was intended to prevent his exposure to cross-examination and to hide certain facts from the court.” But under the circumstances, she wrote, no conclusions could be drawn from the fact that Dan did not testify.

The patriarchate had also tried to argue that the price paid for the buildings was suspiciously low – $500,000 for the Petra Hotel, $1.25 million for the Imperial and $55,000 for the building in the Muslim Quarter. However, the judge accepted Ateret Cohanim’s response that the price was not particularly low considering that the buildings were occupied by people who have the status of protected tenants, meaning that it would be difficult to evict them.

The judge also noted that the purchase price had been paid in full, that no attempt had been made to return the money and that the patriarchate has not questioned any other transactions involving Papidamas and Patriarch Irinaios. She concluded by stating that the patriarchate “had not proven a sufficient factual and evidentiary foundation that the transactions were based on bribery or that they were faulty in any way.”

The Associated Press published a response by the Greek Orthodox Church denouncing the court’s decision. Patriarch Theophilus said he would make every legal and financial effort to void the sales. A source at the patriarchate told Kalman Libeskind, who first reported Sunday’s verdict in Maariv, that the patriarchate would be appealing the district court ruling.

Patriarch Theophilus is also facing intense criticism over the sale of church land in West Jerusalem to Israeli companies.