In the late 1940s, Pinhas Levy worked as a plumber's assistant and on a factory assembly line in Haifa. At night, he slept in stairwells or in buildings still under construction. He had no friends, and his only family in the country was one brother. Levy had two dreams: to work in a bank and to be an Israel Defense Forces officer. His commanders thought he wasn't officer material and refused to send him to an officers' course. He did manage to land a job at a bank. When he started working as an account manager at the main Bank Leumi branch in Haifa, he was on top of the world.
Today, Pinhas Levy, now known as Frank Lowy, is the second-richest man in Australia, with an estimated personal fortune of $3 billion. His company, Westfield Holdings, which builds malls, is worth about $20 billion. He has 87 malls in Australia, New Zealand, the U.S. and Britain. Time magazine chose him as one of the hundred most influential people in the South Pacific, and politicians from all over the world seek him out. He is a good friend of Ehud Barak: Two weeks ago, he visited the former prime minister at his home in Kochav Yair. He was also one of president Bill Clinton's biggest contributors, and has been invited to Buckingham Palace on a number of occasions.
Lowy hasn't been in a big rush to invest in Israel. Over the years, he looked into the possibility of trying to acquire a controlling share of Bank Discount, considered building malls in various locations in the country, and thought about marketing a brand of mineral water. None of these deals came to fruition. Lowy blames the Israeli bureaucracy. In Australia, where he's considered a very tough and clever businessman, he can close a deal in one telephone call. In Israel, he has to wrangle with all kinds of petty bureaucrats, he's told friends.
Two weeks ago, for the first time in his long business career, Lowy signed a final agreement for an investment in Israel. For $95 million, he acquired about a third of the corporation that is acquiring a quarter of the shares of IDB. The deal gives him 7 percent of IDB shares.
He got to IDB through former air force commander and businessman Avihu Bin-Nun. Bin-Nun was in Australia on a fund-raising campaign. When he met Lowy, he suggested that he invest in Israel. "The deal was meant to help Israel during a tough time," says Bin-Nun. "But it was signed for business reasons. Lowy decided to get in low so he could sell high."
Fifty years after sleeping in Haifa stairwells, Frank Lowy is now a partner of the Recanati family and Bank Hapoalim in IDB, which holds stock in a string of companies, including Cellcom, Supersol, Bank Discount and Tevel.
Levy's war of independence
Lowy's Israeli acquaintances, who know him as Pinhas Levy, never imagined that this Holocaust survivor who fought and was wounded in the War of Independence would be a successful businessman one day.
"It was inconceivable," says Rafi Kotzer of Tel Aviv, who was Levy's commander in the 12th battalion of the Golani brigade.
"I never thought he'd get as far as he has," says Yona Zamir from Meitar, an army comrade. "Pinhas didn't excel at anything in particular. None of us talked about the future. We weren't thinking about money. We wanted to establish the state."
Aryeh Pollak from Moshav Hayogev, another army buddy, says, "There wasn't anything special about him, but life takes you in all kind of directions. It's hard to know at age 17 how each person is going to develop."
Lowy, 71, was born in Czechoslovakia. He was the youngest of four children, with two older brothers and an older sister. His father was a gambler who lost all his money in card games. In 1942, the family moved to Budapest. His father disappeared in 1944 and Lowy only found out by chance 40 years later just how and when he had been killed. Lowy, together with his mother and his siblings spent the rest of the war in Budapest, living under false identities. After the war, his mother, his brother, Alex, and his sister, Edith, emigrated to Australia. Lowy and his brother, John, came to Israel.
Lowy arrived in early 1947 on one of the boats that transported illegal immigrants. He was sent back to Cyprus and only allowed to enter Israel three months later. Together with a group of teenagers who had survived the war, he was sent to a religious institution, Neveh Amiel, near Tivon.
"We had tremendous motivation," says Zamir, who was his classmate there. "We were euphoric. We talked about the state that was on the way."
Jill Margo, an Australian journalist who wrote Lowy's biography ("Pushing the Limit," HarperCollins), was told by Lowy's friends in Neveh Amiel that he stood out, but wasn't popular necessarily. The girls seemed to like him, though. He was a good dancer.
Lowy left Neveh Amiel in the summer of 1947. He moved to Haifa and worked as a plumber's assistant. He didn't earn enough to pay rent so he slept in stairwells at night. The plumber had pity on him and let him arrange a corner to sleep in one of the building they were working on. Lowy covered the open windows with slats of lumber, bought a mattress and a kerosene lamp, and lived there for several months. When the building was finished, he got a job mopping the stairwells.
At the end of 1947, five of his friends from Neveh Amiel came to visit him in Haifa and told him that they planned to join the Palmach. Lowy decided to join, too.
"It was a spontaneous, voluntary act, with no questions asked," he told his biographer. "Not to be part of the coming war wasn't a possibility for me. Enlisting was the most natural thing in the world."
The six young men from Neveh Amiel enlisted and were sent to Tiberias. They were not assigned to a specific unit. Instead, they were sent with their weapons from one battle to the next. Lowy was wounded in an attack on Sajra.
"I apparently lost consciousness," he told his biographer. "When I came to, I was in bed in a hospital in Afula, staring into the blue eyes of the beautiful nurse who was leaning over me. Her smiling face is forever etched in my memory. But I guess I wasn't seriously wounded. After three days in the hospital, with my head still bandaged, I returned to the unit and continued fighting as if nothing had happened."
In April 1948, they took part in the battles in Tiberias. Pollak told Margo that the conquest of Tiberias didn't excite them that much. They had no home or family with which to share the stories and emotions. Lowy had his one brother who'd accompanied him to Israel, and he was also struggling to get by.
"We were exhausted, but we didn't have anywhere to go," Lowy related. "We knew that we'd go on from this battle to the next one. We sometimes had the feeling that there was nothing else for us."
After the group was employed for several weeks doing guard duty at Kibbutz Gesher in the Jordan Valley, Rafi Kotzer, then a division commander in Golani, brought them into the new volunteer unit for special tasks that he had just set up: "I'd heard about them. They had combat experience, and they were a very special group. I knew that they'd already taken part in battles and that they wanted to keep contributing," says Kotzer. They left Gesher in the middle of the night, led by Kotzer's messenger, Moshe Garber from Moshav Kinneret.
"We called them the `Geshera'im.' I stole them from Gesher - I got them in the car and we got out of there. That's how they joined the commando division. Most of the soldiers in the division were sabras from kibbutzim in the Jordan Valley. The combination of the two groups worked out okay, even though we should have been more sensitive to them. We had a home to go back to. They were alone in the country. We didn't invite them over enough. Communication was also difficult. Their command of the language was enough for fighting the war and for small talk, but not more," says Garber.
At his home in Tel Aviv, Kotzer still has the paper signed by the group when they joined the unit: "I, the undersigned, hereby confirm that I am volunteering of my own free will for the special unit founded to fight the enemy." The 20th signature on the list belongs to Pinhas Levy. The Geshera'im participated in many battles, including the battle for Sajra, the blowing up of the Adasiyya police station, the conquest of the village of Lubiyya and the battle for Rafiah.
"We crossed the border almost every night," Kotzer recalls. "It was all so intense. We lived with the feeling that we were founding the state." Garber remembers the Neveh Amiel group as "eager to fight. Frank didn't really stand out. He didn't have a special leadership position and he wasn't especially brave either." Lowy told his biographer that he was deeply affected by the death of a friend who was fighting alongside him. But we had to keep on fighting, he told her.
In January 1949, after two of the unit's commanders - Kotzer and his second-in-command, Danny Fromkin - were wounded, the unit moved to a rear base from whence some of them were sent to a section commanders' course and an officers' course. Lowy was disappointed not to be among them. In March 1949, he left the army and lost contact with his comrades from the unit. He moved to Haifa, lived with his brother in a rented apartment and worked at various jobs, including construction, post office clerk and account manager at a bank. He spent his Saturdays watching Hapoel Haifa soccer games. Lowy was a devoted fan of the team. When they lost, he was depressed and when they won, he was elated.
It was not until 1981 that Lowy renewed contact with his friends from the past. This happened when Ephraim Reiner, then chairman of Bank Hapoalim, came to Sydney to explore the possibility of opening a branch of the bank there.
"I had meetings with some wealthy people in Sydney, and toward the end of the visit, I met with him. I'd been warned that nothing would come of the meeting, since he had no connection with Israel. When we started to talk and I mentioned that I'd fought in Golani, he ran home and brought the Golani book and showed me the battles he'd taken part in. He promised me that he'd come to Israel and consider investing here if I found his commander from Golani, Rafi Kotzer," says Reiner.
The mission was easily accomplished. Kotzer and Reiner are good friends. "A few months later, Lowy came to Israel and I gave him a tour," recalls Kotzer. "At the end, I asked him if he was still taking orders. He said yes. I asked him to donate money for the construction of a Golani site at the Golani junction. He gave a quarter-of-a-million dollars and later added to it." Lowy also donated to the Israel Democracy Institute, Tel Aviv University, the Israel Air Force Foundation and the Israel Air Force Museum.
Since then, he has kept up his connection with his friends here. When one of his comrades from the unit ran into financial trouble, Lowy helped him out with $25,000. He gave $20,000 to another friend. A year ago, he attended a reunion of the Neveh Amiel group that was held at Pollak's home.
"We talked mostly about our girlfriends," says Pollak. "He had a girlfriend, I had a girlfriend. We talked about a lot of old memories and we visited Neveh Amiel, too. It was very emotional for him." Lowy has recently started building an apartment house in Tel Aviv. The four units in the building are for him and his three sons.
From truck-driving to real estate
In January 1952, Lowy and his brother, John, decided to move to Sydney to be near the rest of their family. On the flight, Lowy could already see that he was coming to a whole different world. In Israel, it was a time of austerity measures; on the flight, they gave out unlimited helpings of fruit. In Sydney, he first found work in a factory and later in a sandwich bar. After that, he worked as a truck driver, distributing goods to food shops. In 1955, together with a friend named John Saunders, who was also a Holocaust survivor, he opened a small food shop in Blacktown, a Sydney suburb. Ten months later, they opened an espresso bar, too. Both businesses thrived, but Lowy and Saunders had bigger ambitions.
In 1958, they started making real estate deals in Blacktown. They netted a profit of 8,000 pounds sterling on their first deal. When a contractor built a shopping center in the area, they decided that they would do the same thing, only better.
They founded the Westfield Company and in June 1959, opened their first shopping center - Westfield Plaza - in Blacktown. At the grand opening ceremony, Lowy spoke in a heavy foreign accent. "I was surprised that anyone understood me," he told his biographer. He had been conversing with Saunders in Hungarian all this time. Most of their senior managers were Hungarian-speaking Jews. Most business meetings at Westfield were conducted in Hungarian.
The company went public in 1960. According to the calculations of Australian economists, someone who invested $1,000 in Westfield stock that year would today be holding stock worth $86 million. The public offering brought Lowy and Saunders to the media's attention. Richard Dreyfus, the financial editor of The Daily Mirror, was one of the first to write about them. In his column, he described the pair of immigrants as driving forces of the Australian economy. Lowy was eternally grateful.
In 1961, Dreyfus left the paper and went to work at a brokerage company. When he retired from that company, Lowy offered him a job as a consultant at Westfield and gave him an office right next to his own. They were close friends until Dreyfus' death in 1998.
However, in general, Lowy isn't keen on media exposure. "I don't like it," he said last week, when he declined to be interviewed. He tries hard to avoid media criticism. In March 1992, it was leaked to the Australian press that Westfield owed $25 million in taxes. Lowy tried to find out who had leaked the story, and urged his people to conclude the legal proceedings with the tax authorities as quickly as possible. Even though he thought the tax assessment was erroneously high, he paid the full amount so as not to be dragged into a public lawsuit.
In March 1994, the company had debts of $50 million. Lowy reached a compromise with the tax authorities. The Sydney Morning Herald reported that the arrangement caused great consternation among the tax auditors. They couldn't understand why Lowy wasn't punished more severely. A month later, Lowy was appointed to the board of directors of the Australian Reserve Bank. Australian journalists wondered how a man who'd repeatedly run into problems over taxes could be appointed to the board of the country's central bank. The storm did not subside that quickly.
In October 1994, a member of the Australian parliament called Lowy's appointment scandalous. Following the man's speech in parliament, Lowy feared an even more hostile backlash in the press. He was in Washington at a meeting with Yitzhak Rabin and Jewish leaders hosted by President Bill Clinton. Without telling any of his Israeli friends what was bothering him, he went out on the balcony and called the then opposition leader in parliament, John Howard, and asked him to defend him. The next day, Howard made a statement saying that he considered Lowy a good friend, and things calmed down.
Lowy attaches great importance to his connections with politicians. He met Ehud Barak through the former prime minister's brother, Avinoam Barak, who was the Keren Hayesod representative in Australia from 1981-87. They became friends and then Avinoam introduced Lowy to his brother.
"Lowy is very emotional," says Avinoam Barak. "He cares deeply about our future. In his political views, he's somewhere between Haim Ramon and Fuad [Benjamin Ben-Eliezer]. Most of our conversations are about politics. He calls me every time something dramatic happens in Israel. When [Marwan] Barghouti is really acting up, I might hear from him three times a week. He thinks it's just a question of time until a Palestinian state is established. He believes in separation. He hoped it would be possible to close a deal with them at Camp David. Now he doubts whether Arafat is a partner, but he thinks it's ridiculous to declare him irrelevant."
Jill Margo writes that Lowy is "an enthusiastic supporter of Barak's party." On election night in 1999, he flew to Israel to be by Barak's side, but he didn't make it on time. He spoke with Barak on the phone that night. He had a lot of advice for him during the election campaign and even afterward. He advised Barak to form a national unity government with Sharon instead of taking the temporary safety net offered by Shas. "In retrospect, it looks like he was right," says Avinoam Barak.
Lowy argued that there was no point in getting one's hopes up about the Taba talks. He was sure nothing would come of them. "Barak's trouncing by Sharon crushed him," recalls Avinoam Barak. "He couldn't sleep for several nights." But their friendship survived. Two weeks ago, when Lowy was in Israel to sign the IDB deal, he visited the Barak brothers in Kochav Yair.
Lowy has many connections with politicians in Australia as well. He was especially close to Bob Hawke, who was prime minister. In 1985, he invited Hawke to come sailing on his yacht, an outing captured by the paparazzi. The photo was published in an Australian newspaper and caused Hawkee a good deal of embarrassment.
Several months later, the federal government sold a large mall in Canberra to a company whose partners included Westfield. The property was valued at $100 million. Another company had bid $102 million, but it was sold to Westfield for just $87 million. Hawke said that the sale was made for business reasons only. In a conversation with Margo, Lowy explained that ties with politicians are necessary and legitimate.
Lowy maintains tight control of his company. Over the years, he has read every document issued by the company, read every letter received by Westfield and signed every check. In 1995, an article in Business Weekly Review profiled the control structure at Westfield Holdings. The paper said that the system was set up to ensure that Lowy was holding the reins. "He's the boss. He's always the boss," explained Lowy's son, David.
Lowy and his wife, Shirley, have three sons - David, Peter and Steven. They married in March 1954 and Shirley's mother wasn't wild about her new son-in-law. She complained that he was a penniless immigrant who wouldn't amount to anything. They served fish instead of meat at the wedding, to save money. In the first years of their marriage, whenever they wanted to watch television, they had to go over to the neighbors. They weren't allowed to stay there past 10 P.M., so they went back home and listened to the radio.
Lowy is close with all of his sons. They all work in the company. David was formerly the CEO of Westfield. In 1993, after he divorced and his relationship with his father hit a rough patch, he was kept out of any company activity. His absence was kept secret and not reported to the press or the financial authorities. Today he is the company's vice-chairman and is the one who put together the IDB deal. He is responsible for managing the family fortune. Peter oversees the company's business dealings in the United States. Steven runs the company in Australia, New Zealand and Britain. Until recently, David was considered his father's most likely heir. Lately, Steven has been mentioned more often as destined to lead the family in the future.
Lowy is known for his aggressive business tactics. Six weeks before September 11, he signed a 99-year lease for the commercial floor of the World Trade Center's Twin Towers. One of his first moves was to significantly raise the rents there. At a conference of the Australian Shopping Center Council in June 2001, Lowy said that rent is like tax. No one likes it, but it has to be paid.
His employees have also seen how tough he can be. A senior employee who managed to save the company $3 million when he closed a deal, came to Lowy's office, all excited to give him the news. Lowy didn't appear to be very impressed. He scolded the employee for not trying to save even more money on the deal. The signing of major deals are not turned into festive occasions at Westfield, as often happens at other companies. At best, Lowy shakes his employees' hands and gives them a brief smile. Generally, not even this happens.
He is equally serious about his hobbies. After being elected president of the Jewish soccer club in Sydney, called Hako'ah, he fired all the members of the board and brought in nine new members who were prepared to pay $5,000 for the privilege.
Lowy's business partnerships haven't always ended pleasantly either. In the late 1960s, his brother, John Lowy, who worked at Westfield, left the company and built a motel that competed with one of Westfield's. The brothers didn't speak to each other for a year.
Lowy's partnership with Saunders was even more problematic. They were partners for 30 years until Saunders left Westfield in 1984. He worried that with Lowy's sons joining the company, he would be pushed aside. The parting was painful. Lowy did not take it well. Saunders decided to remain in the company's management after he sold his stocks to Lowy. Lowy didn't like the decision. He moved all of the employees out of the 24th floor, where Saunders' office was, leaving Saunders there all alone. Shortly after Saunders left, a new assessment of the original stocks was made. Lowy made a lot of money and Saunders felt betrayed. He thought that he should have been included in the agreement.
In Lowy's biography, which was written with his cooperation, Saunders is savagely attacked for his sloppy work practices and faulty business decisions. Saunders passed away in 1997. Lowy was in Israel at the time and did not attend the funeral. When Saunders' will was read, it turned out that he'd prepared a little revenge. He requested that no one from the Lowy family ever be allowed to purchase stock in the mall that he built after leaving Westfield.
Lowy has not intention of retiring from Westfield. Though he has slowed down a little bit in recent years, he told Margo that he is staying with the company, saying that he has nothing else to do. n
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