Last update - 00:00 22/06/2006
Police probe suspected illegal dealings of Israeli defense firms in Iraq
By Yossi Melman, Haaretz Correspondent
Several Israeli firms involved in defense exports are being investigated by the police on suspicion of illegal dealing in Iraq.
The probe is being handled by the international investigations unit and has been going on for a number of weeks. It began following a complaint, accompanied by data, filed by the head of Field Security at the Defense Ministry, Yehiel Horev.
Horev and his staff had began a preliminary probe into the matter following information they had received.
At the time, a Yedioth Aharonoth investigative report, which appeared in December 2005, also put forward information on the case.
A Defense Ministry spokeswoman confirmed that Field Security explored the issue and gave its findings to the police for a formal investigation, but refused to reveal any other information.
At the focus of the investigation are Shlomi Michaels and Kodo, a firm registered in Switzerland but operating in Israel.
Sources familiar with the case say that a foreign-registered company that operates in Israel should be listed with the Company Registrar - and this is a matter that will also be investigated by the authorities.
Kodo and Michaels are suspected of selling equipment, know-how and technology, as well as providing security advisers from Israel, to groups and companies of Kurds operating in northern Iraq. One of the main operations in that region was setting up of a security apparatus for the Irbil airport.
Suspicions about the role of Tadiran, Motorola, Magal and other firms believed to have been involved in providing equipment through intermediaries to Kodo and Michaels are also being investigated, though no company officials have yet been called by the police for interviews.
Police sources acknowledged that the matter was being investigated but at this time there was no further information for release.
Motorola responded to our inquiry by saying that it was not aware of an investigation involving the company and that "it has and will operate according to the law."
Attempts to receive a response from other firms said to be involved in the investigation met with refusal.
In the Yedioth Aharonoth report, Magal was quoted as saying that "being a public company Magal reports on its activities as required by law."
One of the names raised in the case is that of MK Danny Yatom, who was a partner with Shlomi Michaels in the Interop Group corporation. Kodo is a subsidiary of Interop Group.
Yatom said last night that he is not aware of any investigation in the matter and added that "if I am asked to provide what I know, I will gladly do so."
The MK said that a mutual friend introduced him to Michaels several years ago, at a time when he was not in public office, and that he had placed his stock in the company under the control of a trustee.
In the Yedioth Aharonoth report Yatom was referred to a someone who used his contacts "in order to win the contract" and it was reported that he had met with the Kurdish representative in Washington, Farhad Barzani.
Shlomi Michaels, 51, grew up in Moshav Orot in the Negev, served in the paratroopers, and later in the police counter-terrorism unit. He moved to the U.S., where he was involved in restaurant businesses and set up a security company. He has dual citizenship, in Israel and the U.S.
Michaels did not respond to a request for comment on this story.
Since 2004 Israeli firms operating in northern Iraq, including Michaels and Kodo, were ordered to cease their activities because of the threat of terrorism and Al-Qaida.