Israeli Diamond Tycoons Listed in Leaked Panama Papers

Diamond and mining magnate Dan Gertler is mentioned more than 200 times in the leaked documents of Panamanian law firm Mossack Fonseca, a leader in establishing shell companies that often serve to conceal the ownership of assets.

Dan Gertler in Democratic Republic of the Congo
Dan Gertler in Democratic Republic of the Congo, 2012. Bloomberg

The Israeli billionaire Dan Gertler, who made his fortune in diamonds and mining, is mentioned more than 200 times in the Panama Papers.

Gertler is among some 600 Israeli companies and 850 Israeli shareholders listed in the leaked documents of Panamanian law firm Mossack Fonseca, a leader in establishing shell companies that often serve to conceal the ownership of assets.

Gertler is mentioned in connection to a number of companies, and registered as a beneficiary for some of them. Mossack Fonseca’s internal correspondences includes a draft of a contract between Gertler and a company called Callery Resources, seemingly for consultation on a mining deal in Congo.

Haaretz’s investigation has found that this company is controlled by Yitzhak Abuhatzeira, son of millionaire Rabbi David Abuhatzeira and apparently one of Gertler’s closest associates.

The leaked documents also show that the Panama-based law firm had stopped representing Gertler due to alleged investigations into his companies.

In 2011 Gertler was at the center of an extensive correspondence between various figures in Mossack Fonseca. According to the files, the law firm failed to carry out a due diligence examination before registering two Panamanian companies, Burford Commercial S.A. and Norseville Estates S.A. The two companies were registered at an unusual request of a Swiss law firm. Only after registration did Mossack Fonseca find out that the beneficiaries of both companies were “Anat Gertler, her husband Dan and their children.”

After this discovery, the head of the firm’s client department sent an email recommending the firm immediately stop working with these companies and halt cooperation with the Swiss firm that represented them.

“…We discovered that the [beneficial owner] is a Mr. Dan Gertler who is an Israeli diamond dealer under investigation… His name is plastered all over the internet and we have entities of his with our [British Virgin Islands] license that are currently under investigation by the BVI Financial Securities Commission,” the email says.

Another email says Gertler is suspected of bribing Yisrael Beiteinu leader Avigdor Lieberman; a correspondence from 2011 confirms that Mossack Fonseca ceased representing the companies.

Emails sent in 2015 again mention Gertler’s name. They include a draft of a contract between Gertler and a Panamanian company Callery Resources, which was registered by Mossack Fonseca in January of that year.

According to the contract, Callery provided valuable consultation services to Rowny Asset Limited and other companies “associated” with Gertler on mining in Congo’s Katanga Province. The outcome of the consultation was the creation of a company called Mumi, which was jointly owned by Rowny and the mining giant Glencore. Mumi’s holdings in Katanga are estimated to be $1.8 billion. The contract states that Rowny received a dividend from Mumi in the last quarter of 2014.

In the contract, Gertler also undertakes to “recommend” that Rowny to pay Callery $10 million for its services, with further payments if additional dividends are received from Mumi. Callery’s power of attorney is signed by one Yitzhak Abuhatzeira of Ramat Gan, according to the leaked papers.

Yitzhak Abuhatzeira is the son of David Abuhatzeira, formerly Nahariya’s chief rabbi. In 2012 Rabbi Abuhatzeira’s fortune was valued at 750 million shekels by Forbes Magazine and he was listed as Israel’s second wealthiest rabbi. David Abuhatzeira is also the grandson of Rabbi Israel Abuhatzeira, known as the “Baba Sali.”

Although Rabbi Abuhatzeira usually avoids being endorsing with a specific political party, in the last elections he openly supported Shas. The rabbi is known as one of Gertler’s confidants. Three years ago he reportedly spent a weekend in Bnei Brak, where Gertler lives, to take part in the diamond merchant’s son’s bar mitzvah.

Gertler is also reportedly a frequent guest at the Abuhatzeira family’s celebrations.

There is no evidence in the files that the contract draft has been signed or implemented. Gertler refused to answer questions on the matter and Yitzhak Abuhatzeira was unavailable for comment.

Gertler isn’t the only diamond merchant associated with companies that were registered by Mossack Fonseca. Lev Leviev, for example, is named in the files as the owner of Lexinter International Inc., which holds shares in Vauxhall Securities Inc., a company registered in the British Virgin Islands.

The extensive activities of diamond and mining tycoon Beny Steinmetz, his brother Daniel Steinmetz and their business partner Nir Livnat are mentioned in hundreds of Mossack Fonseca documents. Internal correspondences between the law firm and Diacore, part of Steinmetz’s diamond group BSGR, identify Construction Minister Yoav Galant as a confidant of Steinmetz.

In view of this, the law firm requested the company to provide “the pertinent explanations related to the information found.”

Galant’s office said in response that “Galant doesn’t know Daniel Steinmetz, he saw him a few times in social circumstances. Benny Steinmetz has been a friend of Galant’s for many years to this day.”

Gertler responded to the report through lawyer Boaz Ben Zur, saying that "according to an initial examination , the two firms noted in the report are non-active, and were being held as shelf companies (the use of shelf companies is a matter of routine practice in international business). Moreover, my client had no knowledge of the claims raised regarding the [Panamanian firm's decision] to terminate representation [of Gertler for alleged investigations]. In this regard, it should be noted that firms under the trusteeship of the Gertler family do business on a global scale, working with some of the most prominent publically traded firms around the globe. Mr. Gertler's reputation is under constant scrutiny and he has always been found to be unblemished, with his businesses run according to the law and official requirements.

Regarding the draft of the contract, Ben Zur said "the contract was not signed by Mr. Gertler and was never fulfilled, and no money was transferred to Yitzhak Abuhatzeira or any firm acting on his part. Mr. Yitzhak Abuhatzeira was employed in the past (until a year ago) by a foreign consulting firm tied to Mr. Gertler. Mr. Abuhatzeira performed his duties well. It was further reported that Rabbi David Abuhatzeira is Mr. Gertler's rabbi for many years. The ties between them are between a man of faith and his rabbi, and have no connection to his businesses."

Haaretz reached out to Yitzhak Abuhatzeira numerous times in both writing and on the phone but was unable to receive his response.

The leaked files, which were obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with Haaretz and other media organizations, provide a glimpse of the economy that until now had been hidden from the Israeli public.