Insider information from heaven
Spiritual longings of Israeli tycoons is plain old superstition, the age-old desire in a world of uncertainties to think one has a leg up on the future.
In a country where we are so accustomed to seeing religion mix with politics and politics with business, it’s jarring to see the third side of the triangle out in the open as we did this week: business and religion, or Rabbi Yoshiyahu Yosef Pinto, sitting between two leading entrepreneurs -- our Nochi Dankner and the Argentinean real estate magnate Eduardo Elsztain.
Not only did the rabbi affix his blessing on the agreement in which Elsztain will take a stake in Danker’s Ganden Holdings; he was widely given the credit for bringing it about to begin with.
It’s just possible that Elsztain is engaged in a rearguard maneuver to gain control of some of Israel’s most valuable companies through Ganden’s control of the IDB group. But given the IDB group’s extraordinarily precarious financial state, that seems like a very daring and therefore unlikely long shot.
IDB Holding Corporation, the company at the top of the IDB pyramid and the only IDB group company Ganden controls directly, stands a good chance of ending up in the hands of its bondholders, which would leave Elsztain with nothing. Rather, it seems Elsztain – if not Dankner – was moved by the urgings of Rabbi Pinto.
It’s no secret that religion of one kind or another plays a murky role in the business affairs not just of vegetable market vendors, with their pictures of the kabbalist Baba Sali and the Chabad Rebbe posted for good luck, but at the highest echelons. Shari Arison admits to dabbling in New Age spiritualism and claim to see future events. Lev Leviev is close to Chabad and took advice from the Rebbe at critical points in his business career. Nochi Dankner is reportedly close to Rabbi Pinto.
But Ganden is named after a Tibetan Buddhist monastery, which suggests Dankner’s religious proclivities are syncretic, to say the least. Ilan Ben-Dov, who owns the Partner Communications group, takes advice from a clutch of rabbis. Most notable among them is notably Rabbi Pinto, who helped broker a deal in which Elsztain bought New York’s Lipstick Building from Ben-Dov five years ago.
Sweet nothings in their ear
You might think the religious connection belies the stereotype of the tycoon as a single-minded hunter of profit and power, ready to shoot down extraneous employees or overly demanding bondholders without a second thought. But if many an Israeli tycoon has a second, spiritual-minded side, not much should be made of it. It would be one thing if a rabbi was whispering into the hear of the great tycoon, “Do the right thing … Make good on your debt at whatever the personal cost to you … Do what you can to save jobs … Be fair to your customers … Don’t abuse your power,” inspiring his conscience.
But let’s face it Orthodox Judaism, especially the ultra-orthodox variety, doesn’t entangle itself in social justice issues. That’s for the Reform and Conservative movements. Rather, the benefit entrepreneurs see in consulting with rabbis is plain old superstition, the age-old desire in a world of uncertainties to think someone has a leg up on the future. Insider information from heaven. What could be better?
Let’s look at what Rabbi Pinto had to say at last Thursday’s signing ceremony where Elsztain agreed in principle to take a 10% stake in Ganden for $25 million, with an option to put in another $75 million by the end of the year for a further 20%.
First: “It is important to strengthen the Israeli economy, ensure livelihood for tens of thousands of Jews while caring that all those who have invested through insurance, [and] pensions, who have lent money to these companies, won’t be hurt and will have their money repaid.”
That almost sounds like an appeal to social justice – protecting the jobs and the savings of ordinary people. Except that if Rabbi Pinto were really intent on saving livelihoods he might have asked Elsztain to buy the Phoenicia glassworks, or even the floundering publishing group Maariv, or set up an investment fund to put into growing businesses.
What’s directly at stake with IDB is Nochi Dankner’s ability to retain his empire and the jobs of few-dozen headquarters staff. This is not to say that the rabbi is being wholly disingenuous, but it does suggest that social justice was not a well-thought-out priority in this deal.
Second: “There is a divine promise that the money of those who invest in the Land of Israel will double or triple.”
IDB’s bondholders may be skeptical about such claims but, like the Oracle of Delphi, Rabbi Pinto’s words are subject to interpretation – and woe to he who interprets them wrongly. Double or triple – is that before or after inflation? Over how many years? Does that mean all investments in the Land of Israel are good or only if you average them out with a balanced portfolio? If the Myra deep-sea well comes up dry, does that mean that the next-door field Sara will pay for itself and Myra several times over? Or does it not count at all, since it’s offshore? Go ask your investment adviser.
Pinto has said that his business prognostications are not prophecies but blessings, which appears to be a way of hedging his spiritual bets. The Oracle at Delphi used to get around her reputational problem by keeping her prophecies vague enough to be able to say later that she was misunderstood (or, to use the modern day parlance, quoted out of context), but offering a blessing is safer still. The blessed understands that it’s a best effort that might not come to fruition.
But hocus-pocus is hocus-pocus. Both phenomena assume that the offerer has some kind of spiritual link with a higher power that gives him or her either an insight into the future or to some power bestow good fortune.
The unfortunate thing about all this is that Elsztain’s cash might just save IDB, and for that we’ll have no choice but to acknowledge it was Rabbi Pinto who was responsible. It’s unfortunate because IDB will continue to exist not because there was any business case for its existence or that there was some kind of macro-economic logic to keeping the group intact, such as saving a strategic industry for the stake of the country, but because of a naïve religious faith on the part of people who should know better.