Who's the boss?
At the age of 21, Minister Avigdor Lieberman's daughter Michal opened a 'business consulting' firm. Within three years, the company had taken in more than NIS 7 million from anonymous sources abroad. The main one to profit was Lieberman himself; he drew a salary of hundreds of thousands of shekels in the years when he was not in the Knesset and the government. The police are now investigating where the money came from, and in return for what.
At the beginning of June 2004, the disengagement plan proposed by prime minister Ariel Sharon was put to a vote in the cabinet. Avigdor Lieberman, the transportation minister from the National Union party, opposed the plan and was dismissed by Sharon. Less than a month later, Lieberman already had his mind on other things. On July 6, 2004, a new company was registered in Israel: M.L.1 - International Trading Company, Ltd. (Hebrew name: M.L.1 - Hevra Lesahar Beinleumi). The company is registered under two addresses: One is Lieberman's home in the Nokdim settlement near Jerusalem, the second is 10 Nehama Street in Jaffa, where the offices of Flying Carpet (Hashatiah Hame'ofef), headed by Lieberman's friend Yaron Miller, are located.
The sole shareholder in M.L.1, listed by the Registrar of Companies as a firm that provides business and financial consulting to foreign companies, is Michal Chaya Lieberman, the eldest daughter of the fired minister. Michal Lieberman, who was 21 when the company was established, is apparently a very talented businesswoman. Data that has reached Haaretz indicates that her company has been extremely successful: Since the time of its founding, M.L.1 has brought in an income of at least NIS 7 million. In 2004, the company took in NIS 1.8 million and in 2005 that sum more than doubled, to NIS 3.9 million. The company was also active in 2006, when its clients poured in at least NIS 1.4 million. The money came from unnamed sources abroad in return for "business consulting."
A few months ago, information about the company was obtained by the Israel Police's National Fraud Investigation Unit, which launched an investigation. "Michal Lieberman is indeed a signatory on the company account and sometimes signs documents," explains a source involved in the investigation, "but the theory is being investigated that she is not actually the one who determines the substance of the company's activity, and she is clearly not the one earning the most from it."
In fact, in the first two years of the company's existence, its biggest earner was her father: In 2004, for example, Lieberman received over NIS 600,000 in wages from the company. In 2005, he received even more. The other employees listed for the company in those years are Chana Helstein, Michal Lieberman and a man by the name of Sharon Shalom, whose connections with Lieberman will be discussed below. The income of these three pales in comparison to that of Avigdor Lieberman. In 2004, for instance, the three of them together earned about NIS 100,000.
It should be emphasized that, on the face of things, there was no legal hindrance to Lieberman receiving a salary from his daughter's company during the time in question, since he was no longer serving as a minister or an MK. But Michal Lieberman's company continued to be active even after the last elections, in which Lieberman was again elected to the Knesset.
On October 30, 2006, Lieberman was appointed by the Olmert government Deputy Prime Minister for Strategic Affairs. On November 7, his daughter Michal founded a new company, MLG Jerusalem Properties Ltd., whose address is also listed as Lieberman's home address in Nokdim. Michal Lieberman herself, it should be noted, lives with her husband on Ha'ari Street in Jerusalem, not in her father's home. Michal Lieberman also holds 100 percent of the shares in the new company. According to data from the Registrar of Companies, her original company, M.L.1, is now a subsidiary of MLG.
The National Fraud Investigation Unit is currently examining whether Minister Lieberman conducted business via his daughter's company in violation of the Knesset Members' Immunity, Rights and Duties Law, which stipulates that "a Knesset Member will not engage in any business or additional occupation, except for unpaid voluntary work." Another question is whether funds connected to her father's prior business activity were transferred to the companies founded by Michal Lieberman. A top accountant, asked by Haaretz for his opinion, said that if the profits were created as a result of Lieberman's activity as an MK or a minister, then it would seem to be improper activity. Meanwhile, as far as is known, the police investigation is stuck; apart from having established that the funds came from abroad, the National Fraud Investigation Unit has not been able to determine just who was behind their transfer.
Where is M.L.1?
The mystery deepens when one tries to search for evidence of activity by the company of Lieberman's in the real world. Aside from Lieberman's home address, M.L.1 is also listed at the same address as the charter flight company Flying Carpet. M.L.1's phone number, as it appears with the Registrar of Companies, also leads to one of the extensions of Flying Carpet. However, at that company's offices, they claim not to be familiar with a company called M.L.1 International Trade, or with Michal Lieberman. In a telephone call, one of the secretaries did say that "Yvet [Avigdor Lieberman] used to come around here." A visit to the place and a search for any sign of another company besides Flying Carpet also came up empty.
Avigdor Lieberman and Yaron Miller are old friends who met in the 1970s at the Hebrew University of Jerusalem. Because of their friendship, during his tenure as transportation minister, Lieberman announced that he would not handle any matters related to Flying Carpet. Miller, the CEO, director-general and controlling partner in the company, was arrested in May 2005 by investigators from the Israel Securities Authority on suspicion of stock manipulation. The Authority concluded its investigation and the case was transferred to the Tel Aviv District Attorney in March of last year.
In the past, Lieberman worked out of the offices of his friend Miller - not in the framework of private business, but for the purpose of political activity. In an article published by Guy Leshem in TheMarker about a month ago, Lieberman said: "I paid for the rental of my bureau through the MK bureau office, and a copy of the contract is at the Knesset. All the money was paid directly from the Knesset to Flying Carpet."
Miller told Haaretz a week ago that he is not familiar with Lieberman's private business or with his daughter's company, even though it is listed under the same address as his own firm. "I don't know it. I have no part in it, no connection with or any knowledge of his private business."
Have you heard of the M.L.1 company?
Miller: "I don't know anything about it."
It's a company that's registered under the address of Flying Carpet.
"Maybe, but I have no idea what it does."
That's a little surprising, since the only thing at 10 Nehama Street are the offices of Flying Carpet.
"Maybe at the time he put it on this address, but I don't know anything about it or about what was done there."
Do you know Michal Lieberman?
"I've shaken hands with her once or twice and if I'm not mistaken I was at her wedding. Beyond that, I don't know her."
She doesn't come around to your company's offices?
"I'm closed up in my office and I don't know what goes on there."
When I visited the offices of Flying Carpet, no one there had heard of her company, which is supposed to be located there, too.
"Maybe, but I know nothing about the companies, even if they are registered under my address. Even if tomorrow someone were to register some business or another under your address, it doesn't mean that you gave permission for them to do it, or that they asked you. I don't know anything about this."
Another company is also listed as being located at 10 Nehama Street, and no one in Flying Carpet, Miller included, knows anything about it, either. The firm is called Omnia Pro, Inc. and was founded by Sharon Shalom about a week after the founding of M.L.1. Shalom has been a close associate of Lieberman's in the past few years. He worked with him when Lieberman was minister of infrastructure in 2002, afterward was his advisor in the Transportation Ministry, and in the last elections, served as head of public relations for Lieberman's Yisrael Beiteinu party.
Shalom currently works with diamond executive Dan Gertler. Omnia Pro is listed as a business that deals in international trade. Its sole employees are Shalom himself and his sister Shirla, who declined to respond to Haaretz's questions about the company.
From the time of its founding through 2006, Omnia Pro recorded income in excess of NIS 750,000. Most of this sum was transferred from Michal Lieberman's M.L.1 company. Omnia Pro is also registered under another address - 8 Rivka Street in Jerusalem. This is the address of Shalom's grandmother.
In a conversation with the grandmother, she related that she receives mail and packages for her grandson, and suggested speaking to Sharon's father, David Shalom, in order to arrange the delivery of a package. The father confirmed that packages can be sent to Sharon through him, and that if necessary, the packages will get to Lieberman, too. "I don't give it to Yvet," the father explained. "I give it to Sharon and Sharon says 'I got the package' and gives it to him. Sharon is, how would you say - his deputy, they're totally together. They're more than together."
Sharon Shalom responds: "My relations with Mr. Lieberman are excellent. I am a private businessman. The meaning of the term 'private' is that my activity and my business are my private affairs and not of interest to you or your readers. Omnia Pro is a company that provides consulting services to a number of clients. The company was founded by me in 2004, after my resignation from the Transportation Ministry and in my capacity as a private citizen. On behalf of Omnia Pro, I serve as the director-general of the M.L.1 firm in accordance with an agreement between it and Omnia Pro. I am not an employee of M.L.1, but of Omnia Pro. In the two and a half years that I have been providing these services, Omnia Pro has received periodic management fees, as is standard and in accordance with the agreement [between the companies].
"Omnia Pro gave the Registrar of Companies the official address on Rivka Street in Jerusalem, which is also my personal address in the registry of residents and has been my family's permanent address for many years before (since the 1950s) and until now. M.L.1 is located at 10 Nehama Street and Omnia Pro is entitled to these office services under the terms of the agreement between the two companies. Yaron Miller is a close acquaintance. I never worked in any private capacity during the time I worked for the state. Omnia Pro was started after my retirement from public service. To the best of my knowledge, the same is true of M.L.1. MLG Jerusalem Properties was founded for the purpose of holding properties and has no clients."
Hist ory and Slavic studies
Michal Lieberman, one of Avigdor Lieberman's three children, is now a 24-year-old student at the Hebrew University of Jerusalem, majoring in history and Slavic studies. A few years ago, she became religiously observant, and about two years ago, she married Yehonatan Galon, from the settlement of Yakir.
In the past few years, Michal Lieberman has been involved in her father's political activity and in Yisrael Beiteinu. She headed the party cell at the university and in March of last year, as part of the party's campaign, she gave interviews to various media outlets. In an interview on Channel 2 a few days before the elections, Lieberman was asked how close she is to her father. "Close - that is a word that sounds a little strange to use in describing a father-daughter relationship," she said then. "We are father and daughter, and we're also good friends, and on the political plane, I function in conjunction with the entire party, and not just with my father, in order to promote the principles of Yisrael Beiteinu."
After the party's success in the elections, Michal Lieberman told the Ynet Web site that the success was "thanks to God. I helped my father, both as a member of the family and as the chairperson of the list at the Hebrew University. We did a lot of field work, I stood at intersections in Jerusalem, I accompanied him every day ... I'm convinced that this is just the beginning for him and I believe that those who voted for the list will get a superb team that will do a lot for them."
Michal Lieberman is a well-known figure in her father's political party, but her name was never before tied to his business activity. In a telephone conversation, she confirms that the M.L.1 and MLG Jerusalem Properties companies are registered in her name, but she declined to elaborate or to explain the sources of their income. "It's not relevant, it doesn't matter now, those investigations," she said.
What does that mean?
"It's not relevant. I have nothing to say about them, certainly not to Haaretz. I don't think that this kind of prying is appropriate."
We're going to write about it.
"I don't think that this prying is appropriate. I don't like it and I won't cooperate with it."
You should know what we're going to publish so that you can respond.
"I'll hear about it in any case."
Are your companies still active?
"I think that we're done talking. Have a happy holiday."
How involved is your father in these companies?
"You can ask him. He has a spokeswoman."
But these companies are registered in your name.
"So that should tell you what his degree of involvement is, if they're registered in my name. I think that we're done. Bye."
Your questions are impertinent
Through his media advisor, Yossi Levy, Minister for Strategic Affairs Avigdor Lieberman provided the following response
"First of all, Mr. Lieberman asked me to call your attention to the contempt with which your inquiry was received. Your questions are not objective, are impertinent and designed to create an air of impropriety where there is no impropriety. Mr. Lieberman does not think that he is obliged or supposed to provide you with information about his earnings when he was a private citizen. Mr. Lieberman does not think that his daughter's activity or the fact that she grew up in Nokdim and that her address was there is any of your business. Mr. Lieberman is proud that his daughter Michal was an outstanding soldier and an outstanding student and is now successful in business. Mr. Lieberman sees no fault with any of the things that you mentioned in your letter, but he does see serious fault in your inquiry, your questions and the very fact that the important newspaper from which you receive your salary provides a haven for such conduct.
"In addition, Mr. Lieberman would be happy to know the salary of the publisher of the newspaper, the chief editor, the deputy editors, the senior reporters and, in particular, your salary.
"Mr. Lieberman took the trouble to respond to your questions only because ignoring them could have been interpreted by you as evasion.
"The M.L.1 International Trade Company was founded on July 6, 2004 when Mr. Lieberman was not serving in any public position, was not an MK or a minister. The initiative to establish the company was his daughter Michal's, but of course, with the encouragement and support of Mr. Lieberman. Michal dealt with its administration and day-to-day management, while Mr. Lieberman was responsible for business development.
"The company was founded to provide consulting services, primarily abroad. The company provided and provides services to, among others, commercial firms that operate in the fields of wine, real estate and agricultural products in Eastern Europe. The companies are under the ownership of childhood friends of Mr. Lieberman, Jewish businessmen who work in Moldova and Eastern Europe. The company signed long-term contracts with these firms.
"Mr. Sharon Shalom is in Mr. Lieberman's circle of close friends and worked with him in recent years in his various positions. Mr. Shalom has served and serves in the position of director-general of M.L.1 via the company he owns (Omnia Pro) from the time of M.L.1's founding until the present. Payment for his services was made directly to the Omnia Pro company he owns.
"Immediately after the elections for the Knesset, and despite the fact that according to the law he was entitled to wait before he did so, Mr. Lieberman resigned from the company. At present the company continues to operate, with varied extents of activity, under the management of Sharon Shalom and Michal Lieberman. Mr. Lieberman has no connection and never had any connection with MLG Jerusalem Properties, Inc. It should also be noted that Mr. Lieberman was never a signatory for either of the aforementioned companies.
"As for the address of the companies, we note that the address reported in Nokdim was in accord with the private address of Ms. Michal Lieberman. Use of a personal address is a common practice in many cases of the registry of private companies. In early 2001 and throughout 2002, the Knesset rented for Mr. Lieberman an office in the building at 10 Nehama Street in Jaffa as a parliamentary bureau. As of July 7, 2004, M.L.1 rented an office for its use in the aforementioned building. As you will see, there is no overlap between the periods. The quote cited in your inquiry does not refer to the period of time in which the M.L.1 company was in existence. In both cases, there are signed contracts that stipulate the rental conditions and the payments.
"Mr. Lieberman submitted a full declaration and report to the state comptroller regarding all his assets and income as required by his being an MK and minister."