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During Shaul Mofaz's tenure as defense minister his younger brother, David Mofaz, began working with an arms trade company named Silver Shadow. At a meeting with an individual who was looking into buying arms through him, David Mofaz said among other things that he had been involved in a deal to sell light arms to Georgia. These details appear for the first time in a profile of Shaul Mofaz to be published in Haaretz Magazine this Friday.

Silver Shadow is licensed by the Defense Ministry to supply and export arms. The company's supplier permit, requiring the defense minister's signature, has to be renewed annually. And so it has, including during the years when the elder Mofaz brother held the post. An investigation by Haaretz reveals that David Mofaz never registered with the Defense Ministry as an arms trader, or concerning the Silver Shadow company.

The rules for preventing conflict of interests among ministers stipulate: "In any case in which a minister has a personal interest in a decision or an action according to which, or in the wake of which, a benefit or entitlement is conferred, it is incumbent upon the minister to declare the personal matter immediately, and he is prohibited from taking part in any form in decision making or implementing an action."

Nevertheless, Shaul Mofaz never declared his brother's ties to the company.

David Mofaz was formerly the military governor of Bethlehem. He left the Israel Defense Forces in 1993, and went into business of various kinds, mainly construction. He founded a company, Hatzav, which imported building stone and marble from an area he knew well: Bethlehem. Incidentally, Mofaz takes pride in the fact that his marble decorates the home of Benjamin Netanyahu, who as prime minister appointed his brother IDF Chief of Staff.

During the years the elder Mofaz was defense minister, the younger brother became interested in the arms trade. His main ties were forged with the firm Silver Shadow, which was established in 1995 by Lt. Col. (Res.) Amos Golan, a former commander of the undercover Duvdevan unit. In late April 2006, a few days before Shaul Mofaz's tenure as defense minister was to end, David Mofaz held a meeting in Tel Aviv with a prospective arms buyer. "I have another office, in Yehud," Mofaz said, referring to Silver Shadow, which is located there. "They are subcontractors on the projects I bring in."

At that same meeting Mofaz recounted how his career change was accomplished: "I went into the defense business in Romania, through a very large security firm that has an office there, and took Silver Shadow as my subcontractor. Silver Shadow deals in providing security, weapons, information... so I took them and they represent me in Romania in dealing with that firm. We held exhibitions... we have already sold parts. But they are up front. I brought them the work... They are my subcontractors, they are signed up with me today."

The potential client asked whether Mofaz held Defense Ministry permits. "You have to get authorization from Sibat, in the Defense Ministry," Mofaz replied, referring to the ministry's foreign aid and export unit. "I personally cannot sell, only Silver [Shadow]."

He said also that "together with Silver," he had ties in Africa - in Nigeria and Uganda - and could supply anything "from light to heavy arms, all the way up to planes."

When the client asked about his brother, the defense minister, Mofaz said, "It's not through him," and explained that he can secure higher profits "than someone else who can land a tender."

He gave an example: "I did a deal in Georgia. I went to Israel Military Industries - they had the Micro-Galil, Glilon, priced at $2,000 per rifle, and I, after buying a Glilon, shortened and upgraded it, and got to $1,000 [in profit]. There are huge gaps. I made $1,000."

Silver Shadow founder Golan, reached by telephone in Africa, said that Mofaz "was engaged in areas in which I had no part: construction, trade. We met a few times, but I didn't have any dealings with him. It didn't get past idle conversation."

Asaf Nadal, Golan's former partner in Silver Shadow, confirmed this week that "Mofaz worked with us for a short time," and David Mofaz himself confirms this.

Defense Ministry spokesman Shlomo Dror commented: "The ministry does not provide information about companies registered with the department that supervises exports in the Registrar of Exporters. Nor do we give out information about defense deals."

Shaul Mofaz said in response: "It is totally without foundation."