A Rare Look Into the Dark World of Israeli Arms Traders

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The new Hermes 900, in use by the Israel Air Force.Credit: Elbit Systems

The delayed appointment of Brig. Gen. (res.) Gal Hirsch to be Israel’s new police chief enables a fairly rare look into the secret and usually dark world of Israeli companies that deal in the arms trade and security consulting abroad.

And similar to other cases in which a random development in one affair led to completely different matters, this instance also paints a warped picture. The extent of supervision by state authorities turns out to be too lax. Coordination between various bodies is marginal to nonexistent. And anyone who knows the rules of the game – mostly reserve generals whose experience and connections in fatigues serve them after retirement – know how to maneuver between the raindrops without getting wet.

Several points have emerged from the brouhaha over the appointment. First, a pre-appointment check is being conducted into companies he owns, regarding suspicions of money laundering and bribing of foreign officials. Second, the information reached Israel after foreign states and investigative bodies, among them the FBI, made inquiries. Third, the Israel Money Laundering and Terror Financing Prohibition Authority – and not the police, as Hirsch’s lawyer claimed – initially looked into the suspicions. Fourth, even though two years passed, the investigation into the matter made practically no progress. Fifth, the Defense Ministry didn’t know a thing about the allegations against Hirsch, who holds an export license from the ministry, or about 21 other Israeli security companies about which similar accusations were made. Finally, the Israel Defense Forces did not hold up Hirsch’s security export deals when he was reinstated into the ranks as deputy head of a new IDF command in 2012.

None of these facts need surprise anyone following in the least bit the security export field. Assertions about similar problems routinely appeared in state comptroller reports, some of them remaining classified and heard from a host of activists and legalists familiar with the field. Israel has intentionally carried out a widespread policy of ambiguity in the area of arms trade, based on a convergence of interests.

A senior security source who dealt in the field for many years told Haaretz that in many deals that the Israeli arms industry carries out abroad there is a “basic potential” for corruption offenses, bribery payments and use of sensitive information without receiving full permission from the security establishment. He recalled that a significant chunk of the arms trade is conducted in Third World countries and formerly Communist countries. Accusations against Israel Military Industries and Israel Aircraft Industries arose only in the past decade regarding bribery payments in India. The names of Israeli companies, including Hirsch’s firm, arose in similar circumstances regarding the Georgian foreign minister, while in Poland the deputy defense minister was forced to resign after he found himself at the heart of an ugly dispute between two Israeli companies.

One of the recurring assertions that certain figures familiar with the field make is that it is hard, and sometimes impossible, to push through deals, especially arms deals, in the Third World without greasing the wheels of government officials and politicians responsible for their approval. In some cases, as previously published, major security firms from Israel worked with local middle men and agents to distance themselves from bribery accusations, despite the declared effort led by the OECD to promote legislation and enforcement steps to cut down on bribery.

One of the reasons countries are slow to intervene in the field is related to the enormous revenue derived from the deals, which ranged in recent years between $6.5 billion and $7.5 billion annually and positioned Israel, according to several estimates, as one of the world’s five biggest arms exporters. Throw in the identity of those dealing in the field – three government-owned industries in one form or another (IMI, IAI and Rafael), a fourth major company with profuse ties to the state (Elbit) and a host of businessmen with a rich military past, and you understand why Israeli enforcement authorities lack teeth in the field of arms exports.

In order to ensure real enforcement, there has to be more legislation and a genuine desire of the security establishment and legal system to leave no stone unturned, assuming that signs of corruption will be found under most of them. Such resolve has not been demonstrated to date.

Hirsch’s appointment raises anew the question of security clearance, especially when senior reserve officers are involved. It must be clear here that even in the last turbulent week not one shred of suspicion was raised against Hirsch about security sensitivity. But if there has been information raising suspicions of arms violations for two years, it is information that should stand before the eyes of the military apparatus when deciding whether to promote a senior reserve officer or to reinstate him in a senior position.

There have already been traumatic affairs in the past – Hezbollah kidnapping reserve Colonel Elhanan Tannenbaum in Lebanon after it tempted him and the forging of a document to which Brig. Gen. (res.) Boaz Harpaz admitted – in which senior reservists with problematic backgrounds had access to top classified information for many years without alarm bells going off in the army. Again, Hirsch is no Haparz and certainly no Tannenbaum, but the guidelines should apply to everybody.

In practice, it has become clear over the years that periodic security checks (among them a polygraph test) of senior officers, especially reservists, is lacking. In addition, there are gaps in sharing relevant information between the Shin Bet security service, the police and the IDF’s department of information security. Only in May 2014 was a decision made that every person who returns to active duty must pass a security check, which includes checking his name in the criminal and intelligence registry.

There are still hundreds, if not thousands of reserve officers who are still party to sensitive secrets via reserve duty or even their connections, but there is no background check for them, be it out of discomfort due to their glorious past, because of problems in allocating resources or simply because of systematic laziness.

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