In a bank in an unknown country, former Israeli judge Dan Cohen maintains a safe deposit box in which all the secrets are kept − secrets that, if revealed, might implicate several well-known Israelis in crimes that could send them to jail for years. Now that Cohen has been brought back to Israel, the state prosecution has to find the key to the box, or a way to get Cohen to tell them what’s inside.
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In August 2005, when Cohen was in Turkey emceeing a tribute to his good friend, former Supreme Court President Meir Shamgar, investigators from the Israel Securities Authority left a message at his law office inviting him to be questioned. Upon returning from his junket, he presented himself to the investigators at the authority’s office in Tel Aviv.
For hours he was peppered with questions about his alleged receipt of bribes from businessman Ezra Harel to promote the latter’s interests with the Israel Electric Corporation, where he served on the board. Cohen maintained his right to remain silent.
Only toward the end of the session was Cohen asked about his relationship with Siemens, the German-based global electronics and engineering manufacturer.
“Siemens took care of you well because you took care of their interests in Israel when you were a member of the IEC board, didn’t it?” he was asked, cynically. “Being an IEC board member’s a great job, isn’t it? We deal with other people’s money, take care of ourselves a little ...”
Cohen refused to take the bait. But four days later, he was in Peru, and didn’t set foot in Israel again until Sunday.
Siemens CEO talks
In November 2005, by which time Cohen had gotten used to the view of the golf course and the Pacific Ocean afforded by his ninth-floor apartment in Lima, Oren Aharonson, CEO of Siemens Israel, was called into the Securities Authority office, where he proceeded to explain his give-and-take relationship with the former judge. By evening, after signing a state’s witness agreement, Aharonson provided the investigators with what they were looking for: the story of how Siemens allegedly paid Cohen a bribe to help it win a strenuously contested bid to sell the IEC three huge gas-powered turbines.
“I didn’t meet with him because of the rulings he had handed down, but because of his ability to assist us,” said Aharonson, as he described the beginning of his relationship with Cohen in 2001 and how he eventually transferred millions of shekels to him. “I knew he was on the board of the IEC. I knew that we were meeting privately, not in the presence of anyone else from the IEC and not in the corporation’s offices. That’s what I found problematic at that stage.”
According to Aharonson, Cohen made sure to remove the battery of Aharonson’s mobile phone and made sure he understood that no one else was to know about their meetings.
“All of that gave me the feeling that we were embarking on a road that was not innocent,” Aharonson said. “He did not ask for a fee [at first] and I did not ask [if he wanted one]; that was the start of the process. Possibly, if I had asked the question, the relations between us would have ended then. It was an evolving process and I knew it would cost me.”
Aharonson told investigators how Cohen allegedly promoted Siemens during the tender process, and that eventually Cohen allegedly asked for 4 million euros, which came to about one percent of the deal. At the end of a tough negotiation, Aharonson was able to close with Cohen on a much smaller bribe: One million euro.
After Siemens won the tender, Aharonson told investigators, Cohen “handed me a piece of paper on which he had written the account details and everything that was required, including the name of the company, Velsheda, and other details needed to transfer the money: account number, SWIFT number and so forth.”
Aharonson allegedly recruited his brother-in-law Shlomo Daniel, who owned a textile firm in Hong Kong called Oakfield, to act as the conduit between Siemens and Cohen’s overseas company, which was registered in the British Virgin Islands. A short time later the money was allegedly transferred from the Velsheda account to Cohen’s personal account in London.
But the more mysterious chapter of the Dan Cohen saga actually unfolded after these events. Cohen resigned from the IEC board in 2001, yet in 2002, when Cohen ostensibly was no longer in a position to assist Siemens, the engineering firm continued to funnel Cohen money. Between the winter of 2002 and summer of 2003, the IEC purchased two more turbines from Siemens costing more than 200 million euros, with the former director allegedly getting a fee of one percent of the deal. When Siemens won yet another IEC tender for a high-tension electricity network, Cohen allegedly got a more modest payment of only a few hundred thousand euros. The total of more than 2.5 million euros also allegedly made its way to Cohen’s personal accounts in roundabout ways.
Why did Aharonson allegedly continue to pay Cohen millions of euros even though the latter was no longer on the IEC board? Why was the percentage paid even higher than what Cohen had allegedly gotten on the original deal? One suspicion being investigated is that Cohen was acting as a funnel for bribes to senior IEC officials, who continued to help Siemens even after Cohen had left.
More than $20 million in bribes to Israelis
The plot took another twist in December 2008, when the U.S. Security and Exchange Commission announced an unprecedented settlement with Siemens AG, one that resolved SEC charges that the manufacturer had violated the Foreign Corrupt Practices Act by systematically paying bribes to foreign government officials to get business.
Siemens, the SEC said, had paid a total of $1.4 billion in bribes all over the world, including to China, Russia, Venezuela, Argentina, Bangladesh and Iraq. Siemens paid over $1.3 billion in fines to the American and German authorities to settle these charges.
The SEC indictment showed that in Israel alone Siemens had paid more than $20 million in bribes between 2002 and 2005. This would mean that there are several more Israelis who have allegedly benefited from the German giant’s largesse. What exactly happened in Israel has not been resolved to this day. Cohen may be the only person who can dispel the fog.
During the years he was abroad, Cohen would tell close friends that he feared for his life. The friends were known to assume that Cohen had information about other senior figures at the IEC who had also allegedly accepted bribes.
Cohen was good friends was the late businessman Shmuel Dechner, the state’s witness in the Holyland bribery case. Cohen was known to be following the Holyland case closely, observing the crusade being conducted against Dechner, and was not eager to suffer the same ordeal. But now it seems he will be subject to what is the prosecution’s primary mission: To extract the truth from Cohen about the Siemens case, the largest bribery case in Israel’s history.