Former Lieberman, Netanyahu Aide Who Mysteriously Disappeared Suspected of Money Laundering

Investigation launched into Michael Palkov, whose passport was found near a dead body in Ukraine. Meanwhile, Yisrael Beiteinu probe continues.

Yaniv Kubovich
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Michael Palkov, media adviser of Avigdor Lieberman, in a 2007 photo.Credit: Motti Kimchi
Yaniv Kubovich

Israel Police are investigating suspicions that a former adviser of Foreign Minister Avigdor Lieberman laundered money as part of the ongoing corruption affair involving senior officials from his Yisrael Beiteinu party, according to an Israel Radio report on Tuesday.

Michael Palkov, a former media consultant who is suspected of laundering funds through a website he owned, disappeared six months ago.

On August 25, the Russian news website REGNUM – a relatively unknown agency that is not particularly influential in the Russian media – reported that two weeks earlier, the Ukranian army had found Palkov's passport along with a charred corpse.

That item, which quoted a “security source,” indicated that the apparent cause of death was torture, and noted that the Ukranian authorities had prohibited publication of the incident. According to other reports, Palkov fabricated his death due to ongoing police investigations and threats against his life.

The Israel Police stated Tuesday that they are not investigating the circumstances surrounding Palkov’s disappearance.

A Russian-language website in Israel, IzRus, is thought to be the main channel for the laundered funds. Alexander Goldstein, listed as one of the website owners, was arrested two weeks ago, when the party corruption investigation went public. The police suspect that Goldstein made deals with various organizations, with the help of David Godovsky, the Yisrael Beiteinu chief of staff, and party MK Faina Kirshenbaum, in exchange for favorable coverage on the site.

The REGNUM report noted that Palkov was an editor for a Russian-language news website in Israel, that was established to serve Lieberman’s media interests. The item highlighted the statement that “Paklov also used the website as a cover for collecting incriminating information against various officials and businessmen with Israeli citizenship in Russia and Ukraine, or who had family members in Israel. He also took interest in Israeli officials, businessmen and politicians from the former Soviet Union.”

The same item went on to say that MK Kirshenbaum mediated between Palkov and parties interested in receiving the incriminating information, and thus “she received more coverage on his website.”

Student union head testifies

Meanwhile, MK Boaz Toporovsky (Yesh Atid) has provided testimony to the Israel Police’s fraud investigation unit concerning the Yisrael Beiteinu corruption scandal. Toporovsky – whose name came up in past investigations into improper handling of government tenders by former Yisrael Beiteinu MK and Tourism Minister Stas Misezhnikov – went to the fraud unit to discuss his own alleged role in that affair, in his capacity as head of the national student union. Toporovsky had been expected to provide testimony irrespective of the current probe into Yisrael Beiteinu.

According to suspicions, funds from the Tourism Ministry meant for a three-day student festival in Eilat were not transferred directly to the production company that organized the event, but rather to the student union, which sponsored it. The State Comptroller’s Office, which looked into the incident, noted that the student union was apparently used to channel funds to the production company, owned by a friend of Misezhnikov’s, without undergoing a proper government tender process.

Misezhnikov, currently under house arrest, is suspected of giving bribes, as well as mediating in bribe-taking and obstruction of justice during his term as minister. Police sources said he is also suspected of bribery in other cases, and possibly of diverting government tenders worth millions of shekels to associates.

The police have conducted a clandestine investigation into Misezhnikov over the last year, which went public when he was brought in for questioning. The affair was initially uncovered by Channel 10 journalist Raviv Drucker in March 2011, and was later followed by an investigation by the State Comptroller’s Office.

Misezhnikov is suspected of using his position to channel funds to various organizations in order to secure jobs for his associates, including for one woman who received an exorbitant salary for the services she provided. Evidence gathered by the police shows that the woman apparently received some one million shekels (about $250,000) for organizing the student festival in Eilat.

According to suspicions, Misezhnikov found a way to transfer the funds to his associate’s production company by claiming that the event encouraged tourism to Israel. The amount transferred was a substantial part of the Tourism Ministry’s budget for events to augment tourism, and the police suspect the funds were returned to him via the production company, which he allegedly used as a channel to divert ministry funds into his own pocket.

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