Greek Orthodox Church to Compensate JNF Over Scam That Targeted Both

A Jerusalem court ruled that the church must pay the Jewish National Fund $13 million over an unsigned agreement, which the Greek Orthodox Patriarch views as a kind of extortion

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Theophilos III in Jerusalem, in April.
Theophilos III in Jerusalem, in April. Credit: AP
Nir Hasson
Nir Hasson

It’s only the strange world of ties between the Greek Orthodox Church and the State of Israel that could have produced a ruling like the one handed down last month in the Jerusalem District Court. The Greek Orthodox Patriarchate in Jerusalem was ordered to pay the Jewish National Fund $13 million in damages over a scam in which both parties were victims. 

Judge Moshe Bar-Am’s unusual ruling orders the church to pay  compensation to the JNF – the Zionist institution also known by its Hebrew name, Keren Hayemeth LeIsrael – even though it is based on documents that neither the JNF nor the Greek Orthodox church signed.

In fact, the evidence presented to the court indicates that the documents – an unsigned agreement – is part of what might be considered a dubious transaction between the State of Israel and the Patriarch in which the Patriarch believed that if he refused to sign, he would not receive the recognition from the Israeli government required to fulfill his duties. 

In order to understand this strange turn of events we must go back to the year 2000, when three swindlers carried out one of the most sophisticated scams in Israel’s history. The three hired the services of the late prominent lawyer Jacob Weinroth. They managed to convince the JNF and the Israeli government that they were capable of handing them a dream deal that would extend the duration of the land lease that the church had granted for 520 dunams (130 acres) of prime land in the center of Jerusalem on which several prestigious neighborhoods were built. 

Nayot neighborhood in Jerusalem. Credit: Emil Salman

The Jewish National Fund, the worldwide organization based in Jerusalem, which is a separate entity from JNF in the United States, deposited $20 million with Weinroth. He, a notary and a doctor accompanied the swindlers on a visit to the Greek Orthodox Patriarch at the time, Diodoros I, to have him sign the agreement. It later turned out that the swindlers orchestrated the entire event. 

They asked the visitors to visit the Patriarch when he was very ill and had no understanding of what was happening. Finally, the swindlers forged Diodoros’ signature on the lease extension agreement, and Weinroth transferred the funds. 

The Greek Patriarchate challenged the transaction immediately after that, but in the interim, the JNF filed a cautionary note on the land registry limiting the Greek Orthodox Church’s ability to sell the land. The Israeli government indicted the swindlers, who were convicted and sent to prison. Still, even after it became apparent that both the JNF and the church had fallen victim to a sophisticated criminal scam, the JNF refused to retract the cautionary note that impeded the church’s ability to sell the land. 

The Patriarchate filed suit to have the note lifted, and the two sides began negotiating to try to settle the matter. The talks dragged on until 2005, when a new Patriarch, Theophilos III, was selected. He needed the recognition of the Israeli government, and from the JNF’s standpoint, this was an opportunity to pressure the church to pay compensation for what the JNF had paid to the scammers. 

Understanding the situation also requires an understanding of the status of the Greek Orthodox Patriarch in Jerusalem. He is the powerful head of the church in Israel and elsewhere in the region and the leader of a major religious community that has ownership of significant portions of the Church of the Holy Sepulchre in Jerusalem, other holy sites and considerable land and real estate around the country. 

Nevertheless, to carry out his duties, the Patriarch required official recognition from the Israeli government. Theophilos III was appointed in 2005 by the church’s Holy Synod in Jerusalem to replace Irenaios. The latter was ousted after a transaction in which he sold buildings in Jerusalem’s Old City to the Jewish nonprofit organization Ateret Cohanim. 

The Israeli government took its time recognizing Theophilos’ appointment, and under the circumstances, Theophilos viewed the settlement proposed by the JNF as one he could not refuse. 

In December 2007, an unlikely group of people met at Weinroth’s office: two retired district court judges; Avraham Duvdevani, then a senior JNF official who is now the organization’s chairman; other lawyers; and Theophilos III himself. The meeting had a ceremonial air to it. 

Those in attendance were given copies of the settlement agreement, requiring the Patriarchate to pay $13 million in exchange for removing the cautionary note. In the preamble, the agreement states that the parties committed to making every effort to settle their differences amicably. The agreement also states that once Theophilos receives notice of the Israeli government’s recognition of his appointment, the Patriarchate will inform JNF. The new Patriarch would then be responsible for obtaining the synod’s approval of the settlement agreement.

One of those present read the agreement’s provisions aloud, but no one actually signed it. The two judges, who were present at Weinroth’s invitation, signed the meeting minutes. 

Apparently, the two sides were uncomfortable focusing on the fact that the negotiations and the meeting in the presence of the judges took place under pressure from Theophilos to obtain the recognition of the Israeli government. But the sense that there was a link between the expected appointment of the new Patriarch and the settlement agreement is reflected in testimony and the record of the court proceedings. 

For example, Yaron Elhanani, a lawyer for JNF who was present at the meeting at Weinroth’s office, said: “Let’s put it this way …. The Patriarch didn’t say it, but we reasonably thought that when the Patriarch speaks about clearing his desk regarding relations with the government and wants to settle the relations so that everything would be all right, in this matter, he also sees a benefit in advancing his appointment … and we wanted to maintain that motivation.”

Later the JNF recruited former cabinet minister Rafi Eitan of the Pensioners party, who headed the Ministerial Committee on Jerusalem and the committee that considered the Israeli government’s recognition of Theophilos. Eitan’s job was to verify that the Patriarch didn’t deny the agreement.  “Rafi Eitan is the one who can assuage the Patriarch and tell him – ‘Listen, it’s a matter of days … We’re finishing it up,” Duvdevani said in court. 

Rehavia neighborhood in Jerusalem. Credit: Emil Salman

That same December, government recognition of Theophilos’ appointment was issued. Immediately thereafter, pressure on him to sign the settlement agreement resumed. In the ensuing months, he put off signing based on a variety of explanations, and ultimately, he denied that an agreement had been reached at all. 

In his court decision, Judge Bar-Am barely related to the issue of alleged extortion. The decision focused on contract law and ruled that the Patriarchate’s decision not to sign the agreement amounted to unfairly terminating the negotiations. The judge accepted the JNF’s lawyers’ position that the talks had “crossed the point of no return” and that by exchanging drafts and attending the meeting at Weinroth’s office where the agreement was read, the Patriarch’s actions were the equivalent of his signature. 

But Yair Assael, one of the lawyers who represented the Patriarchate, was scathing in his description of the conduct of the JNF and the government, noting in part that the amount the JNF was to receive in the settlement, $13 million, was  the total amount that it lost in the earlier scam. JNF had paid $20 million, but the police had recovered $7 million of it. 

Assael also took the late Jacob Weinroth to task, accusing him in a court filing of pursuing and perhaps even initiating a settlement described as “the Christians making up for what the Jews stole.” Assael called the settlement amount a ransom paid to free prisoners, saying that the prisoners were the allegedly stolen land. 

He also raised other arguments that the court rejected relating to the Patriarch’s alleged consent to the agreement, pointing out in part that the agreement itself stated that it was not binding without a signature and the consent of the church’s synod.

Never in Israel had a court required a party to an unsigned agreement to pay tens of millions of shekels, the church’s lawyer claimed. 

The settlement proceeds would not be paid by the Patriarchate in any event. Instead, they would be paid by Nayot-Komemiyut, a company that purchased the church land in another controversial transaction in 2016. But in the view of the church and many Jerusalem Christians, the court’s decision is another in a series of unfair actions taken against the Christian community in the city. They see it as nothing less than sophisticated extortion perpetrated by the government and the JNF against the most important religious leader in the city. 

The Patriarch, whose church intends to appeal the ruling, issued a declaration to demonstrate the injustice that he thought was done to the church. “By comparison, take, for example, a case in which an attempt is made to fraudulently steal land owned by a Jewish community in any country in Europe – and that that same community was defrauded and never agreed to sell its land and also never received any payment,” Theophilos stated. 

“Now let’s assume that this same Jewish community is required by the authorities to pay them a sum of money to make up for the sum that the government lost in the case in which land was stolen by thieves. One can only imagine what the stance of the Foreign Ministry, the judiciary, and the public in Israel would be in such a situation,” he said.

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