Making Water From Air: Why Is Netanyahu Doing PR for This Israeli Startup

What lies behind Prime Minister Netanyahu’s apparent support for the Mirilashvili family’s Water-Gen company, and is there any connection between that and the favorable coverage he gets from Channel 20, which the family owns? ■ Investigation

Netanyahu and Mikhail Mirilashvili
Mendy Hechtman/ ZAKA

In August 2017, UN Secretary General Antonio Guterres came to Israel to discuss the humanitarian crisis in the Gaza Strip with Israel’s political leaders, and in particular the serious shortage of drinking water in the Strip. Prime Minister Benjamin Netanyahu took advantage of the visit to present four Israeli startups to Guterres – among them Water-Gen, which has developed a unique technology to produce drinking water from the air.

The company’s chairman, Maxim Pasik, had presented his wares to the UN secretary general, and even told him that he had written to UNRWA to initiate a project that would provide Gazans with drinking water.

“One thousand of our devices would solve the problem,” claimed Pasik. “How much does such a unit cost?” Netanyahu asked him at the end of his presentation. Pasik’s reply: “$120,000.” The prime minister scribbled something on a piece of paper. “$120 million!” he called out, glancing in the direction of Guterres. “Yes,” said Pasik, completing Netanyahu’s sentence, “and that could solve the water problem in Gaza entirely.”

This incident is one in a list of many business opportunities enjoyed by Water-Gen – under the sponsorship of the prime minister. Indeed at a number of official events in recent years, Netanyahu has praised the company in the presence of leading diplomats, heads of state and world leaders.

The premier’s support for an Israeli initiative is understandable: Every shekel that enters the bank accounts of a company based in the country boosts the GDP and fills state coffers with tax money. But there’s another important fact: The controlling owners of the company in question are the Mirilashvili family, which also owns Channel 20 – an unprofitable business that showers the prime minister and his family with favorable coverage, and recently even started to broadcast its own news program.

Remembering Moses

Russian-Israeli billionaire Mikhail Mirilashvili started investing in Water-Gen in 2014, and now holds 100 percent of its controlling shares. Until he became involved, the story of the company was typical: A determined entrepreneur, in this case Arye Kohavi, tried to implement his vision of producing drinking water from the air.

Water-Gen, Mirilashvili once said, is not just a business. In a joint interview with company chair and close adviser Pasik, published in Globes in April 2017, Mirilashvili described how he fell in love with the company’s vision and decided to invest in it – contrary to the advice of his consultants: “We invited Kohavi for a meeting. He told us about the company and its technology. I already imagined how we would save the world with it. I was convinced that everyone thought like me, but after Arye left the room, when I asked the people sitting there for their opinion, they said: ‘Forget about it.’” Despite that, Mirilashvili decided to get involved; the sum he invested has never been publicized.

In the same interview Mirilashvili admitted that the company was not yet involved in actual sales per se, but only “accumulating orders,” as he put it. In the past Water-Gen, which Kohavi started in 2009 in Israel, which also operates in the United States, focused mainly on supplying drinking water to armies; the company initiated a number of trials and pilot programs with various military institutions. After the wealthy partner Mirilashvili came on board, however, the focus was changed to providing drinking water to regions where there is a water shortage. Thus Water-Gen gained access to senior decision makers the world over.

In late March 2018 even U.S. President Donald Trump took the time to learn about Water-Gen’s techology. He met with Edward Russo and Rabbi Yehuda Kaploun, the co-CEO and president, respectively, of Water-Gen in the United States, at the president’s estate in Mar-a-Lago in Florida. After the meeting the company posted on its website that two months earlier, it had reached an agreement for an experimental cooperative project with the U.S. Environmental Protection Agency.

How did company representatives manage to organize a meeting with one of the busiest people in the world, and how did they end up signing a deal with the EPA? The answers to these questions can apparently be found in the calendar of EPA Administrator Scott Pruitt, who in 2017 had two meetings with Water-Gen representatives Kaploun and Pasik.

About a month ago The Wall Street Journal wrote that Pruitt’s first meeting with Water-Gen representatives, on May 29, 2017, was recorded in his diary as having taken place “at the request of Sheldon Adelson” – the American billionaire who owns hotels and casinos worldwide, publishes the daily Israel Hayom and is the patron of both Netanyahu and Trump. Adelson refused to respond to the Journal article, but one of his associates said he has no business interest in the company although he is impressed by its activity.

The positive attitude Netanyahu himself has had toward the company since Mirilashvili became involved has been quite evident in recent years, particularly at certain public events, many of them documented on the Water-Gen website. One was held in September 2016, during the annual UN General Assembly meeting in New York, when the Israeli delegation held a special event to which 26 representatives and heads of state from Africa were invited, to expose them to various Israeli technologies. Water-Gen was among the firms represented there.

In addressing that event, Netanyahu and Israel’s UN Ambassador Danny Danon both mentioned the company’s technological miracle. Danon even compared Water-Gen’s technology to the biblical miracle when Moses struck the rock until water flowed from it. At the end of Pasik’s presentation to the dignitaries, the guests were given cups with water that had just been created in the Water-Gen condensing machine. Netanyahu, who was sitting next to Rwandan President Paul Kagame, sipped from his cup, lifted it and said: “It’s lighter than air.”

The wonderful idea of producing water from air is not unique to Water-Gen, nor is it new. There are quite a number of companies in the world with similar aspirations, some of which have existed for two or three decades. Water-Gen claims that its uniqueness lies in its efficiency. The company says that the cost of creating water in its device is two cents per liter, which they claim is substantially lower than that of its competitors.

Water-Gen also received a compliment in the prime minister’s speech at the UN General Assembly a year later, in September 2017. In the typical part of Netanyahu’s speech referring to Israel as the startup nation, he mentioned the Israeli technology that “is helping Africa” by “turning air into water.”

The subject of aid to Africa also came up at the annual conference of the American Israel Public Affairs Committee, held in Washington on March 6, only one day after it became known that Nir Hefetz, the Netanyahu family’s former media adviser, had turned state’s evidence against the premier in Case 4000 (Bezeq-Elovitch). Netanyahu managed to deliver a captivating speech, in everyone’s opinion.

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“I just heard about an African woman in Africa, has to walk eight hours a day to give water to her children – four hours one way to a well, four hours back,” said Netanyahu, while in the background there was a picture of one of Water-Gen’s condensers, with the company logo clearly visible. “And a young Israeli company brought in this technology that improves on Moses. You remember Moses? He brought water from a rock? They bring water from thin air,” he boasted. “They bring water to Africa, to millions of people in Africa – Israeli technology!”

When asked by TheMarker for a comment on the prime minister's remarks about Water-Gen at the recent AIPAC conference, his bureau said: “The company in question is one of many that the prime minister presents,” was the response in Netanyahu’s bureau. They claim that alongside the Water-Gen logo, those of Gett, Waze, Via and other Israeli companies were also displayed. “The prime minister is proud of the achievements of Israeli industry, which he works to nurture, and whose achievements he promotes successfully during his visits abroad and among his international contacts,” they added.

But an investigation by TheMarker reveals that while the logos of the other Israeli firms were concentrated on one slide, Water-Gen got a large and exclusive image, which was displayed on a screen behind Netanyahu.

It emerges that the prime minister exaggerated somewhat at the AIPAC event: Water-Gen’s technology still doesn’t serve millions of Africans, and the company doesn’t claim that in its advertisements. Water-Gen may have the potential to do so in future, which may be wonderful – but at this point only a few dozen of its large devices exist, which can serve tens of thousands of people at most.

According to the firm’s ads, only recently has it reached the stage of serial manufacture of its products, after its announcement in January that it has signed a memorandum of understandings in advance of an agreement to have its condensation machines produced by India’s Tata corporation – a development that took place during Netanyahu’s official trip in January.

The delegation that traveled to India with the prime minister included Michael Rutman, a member of Water-Gen’s board of directors, who signed the agreement with Tata at a festive ceremony. If the partnership with the corporation really does pan out, this is a golden opportunity for a company at the stage where Water-Gen finds itself. The memo of understandings, incidentally, was signed only after Mirilashvili and Pasik met with the controlling owner and chairman of the Indian corporation, Ratan Tata, in India in November 2017. At that time the two also met personally with Netanyahu’s friend, Prime Minister Narendra Modi.

The name of the Tata corporation and its controlling share holder also came up in the investigation of Case 1000, in which Netanyahu is suspected of receiving bribes from businessman Arnon Milchan. In this case the police recommended prosecuting the prime minister, one reason being the suspicion that in return for luxury goods like cigars and champagne provided by Milchan, at a cost of about 750,000 shekels ($209,000) – Netanyahu worked to promote a joint initiative of Tata and Milchan to build a free trade zone on the Jordanian border. The initiative was not implemented in the end.

Netanyahu, Mirilashvili and Yehuda Meshi Zahav, founder of Zaka
Moshe Milner / GPO

The trip in January to India was one of several by Netanyahu in which he was joined by Water-Gen personnel. Mirilashvili, Pasik and their friends could also be found alongside the prime minister during jaunts to Australia in February 2017 and to Russia in January 2018.

The organization that draws up the names of people in economic delegations that accompany the prime minister abroad is the Israel Export Institute. In response to a question by TheMarker, the institute replied that Water-Gen “did in fact participate in the prime minister’s delegation to Australia and India, but the Export Institute has no connection to the company’s participation in any delegation to Russia or to the event at the United Nations.”

A promotional video for Water-Gen even found its way into an interview given by the prime minister to CBS’ popular “60 Minutes,” in December 2016. As Netanyahu praised Israeli technology, part of the Water-Gen clip was shown to prove that the country is an oasis of flourishing startups in the heart of the Middle East.

It’s hard to understand why and how program moderator Lesley Stahl and her staff chose to use the example of a company that at the time, according to its owner, had not yet even started to market its product, to illustrate the vital, flourishing Israeli technology. By press time we hadn’t received a response from CBS.

Jail and aliyah

Mikhail Mirilashvili, 58, is a hard nut to crack. He was born in Georgia and accumulated his wealth in Russia during the fall of communism, in circumstances that have not been fully revealed. Since 1993 he has been an Israeli citizen, although he actually moved here only in 2009, after finishing an eight-year prison term in Russia prison for conspiracy to kidnap, a claim that he still denies. After his release he appealed to the European Court of Human Rights in Strasbourg, which declared that his trial did not constitute “due process,” because the legal authorities took into account certain evidence that did not constitute direct proof of the suspicions, but they ignored testimony favorable to Mirilashvili.

The person listed as controlling shareowner of Channel 20 is Mikhail’s son Yitzhak Mirilashvili, 33, who has served in that capacity since 2012. It started out as a Jewish heritage channel, but soon revealed its aspiration to become a right-wing news outlet with a clear pro-Netanyahu line.

In December 2017 the channel began a noisy campaign centered around the claim that the owners were considering returning the franchise and closing the channel due to the insistence of the Cable TV and Satellite Broadcasting Council to enforce the licensing rules, and to demand that the channel concentrate solely on heritage issues rather than current events.

In January 2018 the Knesset approved the Channel 20 Law initiated by Likud, which stated that only 51 percent of the broadcasts would deal with heritage (as compared to 75 percent beforehand). The channel was also given permission to air a news show, as it has recently begun to do.

There is a wealth of evidence of Channel 20’s positive treatment of Netanyahu – from the “nodding interview” granted to the prime minister’s wife Sara Netanyahu by political commentator Shimon Riklin, during which she mainly talked and Riklin mainly nodded; to systematic attacks on other Israeli media outlets for their treatment of Netanyahu; and to Dana Somberg’s interview with the police Commissioner Roni Alsheich during the channel’s first news broadcast, when Somberg referred to Case 1000 as an affair involving the receipt of cigarettes – when it is actually an affair in which the prime minister is suspected of receiving goods worth about 1 million shekels.

Another person who is connected to the Netanyahu family and did business with Channel 20 is Netanyahu’s former media adviser Nir Hefetz, who’s now turned state’s evidence. In 2017 TheMarker discovered that Hefetz was involved in an initiative with Channel 20 to promote content marketing on the channel. Just before Independence Day last month, Channel 10 reported that Hefetz had given the investigators information relating to the relationship between Netanyahu and Mirilashvili and to Channel 20. Hefetz’s associates deny these claims.

The nature of the relationship between Netanyahu and Mirilashvili also came up in the context of a battle that Mirilashvili is waging against his brother, Gavriel Mirelli, over the dismantling of the partnership in the gambling company they managed together. During the proceedings, Mirelli's lawyers showed him a picture of Mirilashvili together with Netanyahu and the founder of Zaka (an emergency response organization), Yehuda Meshi Zahav.

Mirilashvili tried to downplay the importance of his ties with Netanyahu and said that he had met the prime minister by chance, while he was serving as the chairman of Zaka, at an event held for the organization’s volunteers in 2012. But despite the attempt to minimize the ties between the two, Netanyahu and Mirilashvili met several more times since that picture was taken – during the visit to Israel of the UN secretary general in August 2017, and during the prime minister’s visit to Moscow in January.

The prime minister refused to reply to TheMarker’s question as to how many times and under what circumstances he has met with Mirilashvili.

In response

Arye Kohavi, the founder and CEO of Water-Gen, offered this response: “Only recently, in a survey conducted by Economy Ministry for Israel’s 70th Independence Day, was Water-Gen chosen as one of the nine greatest inventions in the country’s history. This can be added to our ranking in the magazine Fast Company as one of the 50 most innovative companies in the world, alongside companies such as Google, Apple and AirBnb, and to my appearance on the list of the ‘100 Leading Global Thinkers of 2014’ in the prestigious Foreign Policy magazine. In addition, as part of an article published by your newspaper, already in 2014 we were described as a company that could ‘solve the world water crisis,’ bearing ‘one of the most interesting tidings of our time.’

“There’s only one reason for that: Water-Gen’s innovative technology for producing water from air, which is the only technology of its kind in the world. Therefore, in order to bring this message to the hundreds of millions of people the world over who don’t have access to drinking water, we have participated and will continue to participate in national delegations led by the president and the prime minister, just as dozens of other Israeli companies are doing.

“We are proud and grateful that the prime minister boasts about our technology at international forums, just as he boasts of a series of other Israeli inventions. It’s important to stress that we have never turned to the prime minister or any of his staff on this matter, either directly or indirectly.”

Added Kohavi: “Regarding the implication that there is any connection between Mirilashvili’s investment in the company and its mention by the prime minister at international forums and participation in official delegations, we emphasize that this is an absolute lie. Even before Mirilashvili started investing in the company, Water-Gen was wooed by government ministries that wanted to include it their delegations abroad, and it participated in several delegations.

“However, before Mikhael’s involvement, Water-Gen was involved mainly in the sale of devices for military purposes, including to the armies of the United States, Great Britain and so on, while the sale of devices for civilian applications remained a vision only. When Mirilashvili took over we decided to realize the vision and enter the civilian arena full force, which turned us almost overnight from a company relevant mainly to armies, to one that’s relevant to hundreds of millions of civilians worldwide, and from a company relevant mainly to security delegations, to one whose technology the prime minister can brag about from the dais of the United Nations and in meetings with world leaders.”

The response received by TheMarker on behalf of Michael Miralashvili: “Mirilashvili met the prime minister at several official events in his role as vice president of the World Jewish Congress and as president of the Euro-Asian Jewish Congress. Mirilashvili is not a member of the prime minister’s circle and has never had personal or business meetings with him.

“Moreover, Mirilashvili has never approached the prime minister with a request that he promote one company or another at some event. Therefore, the claims and implications on this matter are false. The mention of Water-Gen’s technology in the prime minister’s speeches was done only thanks to its innovativeness and to the fact that it could save the lives of millions of people worldwide. The proof is the fact that he never mentions the company’s name in his speeches, and only mentions its technology, along with many other technologies.

“Regarding the prime minister’s latest appearance at AIPAC, when the name of Water-Gen appeared in one of the presentations, that was done without the company’s previous knowledge, without a request from it and without it having anything to do with it.

“Regarding the lawsuit submitted to the court by Gavriel Mirelli about the arbitration between the brothers, the claims in the lawsuit had been made already in the past and rejected by three different instances, including the Supreme Court, which ruled that Gavriel must pay his debt totaling millions of dollars. The same was true in the discussion held recently in court with the request to declare Mirelli bankrupt. Despite his claims, the court handed down an injunction against the sale and transfer of assets held by him and his relatives, as well as a conditional receivership order against Mirelli.”

The response of Channel 20: “Our success is leading to attempts at slander and the spreading of false and tendentious information. For example, the attempt to connect presumably positive coverage of the prime minister and the promotion of Water-Gen. The channel has no connection to the above-mentioned company – as proven by the fact that, as opposed to all the media outlets in Israel, including your newspaper, the channel has never reported on this company.

“On the other hand, had the honorable reporter watched the channel’s broadcasts, he would have discovered that various voices are heard there, both in favor and against the government’s policies. In this context, the channel speaks favorably of the prime minister and his family – this is a legitimate viewpoint in the country, just like the critical viewpoint, which is also heard on the channel.

“As far as the attempt to connect this to the regulation of the channel: The claim that the amendment to the Second Authority for Radio and Television Law was beneficial and eased regulation of Channel 20 is surprising. The opportunity to broadcast news is not a benefit or easing of regulations; it was understood already in the channel’s original licensing agreement in 2013.

“Nor was [the legislative move] initiated by the Netanyahu government: It was an initiative of the Knesset. The amendment was passed with a strong majority of 36 MKs, from all the factions, including Meretz and the Joint List, with two MKs opposing and only one abstention. In addition, it was your newspaper that wrote that the amendment in effect increases the regulation of Channel 20 by subordinating it to the Second Authority and to many rules of ethics.

“Regarding the claim that we were the only channel on which the prime minister was willing to be interviewed – there’s no media outlet in Israel, either large or small, that would refuse such an interview. That’s why it’s a surprising accusation.”

The response on behalf of the prime minister: “There isn’t an iota of truth in the claims. The prime minister and Mirilashvili are not friends. The prime minister didn’t promote Water-Gen in any way, and didn’t mention the company by name at the AIPAC conference. The prime minister and his bureaus didn’t intervene at all in the choice of the companies represented at the exhibitions mentioned in the article.

“The points brought in the article point mainly to a lack of understanding. All the business delegations that set out at the same time as the prime minister’s flights are organized by the Export Institute, which publishes the same call for proposals to all companies, under its sole responsibility. All the agreements signed in the context of the delegations between the private companies are the responsibility of the companies alone, and the Prime Minister’s Office has nothing to do with it.

“Only cynicism and blind hatred could turn a tremendous achievement such as the creation of drinking water from air, into a bad thing that should be downplayed. Israeli technology firms that bring relief to millions of people in the world are a source of national pride, and the prime minister will continue to present them proudly at every opportunity.

“Regarding Channel 20, for years the prime minister has been leading a declared policy to encourage diversity in the media, in a manner that will enable suitable representation and will reflect the array of opinions among the public, and that’s why he was elected. His determination to make changes and to break the monopoly of opinions in the media, has turned him into a target for unbridled attack by the media outlets.

“It’s absurd that the left-wing newspaper TheMarker from the Haaretz Group, some of whose writers boast a profile picture on the social networks, in a friendly shot with the opposition leader, complains that the right-wing public finally has a home in which to express an opinion.”