Settler Leader Used State Resources to Fund Illegal Outpost, While Israel Turned Blind Eye

Scheme involves mortgaging West Bank land obtained from the state to divert funds to outpost, with the help of a Canadian lawyer and the Civil Administration

Construction at the illegal outpost of Alonei Shilo.
Olivier Fitoussi

At the end of a winding road leading from the settlement of Karnei Shomron lies a new, steadily growing community with a row of single-family homes. This is no ordinary settlement, but an illegal outpost named Alonei Shilo. The government never approved its construction, at least not officially. Yet, houses are rising there one after another thanks to a complex scheme that involved the state and its official representative in the West Bank, the Civil Administration; settlement movement leader Zeev Hever, popularly nicknamed Zambis; a wealthy Canadian lawyer and outpost residents.

This scheme took place over an almost 20-year span.

It began with an illegal deal between the state and Hever – the CEO of Amana, a company that builds in West Bank settlements – in which the state gave him rights to build near the settlement of Ma’aleh Efraim. It continued with a surprising permit to mortgage those rights that Zambish received from the Civil Administration.

In the next act, the Canadian attorney entered the picture. In exchange for the building rights, he provided a loan to a company Zambish headed. Then, in the final stage, Zambish used that money to build houses in the north West Bank outpost of Alonei Shilo – houses against which the Civil Administration itself has issued demolition orders.

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One of the crucial turning points in this story occurred in 2009. Aerial photographs obtained by Haaretz show that until then, the outpost was a small neighborhood of about 50 mobile homes on a rocky hill. Some of those caravans have since been replaced with permanent houses. But the biggest change occurred on the northeast edge of the outpost, where several new permanent cottages were built. Most are occupied now.

Moreover, a visit to Alonei Shilo reveals that construction hasn’t yet ended: There’s still an active building site in the heart of the outpost.

Even settlement movement aficionados realize this combination of building so many permanent structures in the space of a few years, without building permits, in another illegal outpost to boot, is a little weird. Achieving all this involved a lot of money, which should have thrown up an obstacle: No bank would not offer a mortgage to construct without building permits.

Maybe no bank would, but apparently, a rich Canadian lawyer could.

To shed light on the players, we have to go back to the beginning, August 1998. Place: The Civil Administration headquarters. Present: The administration people and representatives of Binyanei Bar Amana, Zambish's construction company. Its sole purpose: to settle the West Bank with Jews.

The purpose for which the parties convened was to sign an agreement to develop 19 plots in Ma’aleh Ephraim into 19 housing units. The land cost Amana just 3,000 shekels per plot. Four months later the same parties reconvened, and signed another agreement for 15 more plots of land in Ma’aleh Ephraim.

The cost of the land seems extremely low, but people in the know told Haaretz that it’s actually routine; the state wants to encourage builders to develop the settlements.

Whatever the case, Zambish got the rights. He and Amana have been involved in development throughout the West Bank, including illegal outposts, including the recently evacuated Amona and Migron. In recent months Haaretz reported that Zambish signed utterly untrue statements regarding Amona and Migron, falsely stating that he owned the land there in order to get loans to build the outposts.

The contract for land in Ma’aleh Ephraim explicitly prohibits Amana to transfer its rights to anybody else without permission, or to mortgage it. Violating these rules could cost Amana the right to build the housing units, the contract states.

Meanwhile indeed a new neighborhood arose in Ma’aleh Ephraim, as planned. Zambish’s vision took form and shape. But after about 12 years, by 2010 at the latest, Zambish found a new goal, to which he devoted his full energy: developing the illegal outpost of Alonei Shilo.

The plan

When the settlers living in this outpost tried to build permanent homes they ran into a financing problem, since they could not secure a loan for an illegal outpost. But Zambish had a plan. In September 2010, a senior Yesha Council figure signed a loan agreement with a Canadian lawyer by which the latter would lend Amana half a million dollars. In the contract it states clearly that the loan was for building homes for five families in Alonei Shilo.

The lawyer wanted some kind of guarantee for the loan. Zambish offered him the rights to land and homes built in Ma’aleh Efraim. But the contract had another party: the Civil Administration. According to the Civil Administration-Zambish agreement, the former had to give its approval to using the land as collateral – and it did exactly that.

A source in the Civil Administration told Haaretz that the Civil Administration did not know what the loan was for. The Civil Administration commented: “The loan was approved according to the relevant rules. We want to stress the Civil Administration was not made aware that the loan was going to be used to build illegal structures, since the loan agreement does not state the location of the future construction.”

But the loan agreement states explicitly that the homes were to be built for settlers in Alonei Shilo. This raises the question of whether the Civil Administration ever asked to see the agreement, or whether Amana portrayed the collateral arrangement as one to be used for legal construction.

Dr. Ronit Levine-Schnur, a property rights expert at the Interdisciplinary Center Herzliya and a past legal adviser on land issues for the Judea and Samaria district, says that even if there is no clear legal obligation to ascertain the purpose of the loan, it seems the Civil Administration acted strangely in this case.

She says the legal examination the Civil Administration is required to conduct before giving its approval “has to include addressing a number of aspects, like the applicant's identity, the lender, any outstanding debts on the property and legal impediment to carrying out the pledge.” Checking for legal impediments, she said, includes examining “whether there is information about anything problematic about the property being mortgaged.”

Even though she notes the obligation to check into loan's purpose isn’t absolute, “if the loan's purpose is clear from the request or [written] on the loan documents in the hands of the responsible authority or his representatives, it seems unreasonable from a public interest perspective that the responsible official shouldn’t perform an additional examination of the request to approve the transaction.” In this case, as noted, the loan's purpose – to build homes for Alonei Shilo settlers – was written explicitly on the documents.

In any case, Zambish got his money to build the structures for the “five families of Alonei Shilo,” as the contract stated. But his dealings with the Canadian lawyer didn't end there. Two years later Zambish approached him again, and as in 2010 an identical loan contract was written, also for building homes for five families in Alonei Shilo. The loan was for an additional $500,000, and the Civil Administration approved mortgaging the plots in this case, too.

“Once again we see the degree to which Amana is involved in illegal activity,” said Hagit Ofran, head of Peace Now’s settlement monitoring team. “In the name of ideology, it’s prepared to break the law and solicit funds from foreigners to establish facts on the ground – in contrast to democratic decisions. It’s time the government stops protecting it and the illegal building machine in the territories. We will not remain silent until there is an investigation and those responsible are prosecuted.”

A study of aerial photographs from the area shows clearly how, since Zambish was enlisted in the Alonei Shilo project, the illegal outpost has developed tremendously, and it is continuing to grow.

“This phenomenon of an illegal outpost in which settlers can build themselves villas cheaply, without permits and be assured the government will defend them against any [High Court of Justice] petition is a phenomenon that must stop,” said Ofran.

Meanwhile, Israel is conveying contradictory messages. On the one hand, the Civil Administration has issued demolition orders against the structures in Alonei Shilo. On the other hand, it was the state that facilitated the building of those very same structures.

Amana did not respond for this piece.

The attorney who represented the Canadian lawyer when the latter provided the loans said he no longer represents him, and his current attorney did not respond to Haaretz’s requests for comment.