U.S. Paid Netanyahu Confidant's Firm $150k While Embassy Was Being Moved to Jerusalem

The sum was paid to the law firm for legal services to the consulate in Jerusalem during the month in which the embassy transferred to the building. An embassy official says the U.S. government has been using the firm's services 'for ordinary business for over 30 years'

A sign pointing toward the U.S. Embassy is seen beside banners celebrating the transfer, Jerusalem, May, 2018.
Olivier Fitoussi

The U.S. government paid $150,000 to a law firm closely connected to Prime Minister Benjamin Netanyahu, E.S. Shimron, I. Molho, Persky& Co, during the period in which the U.S. Embassy in Israel was moved from Tel Aviv to the Arnona neighborhood in Jerusalem. The information appears on an official U.S. government website on federal government spending, USASpending.gov.

The website shows the money was paid to the law firm for legal services provided to the U.S. Consulate in Jerusalem from April 9, 2018 through May 14 – the exact period in which the Embassy officially moved to the consulate building in the capital. The law firm has represented the U.S. Consulate for years, but no other payments were recorded on the website.

Two partners in the law firm are considered to be extremely close to Netanyahu. David Shimron is Netanyahu’s cousin and the family’s personal lawyer. Isaac Molho, Shimron’s brother-in-law, is also considered to be very close to Netanyahu and served as his personal envoy on many diplomatic missions for years.

>> A discreet man for sensitive missions: Meet Isaac Molho, Netanyahu's confidant

The conflict of interest agreement Molho signed before becoming Netanyahu’s unpaid special diplomatic envoy states the law firm represents the U.S. Consulate on “matters concerning mostly planning and building of the diplomatic compounds in Jerusalem and Israeli labor law for some 20 years.”

Molho promised at the time not to deal with any matters concerning the U.S. Consulate in Jerusalem, the conflict of interest agreement stated, adding that matters concerning the client would be handled by other lawyers in the firm. 

Molho recently resigned his diplomatic post after he was investigated, along with Shimron and others, in the alleged corruption concerning Israel’s procurement of submarines and missile boats from Germany, a probe that Israeli police have dubbed “Case 3000.”

>> Bibi bombshells explained: Your updated guide to all the Netanyahu cases

In preparation for turning the consulate into an embassy, it was discovered that transfer would require infrastructure work on and around the consulate building. This included the construction of a 3.2-meter-high perimeter wall and the paving of a new exit road as part of the new security requirements for the embassy.

Finance Minister Moshe Kahlon said at the time that he would use his authority under the Planning and Building Law to waive the requirement of a building permit for the work.

Shachar Ben Meir, an attorney, asked Attorney General Avichai Mendelblit to prevent the issuing of such a waiver as a matter of equality before the law. He said Netanyahu’s involvement in the granting of such a waiver from a building permit should be seen as a forbidden benefit to a major client of the Shimron, Molho law firm, with which Netanyahu has close personal relations with its senior partners.

At the time, sources in the Prime Minister’s Office told Haaretz that Netanyahu was not involved in the initiative to grant such a waiver and it came from Kahlon without any prior coordination, or request, from the PMO. In addition, the PMO said it did not know about the involvement of the Shimron, Molho, Persky law firm in representing the consulate in the past – even though Molho had explicitly listed this 20-year-long relationship in his conflict of interest agreement.

The law firm said Shimron and Molho do not handle matters concerning the American consulate and referred the matter to Orrin Persky, the partner who has handled the legal affairs of the Consulate since 1989. He told Haaretz that he does not know the details of the payments during any specific period, but the firm is paid by the hour for work carried out for the consulate and “we are always dealing with what is on the agenda.”

Persky said it is reasonable to assume that, in this case, the work was related to the planning and building issues surrounding the moving of the embassy, but he was not able to provide details concerning his clients.    

A U.S. Embassy official said: “As a general rule, we do not comment on matters relating to our retention of counsel. The U.S. Government has been using the services of Mr. Persky and his firm for ordinary business for over 30 years.”

The Prime Minister’s Bureau said: “It is absurd to claim that the decision to move the Embassy to Jerusalem and to implement the policy of the State of Israel for decades concerning the transfer of foreign embassies to Jerusalem, stems from the fact that the Shimron, Molho law firm is employed by the consulate. It should be noted that the Prime Minister did not deal with and did not intervene in matter of building permits.”

Trump estimated in April that the embassy move would cost $300,000 to $400,000, refusing to approve a $1 billion plan for its opening.