It might not be surprising that Prime Minister Benjamin Netanyahu recently met with Udi Angel, a partner in Reshet, one of the two concessionaires running Channel 2 television.
After all, Reshet has been in financial straits and the future of Channel 2 as a whole is unclear. Netanyahu could have tremendous influence over Reshet’s operations, through his choice of the next communications minister or as acting minister himself. In addition, Reshet, which recently figured out how to court politicians who have influence over its situation, broadcast a film this week in cooperation with Sara Netanyahu, the prime minister’s wife.
But it ought to be surprising that Netanyahu’s meeting with Angel passed so quietly, particularly since neither the future of Reshet television nor Sara Netanyahu were necessarily the prime topics of conversation.
Four days after the meeting, it transpired that Israel Chemicals was in the process of securing more lenient terms from the Sheshinski 2 committee, which is responsible for developing recommendations on how much money the government should receive for the right to exploit the country’s natural resources. So what’s the connection between Angel and Israel Chemicals?
Though he is best known for his role in Reshet, Angel is also a partner, with the Ofer family, in the Israel Corporation, which controls Israel Chemicals.
The Israel Corporation also controls Zim Shipping Lines, Oil Refineries. and Tower Semiconductor. Although Angel only owns a small piece of the Israel Corporation, it’s worth a lot of money. And he was a director for many years for a group of Israel Corporation subsidiaries, and contributed to making it the giant that it is (as well as to its failures).
Angel also has a considerable personal interest in the extent of the royalties that Israel Chemicals will be required to pay for exploiting the country’s natural resources.
One way or another, it’s clear that Angel would have favors to ask of Netanyahu.
So did the prime minister and Udi Angel talk about Sheshinski 2 and Israel Chemicals? And if they did, did their chat have any influence on the panel’s report? One would hope not, but we don’t know and probably never will.
It would be reasonable under such circumstances, however, for there to be transparency. We’re not talking about Iran’s nuclear program here.
After all, if Finance Minister Yair Lapid, who in his former life as a television journalist was employed by Reshet, had met with an official from the Israel Corporation a few days before the Sheshinski 2 report, the outcry would have been massive. (And speaking of Lapid, both Yair and his wife, Lihi, have been guests at Angel’s annual Independence Day bash; Reshet, for its part, has plans for a show for Lihi Lapid.)
Let’s not forget Dankner
Netanyahu has also had meetings out of the public limelight with Nochi Dankner, when he was the country’s most powerful business tycoon, before he was deposed as the controlling shareholder of the IDB group. The Prime Minister’s Office has refused to provide detail about the meetings, however, so here too, the lack of transparency means we don’t know what he discussed with Netanyahu.
What we do know is that the prime minister runs in similar circles as business leaders like Dankner and Angel. Dankner and Netanyahu have close ties with Nir Hefetz, the Netanyahu family spokesman who — and here this comes back to Angel as well — served as the intermediary over Sara Netanyahu’s appearance in the Reshet film. Hefetz is also Dankner’s personal spokesman, having replaced Rani Rahav, who is Angel’s spokesman.
As for Dankner’s life now that he is no long the controlling shareholder of IDB, hold your tears.
Despite his mountain of debt, he still lives in a 50 million shekel ($13.4 million) home in the upscale Tel Aviv suburb of Herzliya Pituah. He and his wife drive luxury cars and his children live in fancy homes in Tel Aviv. And Dankner gets to travel in and out of the country even though he is under criminal suspicion. Where is his money coming from? Is a bank continuing to extend him credit? Does he have cash stashed away for a rainy day?
We just don’t know, although it is clear that he gets treatment no other bankrupt debtor gets. For the past three years, Dankner has not been paying his bank debt. And what do the banks do? Nothing. Although IDB group bondholders ultimately had Dankner removed as controlling shareholder, the banks wanted to allow him to remain in control and continued to extend credit to him almost up to the last moment.
In theory, though, Dankner has been just another debtor for the past year. But he is still a member of the club: major donor, outspoken Zionist, media darling. When TheMarker reported that he recently flew to the United States on business class, Dankner explained it as a ticket paid for by the “entity” that invited him there, part of his continuing effort to pay the debt he owes. But it’s all rather aggravating. It wouldn’t hurt Dankner to show greater transparency regarding where he is going, whom he is working for and whom he is advising, if anyone.
Let’s assume that someone else with deep pockets is paying to support Dankner’s lifestyle. Shouldn’t it have been incumbent on Dankner to say that he would rather fly economy class, with the savings going to help pay his debt off? Even people with small overdrafts fly economy, which may not provide much legroom, but it’s not so awful and it is over in a matter of hours. And in economy class, he could have rubbed shoulders with all those folks who lost money when their pension funds invested in IDB over the past decade.
However annoying Dankner’s response may have been, it’s nothing compared to the excessive lines of credit that senior bank officials extended to him or the people who are now dawdling when it comes to forcing him to pay debts for which he is on the hook personally. The major financiers of his privately held companies are Bank Hapoalim and Bank Leumi.
Once again, personal relationships may have come into play.
Hapoalim CEO Zion Kenan is considered very close to Dankner, to an extent that Dankner and his cousin, Danny Dankner, who had been chairman of the bank, played a role in Nochi Dankner’s rise to one of the top spots in the Israeli economy. Leumi CEO Rakefet Russak-Aminoach wasn’t a close friend, but she had considerable social ties with Nochi Dankner. Furthermore, her reputation suffered when she was seen as someone who was giving Dankner a break. It’s odd in retrospect to think about the criticism that the banks leveled at other institutional investors about how they managed their debt when it then turned out that the banks themselves have done a much worse job.
We know almost nothing about the debt arrangement taking shape between Dankner and the banks, or when in the next year or two he will be forced to sell his house. These major deals are being reached behind closed doors. And the supervisor of banks, David Zaken, is maintaining his silence. The banks supervisor also kept mum when Bank Hapoalim extended a huge unsecured loan to Dankner, and when Bank Leumi initially planned on secretly writing off Dankner’s personal debt.
One banking source said that, in the context of the negotiations of Dankner’s personal debt, the banks have required him to tone down his lifestyle to reduce the chances of a public uproar over the bank debt settlement taking shape. The banking sector, the source said, views Dankner’s business-class flight as a violation of that understanding.
It’s all a bit strange, in that modesty of lifestyle is not normally a provision of a debt rescheduling agreement between banks and a bankrupt tycoon, and one wonders whether a violation of such a provision is even legally enforceable. What is galling, however, is the subtext of what the banks are saying to Dankner: Do what you want. Pamper yourself. The important thing is not to be too ostentatious about it because we don’t want a headache.
The banks may be aware of income sources enabling Dankner to maintain his lifestyle, limiting their concern to the possibility of a public outcry. But again, we just don’t know.
In short, the banks — like some high-profile public figures — may be after the same thing: keeping the public in the dark. The less the public knows, the thinking seems to go, the more likely it is that everything will turn out all right for the Udi Angels and Nochi Dankners of the world.