Shimon Peres’ Son Explains Former President's Contract With Bank Hapoalim

'It was my mistake,' Chemi Peres says. 'Shimon Peres doesn’t ascribe value to money.'

Former President of the State of Israel Shimon Peres Dec. 18, 2014.
AP

“The contract that we signed with Bank Hapoalim was a mistake, and I take responsibility for the mistake,” Chemi Peres, one of the sons of 91-year-old former President Shimon Peres, told TheMarker on Monday, after the former president backed out of a contract in which he would have been paid $30,000 a month for lectures that would have been used to promote the bank’s business overseas.

The contractual relationship, which was disclosed last week by TheMarker and rescinded a few days later, was carried out through a company called Peres and Associates, which was established by Chemi Peres. The younger Peres, one of the founders of the Pitango Venture Capital firm, heads Peres and Associates and also owns the stock of the company.

“My father was supposed to give one major lecture and maybe another two smaller ones for Bank Hapoalim abroad and, due to a technical mistake, a monthly contract was made instead of charging for the lectures on a one-time basis,” Chemi Peres told TheMarker.

“My dad doesn’t work at the company,” the younger Peres said, in reference to Peres and Associates. “He doesn’t own a single share. He is completely divorced from this whole business. I thought it necessary to build the business this way. Some might say that it could be done differently. Maybe I made a mistake.”

If the company’s profits are directed to the activities of the Peres Center for Peace [a non-profit organization founded by Shimon Peres in 1996,] as you have stated, why do you need to set up a business corporation that employs people and rents offices at all?

“There are three ways to raise money,” Chemi Peres replies. “The first is through contributions, and that’s easier for universities or hospitals than activities such as the Peres Center for Peace [which is involved in fostering closer relations between Israel and the Arab world and between Jews and Arabs in Israel.] The second is delivering lectures, which is what my dad is doing, and then all of the proceeds go to the center and my father doesn’t take a shekel of it. And the third is carrying out economic activity and contributing the profits.

“When Shimon Peres left the presidency [in July 2014,] he wanted to continue his activities. There is a group of people who were with him over the years, and it was impossible to budget this in the framework of the Peres Center for Peace. It’s hard to impose these costs on a non-profit organization.”

But why does he need to pay all these people if he has quit his public position?

“Because he didn’t decide to quit. He decided to continue with full force. He needs a very substantial setting that will support these activities. He creates a lot of activities and you can’t do that with one or two people. Even when he gives lectures and raises donations, there is a group of people who work on this. It’s true that in the United States they pay you for a portion of the lectures, but there is a lot of work entailed in this and that costs money.

“The Tax Authority says that if you did work, you pay taxes and then make a donation, so we set up an economic framework that is capable of carrying out additional activity, the profits from which will go to the Peres Center for Peace.”

Was the business relationship with Bank Hapoalim designed for something beyond the lectures? Was it lobbying? Opening doors?

“When it comes to Bank Hapoalim, there was a technical mistake. They asked for a lecture and maybe another one or two meetings in a more limited forum. A price was agreed upon, along with a monthly payment period. In principle, we don’t deal with lobbying or any domestic Israeli matter. The way in which the relationship [was structured] created the impression that he was going to work for Bank Hapoalim, and maybe lobby Moshe Kahlon [who is expected to be the next finance minister], and that’s rather ridiculous. If you wanted a lobbyist, you wouldn’t hire Peres.”

Bank Hapoalim has issues vis-a-vis government authorities in the U.S., too. Was he supposed to work in connection with them there?

“We don’t work vis-a-vis any government or any authority in Israel or abroad. The business relationship with Bank Hapoalim was with an aim to deliver one major lecture and another two, to advance the interests of the bank vis-a-vis customers there, to hear about Israel. The manner in which the relationship [was structured] was our mistake, and it caused him [Shimon Peres] a lot of mental anguish and that rather hurt him.

“The contract that we signed was signed in good faith. It was a mistake and I take responsibility for it. There was no need to arrange a monthly payment instead of a payment for a lecture, as is done with others. He doesn’t work for them. Since we didn’t know the exact dates of the lectures, we agreed on a price and signed for a monthly payment, and that was a mistake.”

Is Shimon Peres an employee of the company [Peres and Associates]?

“I have complete responsibility for the business. I am the owner of the company and I am chairman. The company doesn’t have a CEO. [Shimon] Peres doesn’t sign contracts. If you invite him to lecture, he provides you a service. In the business relationship with Bank Hapoalim, the service provider was him.”

If he didn’t intend to do lobbying for Bank Hapoalim, and it just involved lectures, why did you rescind the business relationship with the bank?

“We didn’t rescind. He [Shimon Peres] did so because he was so hurt and didn’t want to leave any doubt, so he decided to cut it off in no uncertain terms. It’s very unpleasant, because the bank was counting on him, but he withdrew because publicly it was badly received. Shimon Peres doesn’t take a penny and I don’t take a penny. Instead of giving to his grandchildren, he had decided to make a donation.

“He doesn’t know how to raise funds and ask for money,” Chemi Peres says. “We do it. This money is designated to finance his activities and the center. He is capable of doing a lot more than what the center can handle.”

It appears that his name continues to be used for business activity instead of allowing him to slow down and relax.

“If he had wanted to slow down and sit and write his memoirs, we wouldn’t be carrying out these activities. He believes that its possible to promote matters with multinational companies, to promote Israeli companies. He doesn’t have a government office with a budget. He needs to create a budget himself.”

Does the company that you established have red lines? What matters won’t you deal with?

“The principles are that we don’t work within Israel, vis-a-vis the Israeli government and regulatory [agencies.] We won’t work with gambling companies, won’t work with people who sell arms. We will work with people who sell homeland security. We will work with anything creative and good for Israeli society and that doesn’t hurt the State of Israel. We will work with international companies in an effort to bring them to the Middle East. If we we see a company that has entrepreneurs from various places around the world, we’ll help them.”

How much money does Shimon Peres get for his lectures?

“It very much depends [on the circumstances] and is very variable. Anyone who knows says he needs to charge $250,000 per lecture. That’s what he’s worth. Overseas he charges less than what they are prepared to pay him. When he lectures before Jewish groups, he charges a lot less, even though it involves a lot of effort. He doesn’t take a shekel for his lectures in Israel.”

The company that you founded has expenses, and you’ve rented offices in a nice building in Tel Aviv. What’s left for donations and the activities of the Peres Center?

“The offices that we obtained in Tel Aviv were designed to separate this activity from the Peres Center for Peace. We want total separation between soliciting contributions and activity that is not donations. We don’t get money from the government. [Shimon] Peres himself sits at the Peres Center for Peace.”

What companies do you work with?

“It is not our custom to provide details on our commercial relations. One of the things that we will ask for in the future is for our business relations to remain confidential, not because we are embarrassed.”

Chemi Peres went on to say that the former president doesn’t take a penny from either the Peres Center or Peres and Associates. “He doesn’t ascribe value to money and doesn’t get involved in this.”

Peres is very much connected to [the U.S.-based information technology firm] Cisco [Systems] and has also carried out activities with them. What commercial relationship does he have with them?

“I am not going to relate to questions of that nature. It’s not to the point and not relevant. The company [Peres and Associates] works with global and local companies. Gossips will find reason to do harm with everything. People look for ‘why not’ instead of ‘why yes.’ I come from the business sector and I am used to not disclosing things about business activity if it involves a private company.

[Shimon] Peres is very powerfully connected to [Cisco Chairman and CEO] John Chambers. Cisco does amazing things all over the world. They do a lot of work here. They employ Israeli Arabs and believe that Israel needs to play a role in the high-tech arena in the Middle East.”