Some years ago, Tel-Hai College, in northern Israel, invited me to moderate a discussion on economic leadership.
- IDB in Turmoil: What Next?
- Bank Leumi Announces It Will Not Forgive Nochi Dankner's Personal Debt
- Eduardo Elsztain Vows Support for Dankner in Surprise News Conference
It wasn’t easy. The discussion was held in a dark auditorium, just before lunch. The students had been awake most of the previous night because of tensions in the area. Still, the panelists managed to get the students engrossed in their explanations of how things really work in this country.
Just before everyone left, a member of the audience suddenly stood, introduced himself as the head of the Upper Galilee Council, and addressed the students: “They talk about economic leadership. I want to tell you about one man, Nochi Dankner....”
He then raised a paean to Nochi Dankner, owner of the IDB conglomerate, and to Dankner's generosity toward the Upper Galilee and northern Israel. Never mind the Finance Ministry, the technology sector - Dankner was the final chord of the panel discussion on economic leadership.
The panelists, who included former Finance Minister Roni Bar-On, had reservations about the council head’s interruption, to put it mildly.
“Dankner’s donations come from the public companies he owns…but the students won’t realize that," one of them said. "They’ll think he’s some great philanthropist giving his own money."
Dankner isn't the only businessman to donate money from the companies he owns, but he's gone pretty far in his demands for honor and for political and business connections in return. In his trips north and south he traveled by convoy as if he were the prime minister. At events arranged by companies, including those in the IDB group, company officials were asked to honor and thank Dankner in their speeches as if he were the dictator of North Korea. Modesty doesn’t appear to be Dankner’s strong suit.
Yet an analysis of his charitable works shows them to be part of a well-planned series of carrots and sticks.
For example, the donations to the north and to local authorities opened doors for Dankner, and turned mayors into his debtors; now they're mobilizing to help him keep control over IDB (which he bought 10 years ago and stands to lose if the stiffed bondholders taking up arms against him have their way).
For the greater glory of Dankner
Dankner also donated millions of shekels to nonprofit organizations connected with prominent Haredi kabbalists from the south, such as Rabbi Yaakov Ifergan, a.k.a. the “X-ray,” and Rabbi Yoshiyahu Pinto. Even though the donations came from a public company and public funds, nobody knows exactly how that money was used. What is known is that over the past few months, Rabbi Pinto has been busy helping Dankner try to overcome his financial travails: Pinto works for him as a consultant and mediator in every way. He is the one who brought Dankner the Argentinian businessman Eduardo Elsztain as an investor.
Even if the donations do not produce direct and immediate business results, they have indirect returns.
For example, in 2009, Dankner received the title “An Exemplary Figure in the Jewish World” from the World Federation of Moroccan Jewry, after Koor Industries, a public company that he controls, donated NIS 600,000 to it. In 2011, Dankner won the World Jewish Congress Herzl Award for his work in developing the Negev and the Galilee — in other words, donations again.
None of these donations is made anonymously. Every time an award or prize like this is handed out, Dankner’s well-oiled PR machine, headed by Rani Rahav, makes sure to draw as much publicity to it as possible.
Given that Dankner has been donating the public's money and seeing where he has chosen to put it, we could say the donations were actually investments.
The donations did not come from Dankner’s own pocket. IDB’s structure ensures that the money is donated by the companies along the slopes of the pyramid, which he controls through a tiny portion of the shares.
The money went to people with power. The recipients of the donations provided a return on the investment, in words and in actions, when Dankner needed them.
Many donate anonymously, without seeking anything in return. But some businesspeople have made charitable giving into a tool for business promotion or self-aggrandizement.
Take the Ofer family’s plan to make a large donation to the Tel Aviv Museum of Art so that it would bear the family name. That's not a donation: It's buying a personal monument, like the pharaohs who built the pyramids in Egypt. Sometimes donations are a business action in every way, a tool for accumulating influence, connections, people who owe you favors and people who fear you. It’s just like buying a newspaper, hiring a lobbyist and consultants, and influencing the media by giving or withholding budgets for advertising.