Israel's Supreme Court Upholds ex-Bank Hapoalim Chairman's Fraud Conviction

Danny Dankner had been jailed for fraud and breach of trust in his capacity as chairman of the bank, but is now awaiting an additional two years in prison.

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Danny Dankner (center) with his attorneys in court yesterday.
Danny Dankner (center) with his attorneys in court yesterday.Credit: Ofer Vaknin

The Supreme Court’s upholding Tuesday of the conviction of former Bank Hapoalim chairman Danny Dankner will send him back to prison, after he just left Hermon prison in April on another criminal conviction after the parole board cut a third of his sentence for good behavior.

Dankner had been jailed for fraud and breach of trust in his capacity as chairman of the bank, but based on the Supreme Court’s decision Tuesday, he is now awaiting an additional two years in prison, a sidelight to the Holyland case, in which former Prime Minister Ehud Olmert and other prominent figures were charged with corruption that centered on the development of the massive Holyland real estate project in Jerusalem.

The Supreme Court decision in Dankner’s case was on an appeal of a May 2014 verdict by Tel Aviv District Court Judge David Rozen, who convicted him of giving 1.3 million shekels ($335,000) in bribes to change the zoning of land belonging to Israel Salt Industries, which Dankner headed. The land was collateral for an attempt to acquire a controlling interest in Bank Hapoalim by an investor group.

Rozen found that Dankner had paid the money to an intermediary, Meir Rabin. Rabin’s uncle, Ya’akov Efrati, was head of the Israel Land Administration at the time, and the judge ruled that the money was paid to Rabin in an effort to influence Efrati and the ILA’s decisions on the disposition of land. He was sentenced to three years in prison and two years’ probation along with a 500,000-shekel fine and the forfeiture of a million shekels worth of land. He appealed to the Supreme Court, where he initially appeared in prison uniform while still an inmate at Hermon.

The question before the Supreme Court was whether the payment on Dankner’s instructions of 1.3 million shekels to Rabin, who has been characterized as a macher, Yiddish for a person of influence, constitutes a bribe geared to have Rabin influence his uncle, Efrati, to make decisions that would benefit Dankner’s business interests. A majority of the Supreme Court justices affirmed the district court’s decision, letting stand convictions on three counts of brokering bribes, money laundering and fraud. However, the court did agree to reduce his original jail sentence of three years to two.

Justice Yitzhak Amit noted that he could not equate dealings with a macher and bribery as a sweeping general rule, but if a macher receives payment to cause decision makers to include extraneous considerations in their decision making, it becomes a bribe. In a dissent, Justice Neal Hendel said it is only if the money is paid to bring about an illegal decision or one in violation of the rules that it can be viewed as a bribe.

The court’s decision also raises questions, however, over how Dankner was found fit to serve as chairman of Bank Hapoalim. It was long before he was appointed to head the bank’s board that he approved the payment of a huge sum from Israel Salt Industries without board approval, without informing relevant people at the company, and while concealing his actions.

And when it comes to the ILA’s Efrati himself, it was his great fortune to be acquitted in the district court by Rozen, a verdict that the state chose not to appeal. As Justice Vogelman noted, Efrati approached the attorney general at the time to expedite Israel Salt Industries’ interests two days after his nephew, Meir Rabin, received money from Dankner.

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