U.S. Senator Lobbying to Torpedo Sheshinski

The conservative Republican from Oklahoma wants even larger tax breaks to the partners in the offshore natural gas fields.

A new heavyweight is adding to the already heavy pressure on politicians before tomorrow's vote in the Knesset Finance Committee on raising taxes on oil and natural gas profits.

U.S. Senator James Inhofe of Oklahoma spoke to Finance Minister Yuval Steinitz recently and asked to give even larger tax breaks to the partners in the Tamar and Leviathan offshore natural gas fields.

James Inhofe

Inhofe is a conservative Republican who was elected to the Senate in 1994 after serving eight years in the House of Representatives. He is considered a staunch supporter of Israel as well as oil and gas interests.

Inhofe told Steinitz he respects Israel's right to change its laws and Israel is free to decide on taxes and royalties as is any sovereign nation - but after seeing the Sheshinski recommendations, Inhofe said he wanted ask Steinitz for further breaks for Tamar and Leviathan.

U.S. oil and gas exploration firm Noble Energy is a partner in the two offshore fields, and this is far from the first time the Prime Minister's Office and the treasury have received appeals on the matter from American politicians and officials.

The Sheshinski committee studied the taxation and royalties on Israel's natural resources, and recommended significantly raising taxes on profits from exploiting such resources. The cabinet approved the recommendations, as has the Knesset on first reading.

If the Finance Committee gives the okay tomorrow, the bill will go to the Knesset plenum for its second and third readings.

Inhofe and Steinitz have known each other since Steinitz was the chairman of the Knesset Foreign Affairs and Defense Committee and the head of the joint forum of the Knesset and Congress.

Steinitz strongly objected to the pressure to change the Sheshinski recommendations, including those relating to Tamar and Leviathan. He explained to Inhofe that he had established a committee of professionals to examine the matter and is now implementing their recommendations.

The Finance Minister also told MKs yesterday that he does not intend to make changes to the recommendations, since they are justified and similar to tax plans in other countries, such as the United States

The Likud faction will hold a discussion on the bill today, which Prime Minister Benjamin Netanyahu is expected to attend.