What $10 Billion Can Do for One’s Ego

‘In a few minutes we will be landing at Yitzhak Tsuah Airport’; thoughts on the 10-year anniversary of natural gas monopoly; Israel in 2025.

Off Haifa coast, oil rig at enormous Leviathan natural gas field.
Albatross

It’s the year 2025. The flight passed with almost no trouble, except for a few minutes of turbulence. The Gulfstream 9000, one of the newest jets in the fleet of private lanes of Moble Energy, is an amazing machine technically – and very comfortable too – and along with the personal service of two stewardesses for the executive, along with the two aides, this has its effect.

Mark Smith, the CFO of Moble Energy, loves to visit Israel. The profitability of his projects here is so many times higher than any other project in the world, the way he is treated varies between admiration and brown-nosing; and government officials, those from the Antitrust Authority and the Tax Authority, are always happy to cooperate. You don’t even have to bribe them like you do in Africa, Russia and so many other places, here they are so happy to help. And of course there’s Tel Aviv, the city that allows those who can afford it to fulfill any desire, at any time of the day.

The former Ben Gurion airport

“In a few minutes we will be landing at Yitzhak Tsuah International Airport,” the pilot announces. Smith smiles. He has worked for Moble for almost a decade, and still remembers when Israel’s main airport was named after David Ben-Gurion, and how a modest donation of a few hundred million shekels – recognized as a business expense by the taxman, of course – convinced the board of the Israel Airports Authority to change the name. That’s how it works when you have billions of dollars: There is nothing you can’t buy, and certainly not in a small country like Israel, with an economy that is a fifth the size of that of Texas, which is where Smith comes from. These days, after the natural gas from the “Big Mammal” offshore field started flowing at full production to the liquefaction plants in Egypt, Cyprus and Ramat Aviv, Smith’s wallet, and the budget for “building a brand” at his disposal, were that much bigger than ever.

The travel plans matched that too. This evening Smith already has scheduled a meeting in the Prime Minister’s Residence, along with Tsuah and his wife. Nothing special: A regular keeping-up-to-date conversation, the same as every month, for dealing with the problems that always pop up. You just have make to sure not to anger the missus. Later in the evening a cocktail party is planned with the ambassadors of Egypt, Cyprus and Turkey, mostly to help strengthen the personal relationships. These are people who know how to have a good time.

Tomorrow morning will be the most enjoyable part of the trip. Only smiles are waiting: Opening the emergency room named after Tsuah in the hospital in Tel Aviv, then the ceremony awarding scholarships to the children of the officials in the Tax Authority and Finance Ministry – donated by the partners in the gas venture, Hatio – and then followed by a board meeting of the Moble-Israel Gas Fund, and then the inauguration of the university chair for energy independence and environmental research at the university named after Tsuah and Moble.

Last year, Smith opened a center at a different university, but in that case there was no need to invest very much: It was only the rebranding of a real estate studies institute named after Eliezer Fishman, someone who was once a real estate tycoon and went bankrupt. A bit boring, but Smith never suffered from these public roles. Somehow, dividing up the money with someone else and the ease which with this money always solved problems impressed him. When he was young, he read Ayn Rand’s books and was impressed by them, so such events always reinforced his worldview concerning the ways to effectively motivate people.

But after lunch the hard part of the trip starts: The meeting to approve the purchase of the largest newspaper and Internet site in Israel, a deal which Tsuah signed at the beginning of the week. Smith knew, back from his days as a young CPA in the financial department, that Tsuah loves the media. The old-timers told him how that after the gas protests in the summer of 2015, Tsuah announced – shouting – that they would never again catch him without his own media outlets, and immediately bought a financial newspaper and completed his takeover of the country’s largest television station.

There was a time, the old-timers told Smith, when Tsuah and the tycoons like him made do with hiring former senior officials from the various government ministries, with generous offers to politicians to run philanthropic foundations, and with hiring journalists and giving money to newspapers to arrange positive coverage, or at least silence. But Tsuah got sick of these defensive tactics and moved to an attack strategy, and now in addition to a business paper and a television channel, he also bought the most widely read newspaper in the country. He could do that since he succeeded in changing the law banning cross-holdings in television and newspapers.

True, it really wasn’t all that hard to do. All the members of the appropriate Knesset committee received the maximum contributions allowed by law from the jointly owned gas monopoly. Since there are primaries in another three months – Smith did not understand how it is possible to run a country that goes to the polls every year and a half – there was not a single Knesset member who refused the campaign contribution. There was one MK from some social welfare party who did not want the public to know about the donation, but after they arranged a job for his daughter in the philanthropic division of Zelig Drilling, even his objections melted away.

Politicians can be bought cheaply

It is amazing how cheap it is to buy politicians in Israel, pennies compare to what a congressman costs in the United States. All the Israeli politicians want is a quiet understanding. They want a bit of room to shout the populist sentiments necessary to get reelected, and it doesn’t matter whether they are from the right or left wings. But when the time comes to raise their hands and vote in the parliament or the cabinet, they always vote with us, he thought. Smith understood them.

None of the journalists, government officials or politicians understand anything about their business. Today it’s gas, tomorrow it’s the budget, next week taxes, how can they understand? They don’t even realize that every time they make noise, when some regulator remembers that the playing field isn’t level and wants to open up agreements, the result is that we twist everyone around our finger and in the end improve our conditions and profitability. This is the great thing about Israel: There’s a lot of noise, but in the end our expenses are low and the profits are high.

One of Smith’s most important jobs as CFO is to pull all sorts of accounting tricks to lower the profit margins in the company’s financial reports – in order not to attract the attention of rival energy firms. Tomorrow’s meeting will be rough, returning to his original train of thought, while watching the Israeli coastline slip by out the plane’s window and seeing the chimneys of the refineries and natural gas liquefaction plants. The CEO, who doesn’t speak to just anyone, asked him to make it clear to Mr. Tsuah that he is starting to be a bit much, and from the company’s experience in Africa and South America, they know that sometimes the moment comes when the public is no longer willing to accept almost any crazy whim. Even if you are the richest person in the country.

Even Silvio Berlusconi, 15 years ago after he bought the newspapers, the members of parliament and a few large corporations, fell in the end, thinks Smith. He did not fall because of the Bunga Bunga, that was only a tabloid headline that actually made him more of a real man in the eyes of the Italians. Tsuah is not into Bunga Bunga issues – at least as far as I know – and he is also not cool like Berlusconi, but his appetite for power and control of the press and politicians is still worrying.

He remembers one of the conversations he had with his mentor, the previous CEO of Moble Energy: We love to put the public to sleep and control the politicians behind the scenes, and in particular quietly. Everyone can be bought, you just don’t need to show it, and certainly not publically, he used to say. And Tsuah, Smith thinks, biting his lips slightly, does everything backwards. He chatters on at every opportunity and on every possible occasion about crazy national projects, such as bringing gas from asteroids using the Arrow missile and technology from the Smart App Nation. He even promised Shimon Peres that he would bring gas from space. He “did not rule out” the possibility of a political career, and the most worrying thing is that suddenly even a word from the CEO of Moble Energy does not always put him back in line.

It is amazing how having $10 billion in the bank can make a person’s ego grow, Smith thought to himself, as the plane started in for its landing. It’s amazing how he has already forgotten that he is where he is only because of us. How he has forgotten that without all our threats to leave the region, without our people in the American government and without the threats to go to court, this Tsuah – a small contractor from some time that no one in Houston even remembers its name – would have gone bankrupt years ago. He had debts and promises to the banks and institutional investors; he was someone who had already given investors haircuts a number of times in his real estate businesses, and they nonetheless continued to give him money. These Israelis are strange, thought Smith.

The “Fasten Seat Belts” sign over Smith’s head goes on, but the stewardesses don’t come to tell him to put up his seat. After all this is a private plane, in a few minutes he’ll be on the ground and two minutes later sitting in the black Mercedes on the way to the Prime Minister’s Office in Jerusalem. After all, even if the Israeli partner goes a bit crazy and upsets the locals, it is even better to be an energy tycoon for an American gas and oil company. And it is even better to be a tycoon against a small country that knows nothing about the industry, does not know how to differentiate between a threat and a bluff during negotiations; where the politicians and civil servants are weak and ready to sell themselves on the cheap, and surrender under moderate pressure.

And the strangest thing is, Smith thought exactly as the wheels touched the runway, is that they said these Jews were smart, courageous, quick and competitive. Maybe it was true once upon a time, but it’s over now. After all, its inconceivable that they are so smart if they still think they live in a democracy.