Yellow Jackets Leave Lobbyists Red-faced

Barred from Knesset and tarred by its colleagues, the company is in damage-control mode.

If your car breaks down by the roadside, under Israeli law you have to wear a fluorescent yellow vest. Every driver in Israel must under law have that shining, chartreuse vest in the car.

Why? To be visible to drivers as they barrel down the highway, surely.

Lobbyists - Olivier Fitoussi - February 2012
Olivier Fitoussi

Try again. Why? Because 3M, a client of Gilad Government Relations & Lobbying was stuck with a ton of fluorescent yellow gook.

The sponsor of the yellow-vest law was Gilad Erdan, today Israel's environmental protection minister but seven years ago, when the law went through, he was chairman of the Knesset Road Safety Committee.

"The Fluorescent Vest Law is one of our great achievements," boasted the leaders of Gilad Government Relations & Lobbying during a meeting with a prospective client, a large company seeking somebody to push its interests in the Knesset.

Last week, the Channel 2 investigative journalism show Uvda ("Fact" ) ran a segment on Gilad, showing candid camera footage from lectures to would-be lobbyists. Right there on tape, Gilad people describe how they pushed the Fluorescent Vest Law. Thus that "great achievement" went and blew up in their faces, on prime-time television.

In an interview with Uvda, hosted by Ilana Dayan, Erdan denied having received a draft legislative bill from an external party, that he merely signed. "That is, categorically, a lie," he said.

Be that as it may, the Uvda expose took the heads of Gilad, one of the biggest lobbying companies in Israel, by shock. The comments by its teachers caught on tape caused an uproar in the Knesset. Knesset Speaker Reuven Rivlin promptly slapped restrictions on lobbyists' access to the Knesset in general (for instance, they can no longer sit in the lawmakers' cafeteria ) and barred Gilad lobbyists from the Knesset, period.

On its website, Gilad boasts of having 107 clients. Industry insiders believe the company turns over millions of shekels a year. After Rivlin's ban, it hired attorney Dori Klagsbald to represent it vis-a-vis the Knesset.

The heads of Gilad are upset not only because all the company's people have been barred from the Knesset, but because of the potential loss of income. Its clients have been saying, in conversation with various people, that they're wondering if they shouldn't jump ship to a different lobbying firm.

"On the one hand we've been working with the company for a long time," one told TheMarker. "On the other, as things are, it would probably be difficult to advance our cause in the Knesset through Gilad." There you have it. Other customers, though, are professing loyalty to the company and say they'll weather the storm with it.

With friends like these

Rivlin wasn't the only Knesset member outraged at the taped remarks. Ronit Tirosh of Kadima was infuriated at the claim, caught on the Uvda candid camera, that Gilad lobbyists used her to promote a cervical cancer drug made by the drug company MSD. Tirosh was not satisfied with the contrite letter of apology Gilad sent to all the Knesset members after being caught, which said among other things, "Unfortunately, some of the company's workers tripped over their tongues and said things in a manner that does not comply with the company's values. Moreover, we are confident that these things do not reflect the day-to-day reality that lobbyists at Gilad experience, without exception, throughout 15 years of activity in the Knesset, during which time we have been proud to work alongside you, the active, involved and diligent Knesset members who do sacred work for the public in Israel."

Tirosh sat down and wrote a letter herself. "The admission that the company has influence over elements at the ministries and in Knesset turns my stomach," she wrote, adding that it did nothing for her motivation to continue working with them.

On Wednesday, a number of lobbyists fielded phone calls from Gilad. The lobbying firm wanted to rally its colleagues and arrange a meeting at which they would agree on binding criteria for their business. At least some of the lobbyists fielding the calls were just as outraged as the embarrassed parliamentarians.

"It isn't bad enough that the entire industry of lobbying was stained by things the Gilad lobbyists said on tape," one hissed. "Now we have to go to their offices to set rules?"

That same day a number of them sent a letter to Rivlin, expressing their "revulsion" at their begrimed colleague Gilad. "Our profession was presented with arrogance and cynicism," they wrote. "If one lobbyists firm erred, that doesn't mean all lobbyists should be shot down."

Over at Gilad, they couldn't just sit back and fiddle as their industry burned down. Company chairman Ariel Sender hastened to the Knesset on Wednesday. He and a few of his employees were the only lobbyists in parliament that day, because it was Tu Bishvat (Jewish Arbor Day ). The Knesset was not holding any sessions or committee meetings that day, other than meetings concerning the Knesset's own anniversary.

Forget damage control. The fact that the Giladites showed up means they completely failed to realize just how serious the expose was, said sources in the Knesset. David Rotem of Yisrael Beiteinu, chairman of the Knesset Constitution, Law and Justice committee, said he ran into Sender in the cafeteria. "Now we see who our true friends are," Sender told him, according to Rotem. He answered: "You weren't a friend before and you aren't one now, and you won't be allowed into my office in the future."

Ariel Sender and the company's founder and CEO, Amir Gilad, are the ones responsible for the company's spirit, say insiders who know how the company operates. Gilad Government Relations & Lobbying was founded in 1997 by Amir and Gilat Gilad. Amir Gilad had previously served as aide to the chairman of the Knesset Finance Committee, MK Gedalya Gal of Labor. Later he worked for the Union of Local Authorities in Israel. Gilat Gilad had worked, many years ago, at the office of the Finance Ministry spokesman Eli Yosef, who was to become a lobbyist at the lobbying firm Policy.

"Gilad brought a new vision to the lobbying industry in Israel," the company says on its website. That new vision is for the lobbying companies to hold themselves to the "highest standards of quality, reliability and service."

Amir Gilad has an irrevocable permit to enter the Knesset premises. He hasn't used it in recent years. He apparently prefers to pull the strings from afar. The one making the rounds in parliament is Sender.

Sender, 39, had briefly served as acting director-general of the Tourism Ministry in 2001, under Benny Alon. In November 2001, the civil service commission's vetting committee ruled out permanently appointing him as the ministry's director-general, on the grounds that he wasn't ready for the job.

"The candidate is talented and dynamic, but he does not have the requisite experience and has not reached the level of maturity required to fulfill the job as director-general," the committee wrote.

Rescuing Channel 10

That said, he had spent time as a parliamentary aide and forged ties with several Knesset members on the right side of the political map. He also served as director-general of the National Union party, which joined forces with Yisrael Beiteinu, and sits on the Elkana local council. At Gilad, Sender has acted in recent years to garner support from Yisrael Beiteinu, the National Union party and the National Religious Party for his various customers.

In recent months Sender had been making the Knesset rounds to prevent Channel 10's collapse. Thanks to his contacts, Sender reached all the way to Prime Minister Benjamin Netanyahu, who isn't known to be a Channel 10 fan following its inquiry into his and his wife Sara's travel expenses.

A month ago Channel 10 was saved at the last second: Its franchise was extended even though it hadn't paid its debts to the state.

While working on the Channel 10 issue, Sender spoke with the chairman of the Economics Committee, Knesset member Carmel Shama-Hacohen. Asked about this yesterday, Shama-Hacohen said he had met with lobbyists several times regarding Channel 10, but said they hadn't pressed him. In any case, Shama-Hacohen pointed out, he had declared from day one that Channel 10 would not be closing, and any pressure on the Knesset members hadn't come from lobbyists but from the channel's own heads, he said.

The law to save Channel 10 isn't the only one the Giladites helped push through the Knesset Economics Committee. In mid-2011 Gilad representatives took huge pride in the so-called "Isracard law", to open the credit cards industry to competition.

Companies competing with Isracard, CAL and Leumi Card badly wanted it to pass, as it would weaken Isracard's power - it had already been declared a monopoly in clearing credit-card transactions, and didn't let other credit card companies clear transactions made with its cards.

Thus lobbyists for the two sides squared off: people representing Isracard on the one hand, and people including Gilad representing the rival credit card companies.

A private bill sponsored by MK Danny Danon (Likud ) impelled the Finance Ministry to put forward a bill of its own. Gilad representatives claimed they had pressed Danon to sponsor the law.

Danon said this week that he doesn't remember who gave him the draft law that he wound up sponsoring, but he clearly remembers that the CAL credit card company and lobbyists had been heavily involved. Both his and the Finance Ministry's bills were enacted into law.

Now Sender and Amir Gilad are in damage-control mode, though the damage caused by the Uvda expose was profound, and will take much time to heal. The main difference between Gilad and other lobbying firms, admits an industry insider, is that they were caught on tape boasting at the expense of Knesset members.

As for the issue of the fluorescent vests, Gilad commented that the remarks by its employee Tzach Borovich caught on tape "did not represent the company's reality or spirit," adding that it takes them "very seriously." The company added that Borovich had started working for the company only after the fluorescent-vests law had been enacted, so he hadn't been involved at all.

"The way Tzach presented things was wrong, even distorted. Gilad is proud to have played an active role in such a substantial subject, whose immediate result is to prevent injury on the side of the road and save lives each and every day," the company said.

Obviously, the errant employee's remarks hadn't been coordinated with any of its lobbyists who had been involved, the company said.