Gantz Firm Sought to Sell Tech to Israeli Army, Mossad

In the end, Fifth Dimension won only one contract, from the Israel Police, during its four years in business

Retired Israeli general Benny Gantz, one of the leaders of the Blue and White political alliance, looks on during a campaign event in the Israeli southern city of Ashkelon on April 3, 2019.
AFP

Fifth Dimension, the homeland security technology company once chaired by Kahol Lavan leader Benny Gantz, tried and failed to sells its products to a string of Israeli and foreign government agencies and private sector businesses before it shut down.

In the end, the only sale the company made in four years as a business was a controversial 4 million shekel ($1.1 million) contract with the Israel Police for a pilot project that proved unsuccessful.

Last week, Israel’s State Comptroller, Joseph Shapira, said the police contract violated regulations because it was awarded without competitive bidding and because Fifth Dimension provided false information to the police about its experience and capabilities.

In an election campaign in which corruption has emerged as a key issue, as Prime Minister Benjamin Netanyahu fights off multiple criminal investigations, Gantz’s stint as Fifth Dimension’s chairman has handed ammunition to Netanyahu’s Likud.

New information obtained by TheMarker raises further questions over two of the potential customers Fifth Dimension approached. One was the Israeli army, where Gantz had capped a long career as chief of staff before retiring in 2015. The other was the Mossad espionage agency, where Fifth Dimension’s president, Ram Ben-Barak, was deputy chief.

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The two responded that they had had no direct dealings with either the army or the Mossad when the company approached them.

“There were professional contacts with officials in the defense establishment, but Gantz and Ben-Barak were not at the forefront of these activities,” the two said in a statement. “All of the company’s activities conformed with norms and with the law – something that was reinforced in the state comptroller’s report, which found no fault in Gantz’s and Ben-Barak’s actions at Fifth Dimension.”

TheMarker’s information regarding the company’s potential customers comes from a copy that it obtained of a presentation that Fifth Dimension provided investors in the fourth quarter of 2017, about a year before the company finally shut down. The presentation summarized the customers it was approaching and at what stage the contacts stood.

It said the company was in advanced negotiations with the Mossad and the Shin Bet security agency as well as Israeli companies Bank Hapoalim, Cellcom Israel, the mobile service provider, and online game maker Playtika.

It is unclear what Fifth Dimension, which had been developing artificial intelligence systems for homeland security applications, was offering to sell the private sector businesses. None of the company’s involved responded to queries by TheMarker.

The presentation listed four potential clients with which Fifth Dimension was in touch – Israel’s Justice Ministry and tax authority as well as the Cyprus Police and Dow AgroSciences, a unit of Dow Chemical.

Fifth Dimension had had initial contacts with the Israeli army, the New York Police Department, the Kenyan police and the German company T-Mobile, the presentation showed.

Fifth Dimension was formed in 2014, employed 100 people at its peak and raised more than $50 million. It went out of business at the end of last year. Sources close to the company said it encountered at least three critical problems along the way.

One was the company’s core technology, which brought together disparate security-related information from cameras, cellular communications, toll roads and border crossings into a single package that could be easily analyzed and acted upon by users. That raised privacy concerns that the company was not able to resolve. Then there was its key backer, the Russian oligarch Viktor Vekselberg, who failed to invest all the capital he had committed to the company.

Vekselberg’s role in the firm as a shareholder made it impossible to recruit other investors after he was subject to U.S. sanctions a year ago as punishment for Moscow’s suspected meddling in the 2016 U.S. presidential election and other alleged Russian “malign activity.”

But the sources said Fifth Dimension’s biggest mistake was making a strategic decision to turn away from the private sector and focus on government contracts. That not only put it into head-to-head competition with industry giants such as Palantir Technologies and IBM, but involved long and protracted negotiations to win contracts – because governments move more slowly. The result was that Fifth Dimension wasn’t generating revenues.

In the end, said one source who asked not to be identified, the company never succeeded in its goal of creating product that would give law enforcement agencies the kind of evidence that would stand up in court.