Top U.S. Jewish Leader Has Little-known Side Job as Director of Israeli Gas Giant Behind $15b Egypt Deal

Days after Delek Drilling announced the Egypt deal, the Presidents Conference – lead by Malcolm Hoenlein at the time – hosted a panel promoting gas extraction as a route to Mideast peace

Malcolm Hoenlein, former chief of the Presidents Conference of Major American Jewish Organizations, in 2010.
צילום אורי פורת

Less than two weeks before the Israeli energy giant Delek Drilling announced a $15 billion deal to pump natural gas to Egypt, one of its board members, Malcolm Hoenlein, told a newspaper that the United States should be “standing up for” Egypt’s president, Abdel Fattah el-Sisi, despite his troubling human rights record.

To really understand Israel and the Middle East - subscribe to Haaretz

“You can criticize and you can push for human rights and do all those things,” Hoenlein said. “At the same time you’ve got to recognize the realities that these countries face.”

Hoenlein did not speak to the newspaper as a Delek Drilling board member. Instead, he spoke in his more familiar role: as the prominent leader of one of the American Jewish community’s most powerful foreign and domestic policy advocacy groups. As the head of the not-for-profit Conference of Presidents of Major American Jewish Organizations, Hoenlein has represented American Jews in meetings with the top levels of Israeli, Arab and U.S. political leadership for decades.

In those high-level meetings, Hoenlein speaks for more than 50 Jewish groups and their millions of members on matters of foreign policy. His board seat at Delek Drilling, which he has held since June 2017, appears to have been known to only the top lay leader at the Presidents Conference. In recent months, as he and the organization have advocated on issues that relate to Delek Drilling’s interests, there has been no disclosure of Hoenlein’s gas company ties.

Just a few days after Delek Drilling announced the $15 billion Egypt deal, the Presidents Conference hosted a panel for its members that promoted natural gas extraction as a route to Middle East peace. One of the panelists was an executive at Noble Energy, Delek Drilling’s business partner in the Egypt deal. No one mentioned Hoenlein’s connection to the company.

Hoenlein’s relationship with Delek Drilling does not fall within the narrow definitions of a conflict of interest that would offend charity regulators in New York State, where the Presidents Conference is registered. But the revelations about his role at the firm could raise questions among American Jewish officials about whose interests Hoenlein is pursuing at the Presidents Conference: the Jewish community’s, or his own?

Malcolm Hoenlein with Israeli President Reuven Rivlin at the opening event for the Conference of Presidents, 2018.
Government Press Office

The lack of transparency around Hoenlein’s outside work also highlights the unusually weak governance at the Conference of Presidents, which, despite its unparalleled access and unusual power, has a loose approach to oversight relative to other Jewish organizations.

Hoenlein’s Delek board membership “should be easily knowable inside and outside the organization,” said Rob Reich, a political science professor at Stanford University and an expert on philanthropy. “People on the outside, the public, deserve to know about this potentially tension-ridden set of roles as well.”

Members of the Presidents Conference include the largest and most powerful groups in American Jewish public life, including the Union for Reform Judaism, with more than 2 million constituents, and the Jewish Federations of North America, which represents local institutions in each Jewish community in the country.

Hoenlein did not respond to a list of written questions. Delek Drilling declined to comment. Stephen Greenberg, chairman of the Presidents Conference, said that Hoenlein’s role at Delek Drilling did not conflict with his job at the organization.

“It’s something I felt was good for the Conference,” said Greenberg, who approved Hoenlein’s request last June to join the Delek Drilling board. “I was happy for the Conference that Malcolm was asked to do that. There was absolutely no conflict between him sitting on that board and anything involved in the Conference.”

Leviathan

Just off the coast of Haifa, 3 miles beneath the surface of the Mediterranean Sea, lies a natural gas field named Leviathan, named for the biblical sea monster, with a reservoir so massive it could fuel the entire European Union for a year and a half.

Prime Minister Benjamin Netanyahu and his allies argue that the gas field, and others like it, could unlock peace and prosperity for Israel. Delek Drilling, part of a conglomerate owned by the Israeli mogul Yitzhak Tshuva, is a major piece of that dream. Netanyahu has fought hard to support the project, leading Israel’s antitrust commissioner to resign in 2016, after Netanyahu interfered to stop him from breaking up the partnership between Delek Drilling and Noble Energy.

After years of legal wrangling, hopes had begun to fade for the Leviathan project. Regional tensions had made deals with some potential buyers of Leviathan’s gas, specifically Turkey, seem vanishingly unlikely. So when Delek and Noble finally signed their deal with an Egyptian firm in February, Netanyahu greeted it as a major victory.

“This is a joyous day,” the prime minister said.

The deal was the beginning of the realization of a vision of Israel’s future in which peace and economic prosperity are achieved through natural gas and strong business ties to certain Arab neighbors. Outside of the Israeli government, perhaps no one has worked harder to achieve that vision than Malcolm Hoenlein.

King of the Jews

As a generation of powerful Jewish communal leaders fades into retirement, Hoenlein, 74, is perhaps the last “king of the Jews,” the kidding-but-not-kidding title bestowed on only the biggest communal operators.

But Hoenlein’s perch at the Presidents Conference is unusual even among his peers at the apex of the Jewish communal world, for both the extent its power and the opacity of his dominion. Hoenlein enjoys almost unequaled access both to Israeli and U.S. officials. He also works under far less oversight than his Jewish communal peers.

Born in Pennsylvania, Hoenlein is an Orthodox Jew, a rarity among top leaders of mainstream Jewish institutions. He lives in Flatbush, Brooklyn, and is a major public figure in the Orthodox community. He became the executive vice chairman of the Presidents Conference in 1986, after leading a number of smaller Jewish groups.

Hoenlein is known for his close ties to Netanyahu and is seen in countries like Turkey, Jordan and the United Arab Emirates as a backchannel to Israeli political leaders. He is on the short list of Jewish leaders whom White House officials consult before announcing major decisions on policies that affect Jewish interests.

Still, Hoenlein has no large staff of professionals, nor a well-organized board of directors. No more than a dozen people work for the Presidents Conference, compared to nearly 400 at the Anti-Defamation League. The work of the Presidents Conference is controlled by Hoenlein, the elected chairman and a small group of unelected former chairmen. An executive committee, created in the past three years after complaints from liberal members of the Presidents Conference, appears to remain out of the loop.

For example, when Hoenlein announced last month that the organization would search for a replacement while he remained on staff, the executive committee learned the news only through a memo that was circulated to the entire membership. One former chairman of the Presidents Conference, however, told the Forward he had been consulted beforehand.

Few leaders of groups that are members of the Presidents Conference were willing to discuss Hoenlein’s role at Delek Drilling. The Forward asked 11 of those leaders if they knew of Hoenlein’s role; of those who responded, none said they had known. Last year, the organization adopted a “public discourse” policy that bars members from making a broadly defined range of public critiques of the Presidents Conference or its leaders, on pain of public sanction or even expulsion from the organization.

Helping Sisi

Since the coup that brought Sisi to power in Egypt in 2013, Hoenlein has put the heft of his influence behind efforts to strengthen the military regime there. He has brought two large delegations of American Jewish leaders to Cairo, has met with Sisi at least once in the United States, and has advocated for Egyptian interests in Washington as part of a broader Israeli effort to prove its value as an ally to leaders in Egypt.

“Malcolm has been supportive of Egypt since the coup,” said Andrew Miller, who served on the National Security Council during Barack Obama’s presidency as the director of Egypt and Israel military issues, and now is deputy director of policy at The Project on Middle East Democracy. “The Israeli government places a high priority on its relationship with Egypt, and they’re very effective in mobilizing the American Jewish community to reinforce their outreach.”

Hoenlein’s support for the Sisi government has continued since he joined Delek’s board in June 2017, even as the regime’s crackdown on dissidents and political opponents has increased. Hoenlein’s comments in early February, made in an interview with The Times of Israel, suggested that the United States should ignore the Sisi regime’s alleged human rights violations and continue to build ties to the country.

Greenberg said that Hoenlein’s comments to The Times of Israel were not related to natural gas. “What Malcolm was talking about had nothing to do with oil,” he said. “It had everything to do with [making] sure that Sisi remains strong.”

The Delek Drilling deal with Egypt came months after Sisi’s decision last August to lift a ban on private Egyptian firms importing gas to the country. After the deal was announced, Sisi praised it, saying his country had “scored a goal.”

According to a person familiar with the matter, who asked not to be named because they were not authorized to speak publicly, Hoenlein had no personal involvement in negotiating Delek and Noble’s deal with the Egyptian firm, called Dolphinus Holdings.

Pumping Gas

Hoenlein has also been a consistent advocate for oil and gas drilling in the United States and Israel. In 2013, he joined the board of an advocacy group made up of energy executives who pitched hydro-fracking and natural gas exploration as a means of decreasing reliance on Arab oil. Some members of the Presidents Conference criticized the effort publicly the time. Hoenlein remains on the board of the group, called the Council for a Secure America, according to its website.

The panel discussion at the Presidents Conference’s annual “mission” to Israel in February, titled “Oil and Water: The Key Ingredients for Peace in the Middle East,” struck some attendees as being of questionable relevance to the business of the Presidents Conference. The presence of a Noble Energy executive on the panel did not raise eyebrows. But almost no one in the room knew that Hoenlein was on the board of Noble’s partner in a freshly inked $15 billion deal.

Greenberg said that an Israeli consultant, and neither he nor Hoenlein, designed the “Oil and Water” panel. “It was a fabulous panel,” he said.

Eastern Mediterranean Alliance

Last June, a week before Hoenlein joined Delek Drilling’s board, the Presidents Conference put out a rare statement celebrating a meeting between Israel, Greece and Cyprus.

The June meeting, the third of its kind, was part of an effort Hoenlein has backed for years to build an alliance of shared interests in the Eastern Mediterranean that could provide an alternative power center to the Arab Middle East. Chief among those shared interests? Natural gas.

Hoenlein has referred to this alliance as a “Mediterranean alternative.” In a 2016 interview with The Times of Israel, he said that he had advocated for it around the world. “When we were in Spain we raised it. We raised it in Italy. We raised it in Morocco. We raised it in Malta. People were responsive to it,” he said.

Close Israeli ties to Greece and Cyprus are key to the future of the Leviathan gas field. Selling the gas to Turkey, one major potential market, would require a pipeline through Cypriot waters. A theoretical pipeline through Cyprus and Greece could bring the gas directly to the European market.

Hoenlein has attended annual missions with nongovernmental groups from Greece and Cyprus that parallel with the official meetings among Greek, Cypriot and Israeli leaders. The most recent took place in January.

The question of regional alliances and gas sales has clearly been on Hoenlein’s mind. In his only public comment in which he’s been identified as a board member of Delek Drilling, Hoenlein told Bloomberg in January that Turkey was still a potential buyer for Leviathan’s gas, but the country’s president, Recep Tayyip Erdogan, had “complicated progress.”

Not Bureaucratic

Hoenlein’s deep corporate ties are unusual for an American Jewish leader. While corporations at times seek out nonprofit leaders to serve as board members, it’s almost unheard of in the Jewish world. Only two other leaders of major Jewish organizations serve on corporate boards. Neither of them serves on more than one. (One of them, the Jewish Federations of North America’s head, Jerry Silverman, is a former clothing executive and now serves on the board of Weis Markets, a regional supermarket chain.) Hoenlein currently serves on at least six.

Some of the Presidents Conference’s former leaders and members have not known about Hoenlein’s board memberships. Others have been aware of some of them but trusted the organization to do any necessary vetting.

“My assumption is that he did it with permission,” said Abraham Foxman, the former leader of the ADL. “Nobody raised an objection.”

When Delek Drilling invited Hoenlein to join its board, the extent of the vetting required by the Presidents Conference was that he ask the permission of Greenberg. Greenberg said yes. That was the end of the process. Neither the executive committee nor the broader membership was informed.

Greenberg defended the oversight at the Presidents Conference. “We are not bureaucratic,” he said. “We do have a rights and responsibilities committee. We do have an audit committee. We do have a compensation committee I understand exactly what our obligations are and aren’t.”

Hoenlein is currently serving on the boards of at least five other companies, including Fortress Biotech, a biotechnology investment firm; Nanox Imaging plc, a health care technology firm based in Gibraltar, and Wellsense Inc., another health care technology firm. From 1999 to 2013 he was a board member of Bank Leumi USA, the American arm of a major Israeli bank. He has also served on the boards of ODF Optronics Ltd., a military technology firm; WaterChef Inc., a water filtration business, and two pharmaceutical companies, Keryx Biopharmaceuticals and Manhattan Biopharmaceuticals.

He is also on the board of a Queens cemetery that paid him $19,500 in 2016.

Hoenlein served on a number of the corporate boards with Richard Stone, a lifelong friend and professor of law at Columbia University who was the Presidents Conference’s chairman from 2011 to 2013. Stone did not respond to an email from the Forward.

Delek Drilling’s latest filings do not report how much Hoenlein is paid. Israeli securities law caps compensation for directors at the equivalent of $32,000 a year, plus fees for each meeting they attend. They can also receive grants of company stock. At the time of his appointment to the board, Hoenlein owned no Delek Drilling stock. He did not respond to an inquiry about how much he was earning from Delek Drilling. In 2016 his total compensation from the Presidents Conference was $610,000, making him one of the best-compensated Jewish communal officials in the United States.

“Malcolm Hoenlein is a guy who works for 20 hours a day,” Greenberg said. “He’s totally dedicated to the Conference. He would never do anything for any reason that would in any way be detrimental to the Conference. Malcolm loves and lives the Conference.”

For more stories, go to www.forward.com. Sign up for the Forward's daily newsletter at http://forward.com/newsletter/signup/