Judge Anat Baron, ruling in an appeal submitted to Israel’s Supreme Court, wrote about one of Israel’s largest construction companies Heftziba as follows:
“In the late 1960s of the last century, Mordechai Yona founded the group of companies known as the ‘Heftziba Group’ whose business was in the field of construction and over the years his son, Boaz Yona, joined him in managing the group’s business. Later, the Heftziva Group became one of the largest residential construction companies in Israel, selling thousands of apartments to many families… In August 2007, the group collapsed, and liquidation proceedings began against it, while its financial debts amounted to approximately 1.5 billion shekels.
The collapse of the group caused a severe blow to buyers who were left without apartments, some of whom were not even given guarantees against the amounts they paid – contrary to the law. Boaz Yona, who served at the time as a director of the Heftziba Group, was convicted (as part of a plea deal) of having used the apartments buyers’ money for his personal needs, refrained from providing them with legal guarantees to secure their investments in the apartments, and kept false records in the company books. He was sentenced for seven years in prison and was ordered to compensate the apartment buyers in the amount of NIS [Israeli New Shekel] 4 million. A short time before, in May 2011, Mordechai Yona passed away.”
Many in the public in Israel, and especially the victims of the Heftziba company, asked how the regulators and state authorities were asleep when concerns were raised about the company. The answer to that lies, perhaps, in Liberia.
Israel’s foreign ministry cables published in April by Haaretz reveal how Israel paid bribes to diplomats, members of the military junta in Liberia, and its dictator Samuel Doe in exchange for the renewal of relations with Israel and to vote in its favour at the United Nations.
Along with the renewal of diplomatic and security relations with Liberia in 1983, the activity of Israel’s private companies in Liberia was renewed, with the assistance of Israel’s foreign ministry. One of the key businessmen was Mordechai Yona.
Samuel Doe. Photo: Wikimedia Commons/Bobanchi/CC BY-SA 4.0
Earlier, on April 19, 1996, Ronan Bergman published in Haaretz the details about the dramatic rescue of the employees and property of Yona’s company after the Doe regime collapsed, in which Doe himself was executed. Dozens of telegrams recently disclosed to the public – available with the Israel State Archives – reveal Yona’s problematic business conduct in Liberia with the assistance and full knowledge of Israeli officials.
‘You wonder where the funding came from?’
With the help of Israel’s foreign ministry, Yona obtained permits to issue foreign currency, to transfer equipment out from Israel, for loans and financing for various projects in Liberia, including a contract for a period of 37 years for the exploitation and extensive logging of Liberia’s forests.
In a telegram dated March 4, 1985, sent by the Israeli ambassador in Liberia’s capital, Monrovia, Gabriel Gabrieli, it was written that the Israeli state had brought Yona to Liberia and his company’s projects are identified with that of Israel. In the Israeli newspaper Davar, it was reported on March 11, 1985, that these projects were in the range of one billion US Dollars.
On February 26, 1985, the foundation stone for the new ministry of defence building in Monrovia, which Yona undertook at the estimated cost of 20 million dollars, was laid. Four days earlier, Ambassador Gabrieli had sought the advice of Israel’s Director of the Africa Department in the Ministry of Foreign Affairs, Avi Premor, on what to do informing him that Yona demanded that he be allowed to speak at the foundation stone laying ceremony. Gabrieli also added that “constructing a luxury building during the worst economic depression that has ever hit Liberia is unrealistic.” Even worse, Gabrieli wrote, “Of course, you wonder where the funding came from and I have no idea about that.” Gabrieli was of the opinion that he should reject Yona’s demand since “it is impossible for the representative of Israel here to praise this ostentatious construction in front of a large audience, including TV”.
Training for the dictator’s army and diplomatic crises
In June 1987, Israeli prime minister Yitzhak Shamir visited Liberia and met with Doe. According to a summary prepared by the then Israeli ambassador in Monrovia, Aryeh Ivtsen, on July 1, 1987, Doe complained to Shamir that Yona had received his “big contract in Liberia”, even though he had many competitors since he undertook a contract to supply vehicles to the army and the police, but provided only 10 jeeps in two years.
According to the telegrams, this trade-off was done because the Doe regime was bankrupt. Doe was not allowed to freely purchase military equipment from the aid money he received from the US and other countries or from the World Bank loan, without their prior approval. According to a telegram sent on October 8, 1986, by Ambassador Ivtzen, Yona also purchased military equipment for the training with Israeli instructors of 100 recruits in the murderous anti-terrorist unit (SATU).
In addition, Yona made false promises to Doe that resulted in a crisis between the countries. One of them was to establish a rice farm – one of the staple foods for the people of Liberia at that time. In a memorandum written by deputy director of the ministry of foreign affairs, Mordechai Drori, on October 2, 1984, it was written that Dr. Raanan Weitz (head of the Jewish Agency’s settlement department) called him and warned, “Mordechai Yona does not intend to realise the rice farm that is so important to Liberia, but hopes to get other projects that really interest him… He estimates that Yona doesn’t even have financial resources for the farm and therefore warns us against political entanglement.”
Indeed, entanglement did happen – the rice farm was never established. The Doe regime repeatedly accused the Israeli government of being responsible for the matter and the Liberian minister of agriculture even threatened to sever relations with Israel. The Israeli foreign ministry tried unsuccessfully to find a solution. But in a telegram sent on July 12, 1985, by Ilan Hartov from the Economic Department at the Ministry of Foreign Affairs to the deputy ambassador in Monrovia Yaffa Ben Ari, he wrote the obvious, “There were many meetings in the ministry on this matter. I think there is a consensus on the issue, that is, we are unable to grow rice in Liberia and the Liberians should be removed from the issue … No rice is grown in Israel. There are no rice growing experts in Israel.”
In a telegram sent on August 13, 1985, by Deputy Ambassador Yaffa Ben Ari to the Director of the Africa Department at the Ministry of Foreign Affairs, Avi Primor, she reported on the concerns of the Israeli Embassy in Monrovia, in light of the information that Yona had not paid debts to suppliers, salaries to workers, and as a result, labor disputes had arisen at his projects in Liberia. Ben Ari warned that “Mordechai Yona began to operate in Liberia with the encouragement of the Israeli government and with our assistance. His failure will be our failure. In the sensitive state of relations with the Liberians, such an ‘explosion’ could have very serious consequences.”
In a solution of sorts, on October 18, 1985, the then foreign minister Yitzhak Shamir personally recommended to the Bank of Israel’s Foreign Investment Committee to approve a guarantee from the assets of Yona’s companies in Israel for a bridging loan of $2 million for the deforestation project in Liberia.
Mixing private and state interests
What is described above is not unique to Liberia, but stems from Israel’s foreign relations system. The US and the countries of Western Europe provide huge amounts of financial aid for the security and civilian needs of countries that have interests with them.
But, in contrast, Israel does not usually provide financial aid, and the countries are supposed to finance the Israeli projects and services themselves. This is due to Israel’s limited budget and its reluctance to set a precedent. Israel is afraid that countries will demand and ‘extort’ funds from it as a condition for the establishment and expansion of its relations with them, or that they will threaten to sever relations if they do not receive the financial aid.
As a substitute for financial aid, the Israeli Ministry of Foreign Affairs usually presents the activities of private Israeli companies as an integral part of the official aid of the Israeli government. Thus, in a telegram sent by Rafi Gamzo from the Economic Department of the Ministry of Foreign Affairs on June 7, 1987, he wrote that due to the serious financial situation of the Liberian government, it is proposed not to make promises from the Israeli government in the economic field “and to be content with encouraging and assisting the operations of Yona’s company”.
Gamzo explained that the realisation and success of Yona’s projects “with the backing of the Israeli government, will show that, even if late, Israel lives up to its promises.” In this way, a situation is created where, in the eyes of the regimes in these countries, the State of Israel is responsible for the failures and successes of the Israeli private companies that operate in them, and the representatives of the Israeli Foreign Ministry become a kind of babysitters for Israeli businessmen abroad.
What is described is not unique to Yona. Many businessmen and large companies in the Israeli economy operate abroad with the assistance and coordination of the Ministries of Foreign Affairs and Defense. The personal interests of the businessmen and private companies are mixed with the interests of the State of Israel, which actually becomes responsible for their financial stability and is sometimes required to help cover up the problems in their conduct.
Of course, the mixing of personal and state interests is done in the dark and hidden from the public in Israel. Until this method is stopped, there are expected to be many more corruption cases of Israeli public officials and private businessmen.
Most of the Israeli media and public are indifferent to the involvement of the Israeli governments and private Israeli companies in dubious projects, corruption, and human rights violations in distant countries – often with the racist excuse that “that’s how things work” in Africa, Latin America, Southeast Asia or Eastern Europe. But it may come back as a boomerang to those indifferent, as happened when Yona’s company collapsed in Israel itself.
This article first appeared on the Hebrew media platform The Seventh Eye.
