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High noon for Israel's political gunslinger

Russian-Israeli billionaire Arcadi Gaydamak will succeed both in whitewashing his dubious past and emerging as a political kingmaker in the next Israeli elections.

Commentary by Dominic Moran in Tel Aviv for ISN Security Watch (18/07/07)

Russian-Israeli billionaire Arcadi Gaydamak has emerged on the public stage in Israel in the last year and a half, stepping into a political vacuum left by the collapse in support for the Ehud Olmert government in the wake of the July-August 2006 Lebanon War.

Gaydamak, whose business dealings are tainted by accusations of large-scale money laundering and involvement in the illegal arms trade, has emerged as a voracious takeover specialist buying up a series of Israeli companies this year in lightning acquisitions. These investments come as he builds a political and popular base for a tilt at the Jerusalem mayoralty and for a future role in local and national government.

In a move designed to foster support among disenchanted lower class voters, Gaydamak paid for the relocation of families from areas under Hizbollah and Palestinian rocket fire in July and August 2006 and May 2007 to the center of the country, establishing tent cities for those who had nowhere else to go.

The success of this strategy was helped significantly by the poor performance of the government in dealing with the suffering of civilians in both crises. During the Lebanon war government figures encouraged residents of northern communities to stay in their homes and dilapidated bomb-shelters in a show of national steadfastness under fire.

This gross misreading of the public mood, built on a fundamental failure to comprehend the waning of the nationalist pioneer ethos in Israeli society, combined with the failures of the Lebanon war, has effectively destroyed the nascent political status quo built following then premier Ariel Sharon's creation of Kadima in November 2005.

The resultant collapse of popular support for the government has led to a seeming hankering in recent polls for a return to the left-right Labor-Likud dichotomy of old, with Kadima trailing badly.

This craving for the political battles and certainties of the 1980s and 1990s is itself something of an illusion that reflects more the overall sense of disillusionment and confusion in a society that is struggling to cope with perceived military defeat and a deep sense of political malaise.

In other moves to bolster his popularity ahead of a shift from business into politics, Gaydamak has bought a controlling stake in Israel's best-supported football team, Betar Jerusalem, which is known for the right wing tendencies of its fan base.

Gaydamak has sought to downplay his association with Betar's racist image by providing significant support to the cash-strapped darling of the Palestinian-Israeli sector, the Bnei Sakhnin football club.

The Russian-Israeli tycoon also recently courted the support of the ultra-Orthodox, crucial to his intended tilt for the Jerusalem mayoralty, by seeking in June to buy a controlling stake in Israel's largest non-kosher supermarket chain, Tiv Taam.

Before the deal fell through, Gaydamak signaled his intention to "kosherize" the chain in comments carried by the BBC, saying, "I believe that in a Jewish state, in which there is a large Muslim minority, selling pork is a provocation."

Gaydamak appears poised through his newly formed Social Justice Party to win significant support amongst lower class Jewish voters, many of whom did not vote in the 2006 national election which saw, by Israeli standards, an astoundingly low 63.6 percent turnout.

Rising house rentals and living costs in overcrowded and increasingly affluent central Israel are forcing poor families to communities on the periphery where former Labor and Histadrut union head Amir Peretz demonstrated the existence of a floating and largely untapped voter pool.

A poll carried out by Gaydamak's party showed it could receive 17-23 seats in the 120-seat legislature, which would leave it vying for second party status with Labor on current polling, though 10 seats would be a more likely, and not inconsiderable achievement. Social Justice was officially unveiled last 8 June and has yet to appear in regular national polling.

At least one prominent former Peretz activist has joined the new party and more are likely to follow as new Labor leader Ehud Barak reasserts Labor's modern identity as an Ashkenazi, middle-class, pro-business party.

Unlike Peretz in 2006, Gaydamak is not lumped with a party considered anathema to most lower class voters and can hope for a significant popular support if he is able to stave off efforts to extradite him to France on gun-running charges - which mean nothing to his potential constituency.

The new party could also benefit significantly from the vote of the large Russian-Israeli community. Gaydamak's list will be competing here in a head-to-head contest with the Likud and right wing Yisrael Beiteinu party of Avigdor Lieberman.

Yisrael Beiteinu entered the governing coalition in October and there is a sense that Social Justice is being formed to give Netanyahu a more pliant partner in a future coalition. Gaydamak has stated repeatedly that he wants Netanyahu to be the next prime minister.

However, the Likud fears that Social Justice could split the traditionally right wing Russian and Mizrachi vote, threatening their chances of emerging from the next election as the largest party. The next election is scheduled for 2010, but the right is continuing its push to bring down the government in coming months.

Gaydamak's effort to enter the Israeli political contest is threatened by a 494-page indictment provided by French officials to Israeli authorities, accusing the tycoon of illegal arm shipments to Cameroon and Angola in the early 1990s and misappropriation of funds.

The indictment provides detailed descriptions of Gaydamak's purported sale of Soviet weaponry procured in Eastern European states, with the operation allegedly masked by a lobby he established in Paris. The proceeds from the sales were deposited in banks in a number of countries, including Israel, the Jerusalem Post reported Tuesday.

Gaydamak's close ties with Angolan authorities appear to have been severed after his recent visit to Luanda, in a sign that French investigators may have strengthened their case against him.

An international arrest warrant was issued in 2000 at the behest of French authorities in relation to an Angolan arms smuggling case.

Israeli fraud squad detectives recommended the indictment of Gaydamak in a case involving the alleged laundering of US$230 million at a Bank Hapoalim branch in Tel Aviv. A number of high profile figures including Israel's UK ambassador Zvi Hefetz have been questioned in the probe and 24 bank employees have been arrested.

Gaydamak was also questioned in February in relation to an alleged bribery attempt involving the provision of free Betar season tickets to the suspended bureau chief Shula Zaken of the Prime Minister's Office, Ha'aretz reported at the time.

The tycoon's office claims that the gun-running charges have no basis and are being pursued under pressure from figures in the French administration, and business and political rivals.

There are serious doubts as to whether Gaydamak will ever stand trial in France. Israel rarely extradites Jewish citizens. The Post report notes that the French Foreign Ministry said Tuesday that the decision whether to arrest, question and extradite Gaydamak rests with Israeli authorities.

Given his increasing power in Israeli business and political life there is every indication that Gaydamak will succeed both in whitewashing his dubious past and emerging as a political kingmaker in the next Israeli elections.

Dr Dominic Moran is ISN Security Watch's senior correspondent in the Middle East


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