A long list of Israel’s leading tycoons and bankers contributed millions of shekels over the last 15 years to an ultra-Orthodox educational NGO, Mifalot Simha, run by Yaffa Dery, wife of Interior Minister and Shas leader Arye Dery.
In the next few days Dery and his wife are expected to be questioned by the police.
Dery will be asked, among other things, to explain how he financed real estate he bought in recent years, such as his house in Safsufa, a moshav in the north.
Dery was convicted of bribery and fraud in 2000 and served 22 months in prison.
During the decade between his release from prison and his retaking of the leadership of Shas in 2012, Mifalot Simha received many of its donations from Israel’s economic elite.
Attorney General Avichai Mendelblit opened an inquiry against Dery on suspicion of corruption last March, at the end of a probe into the minister’s financial affairs that lasted several months. The probe began during the term of Mendelblit’s predecessor, Yehuda Weinstein, and included an inquiry in Germany.
The Mifalot Simha NGO is Yaffa Dery’s longtime project. It runs a high school and boarding school for girls with music and software engineering lessons, as well as a teachers’ seminar.
Since its founding in 1997, the NGO has consistently increased its reported activity and the state funds it receives, mainly from the Education Ministry (10-15 million shekels, or $2.8-$4.2 million, a year), have increased accordingly.
The organization’s current CEO is the Derys’ daughter, Shifi Sanans, and several family members and friends have been employed there.
In 2001 the CEO at the time said he had receipts proving that both state and private funds passed to the NGO had been used for the Derys’ private use, including a trip abroad, clothes, food and even stock market shares.
Despite this, every year the NGO Registrar in the Justice Ministry has granted Mifalot Simha a certificate of proper conduct, which enables it to receive state funds.
Apart from public funds, the NGO has received generous donations in recent years from large companies, banks and major business people – Israeli and foreign, religious and secular.
In the years the disgraced tycoon Nochi Dankner controlled the IDB Group, it contributed hundreds of thousands of shekels to Mifalot Simha.
In 2007 the group gave the NGO more than a quarter of a million shekels, and 180,000 shekels in each of the next two years. IDB’s subsidiary Cellcom added 30,000 shekels in 2010.
The Delek Foundation, a non-profit organization belonging to Yitzhak Tshuva’s Delek Group, gave Mifalot Simha some 200,000 shekels in recent years.
As economy minister, Dery refused to sign a clause intended to bypass the antitrust law and win approval for the natural gas agreement – a clear interest of Tshuva and his partners in Noble Energy. However, when the amendment came up for the cabinet’s approval Dery supported it.
Bankers were generous
The major banks also contributed to Mifalot Simha. Bank Hapoalim gave it some 450,000 shekels recently and Bank Leumi gave it 100,000 shekels. Shari Arison, Hapoalim’s controlling shareholder, added half a million shekels in 2012-2013, through the philanthropic fund Matan.
Another consistent contributor is an old friend of the Derys, Austrian magnate Martin Schlaff, who made great but futile efforts on Dery’s behalf during his corruption trial, and who has given the NGO $16,000.
Schlaff paid hundreds of thousands of dollars in exchange for information about a case in which a state witness against Dery – Yaakov Shmulevich – was involved.
Dery made use of this information when he asked the Supreme Court to hold another hearing about his conviction. An NGO Schlaff’s family ran in the ‘90s, which gave money to several institutions and organizations in Israel, gave the highest sums to the legal defense fund that paid Dery’s lawyers.
The interior minister’s brother, Shlomo Dery, was questioned in the past about real estate transactions he had held in Germany with Martin Schlaff’s brother James Schlaff.
Alfred Akirov’s Alrov Fund contributed to a total of 180,000 shekels to Mifalot Simha during 2009-2013, and diamond merchant Beny Steinmetz and his wife Anias contributed some 30,000 shekels in 2012 via a fund they own.
Ofer Group chairman Udi Angel contributed to the $100,000 to the NGO last year; Tadiran Consumer and Technology Products contributed some 200,000 shekels and Shaniv Paper Industry from Ofakim added $38,400.
Other businessmen who contributed to the NGO were Rami Unger (100,000 shekels) and Dan Gertler (300,000 shekels), both of whom have been linked to corruption affairs.
Unger, a shipping and car magnate, had paid former state president Ezer Weizman, his former business partner, a monthly sum of thousands of shekels.
Years later former Prime Minister Ehud Olmert was recorded telling his assistant Shula Zaken that Unger had promised him to give her $10,000 for every month she spent in prison.
Unger said he had refused to support Zaken – but contributed 3 million shekels for Olmert’s defense.
Gertler was investigated in the past on suspicion of bribing Defense Minister Avigdor Lieberman, but the case against him was closed.
Another family with close ties to Shas and Dery, the Mirilashvilis, gave the NGO 600,000 shekels through a fund it owns and a personal donation of some 180,000 shekels.
The family members give hundreds of thousands of shekels a year to the Yehuda Ya’aleh NGO, also run by Yaffa Dery.
Mikhael Mirilashvili and his son Yitzhak run a network of real estate, energy and media businesses.
In 2001 Mikhael was sentenced to 12 years in prison for criminal conspiracy in Russia. He pleaded not guilty and was released after serving eight years.
Since then he holds an annual party with rabbis and politicians to celebrate his freedom. This year the attendants at the party included Dery, Lieberman, Minister Zeev Elkin, Knesset Speaker Yuli Edelstein and former ministers Gideon Saar and Ariel Atias.
The Wolfson family, which supports ultra-Orthodox education projects, donated 283,000 shekels to Mifalot Simha in 2015 and 595,000 the previous year.
The father of the family, Zeev Wolfson, who died in 2012, was a real estate developer with close ties to the political leadership, including Dery and Netanyahu.