IMRA Newsletter
Weisglass pushed Sharon to reopen Jericho Casino
The Jerusalem Post
May 6, 2004
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During negotiations with the Labor Party in October 2000 over the possibility of the Likud joining a national unity government, Ariel Sharon was asked by attorney Dov Weisglass, today his bureau chief, to speak with then premier Ehud Barak over the possibility of reopening the casino in Palestinian-controlled Jericho, The Jerusalem Post has learned.
The casino is jointly owned by the Palestinian Authority, Casinos Austria, the Austrian bank BAWAG, and Austrian-Jewish businessman Martin Schlaff, a key figure in the ongoing police investigation of the prime minister and his son, Gilad. "At the time I did not think anything was too strange with Weisglass's request, since at the time we knew that he was an attorney for the casino," said one of the participants at a meeting in October 2000 at the Sharon ranch. "But now, with the allegations that Sharon may have received bribes from Schlaff, the meeting and the request seem suspicious."
The reopening of the Oasis Casino, which had a daily turnover of some $680,00 before it was closed nearly four years ago due to the conflict with the Palestinians, depends largely on Israeli policy in the territories.
The owners were reportedly given a franchise to operate the Jericho casino until 2028, with a 10-year tax exemption from the day it opened. BAWAG, like Schlaff, is also eagerly waiting for the government to allow for Israelis to resume gambling at the casino.
Following his victory in the 1999 Likud Party leadership primaries, Sharon went into debt to repay NIS 4.7 million in illegal campaign contributions. Gilad Sharon received a $1.5 million loan, originating in Austria, from South Africa-based businessman Cyril Kern in order to repay another loan the family had taken out in order to return the illegal donations.
The police are investigating the possibility that Kern served as a front man for Schlaff, another friend of Sharon's, and a businessman heavily invested in Israel, who could have made the loan in the hope that Sharon would make decisions favorable to his business interests, including the reopening of the Jericho casino.
"We met to talk about whether Sharon should join a unity government with Barak, and Weisglass told Arik to pressure Barak into reopening the casino," the source said. "They agreed that if Sharon joined the coalition, then they would ease restrictions on the Palestinians in Jericho in order to inadvertently allow for the casino to reopen."
Shortly after the meeting at the ranch in order to discuss Weisglass's proposal, the national unity talks fell through. After Barak called for elections in December 2000, Sharon, in a landslide victory, was elected prime minister in February 2001 and appointed Weisglass as his bureau chief.
In November 2002, after Gilad Sharon learned that police were tracking the money transfers, he received two additional money transfers from BAWAG, totaling some $1.5 million.
According to Paul Herzfeld, CEO of Casinos Austria, the casino in Jericho has four shareholders: The BAWAG bank owns 13 percent, an organization called the Palestinian National Fund owns 25 percent, his company owns 18 percent, and Schlaff is the largest shareholder with 44 percent. The Cancun casino boat currently floating off the Eilat coast in international waters is controlled by Schlaff, who holds 64 percent; BAWAG owns 16 percent and Casinos Austria owns 20 percent.
Herzfeld says that the casino owners invested $100 million in the Jericho business venture and that the shareholders have yet to make back their initial investment.
"We have followed the developments of what is going on in Israel and that is basically all we can do, since the reopening of the casino depends on what is going on in the Middle East and the political developments there," Herzfeld said. "We have tried to keep the project up and running by keeping the casino in good shape so it can be reopened."
Herzfeld confirmed that Weisglass served as Casinos Austria's lawyer in Israel and that his firm continues to handle their affairs. He denied however, that his company is involved in any form of political lobbying in order to reopen the casino, but said that "there were periods that things went in a way that there was a feeling that it might be reopened."
Three weeks before the 2001 prime ministerial elections and a mere two months after the meeting at Sharon's ranch, Schlaff and Muhammad Rashid, Yasser Arafat's personal economic adviser and a founder of the Jericho casino, secretly met with Omri Sharon, the prime minister's other son, Weisglass, and former Foreign Ministry director-general Eitan Bentsur in Austria. Bentsur denies that the casino was mentioned at the meeting and that the sides strictly discussed diplomatic matters, despite media reports suggesting otherwise. "The goal of the trip was to see if there was a possibility to create contacts between Arafat and Sharon for possible talks in the future," Bentsur said.
Following the meeting, however, a source in Arafat's office said that Palestinians believed the discussions explored the possibility of reopening the casino. In addition, Austrian sources quoted in Ma'ariv said the meeting was convened at the initiative of the Casinos Austria's chairman, Leo Wallner.
Last week, police investigators charged that Schlaff was closely connected to straw companies established by Gilad Sharon and that there are serious suspicions the Sharon family received perks from the Austrian businessman.
Police asked the court for permission to read documents seized during a raid on the offices of attorney Avi Alter, who served as a tax consultant for Gilad Sharon when setting up straw companies in the Caribbean. Police believe that these documents may link Schlaff to Gilad Sharon, after a search of Alter's files revealed that he also performed tax services for Schlaff. "According to what we have seen today, Martin Schlaff is linked directly or indirectly to the control or ownership of Gilad Sharon's companies," said National Fraud Squad Supt. Rami Tamam.
Labor Party officials denied any knowledge of a meeting between Barak and Sharon during which the Jericho casino was discussed, but did say there were many secret channels of communication established between the two and that the topic could have been brought up there.
"We were just after Camp David and the national unity talks mostly dealt with a new diplomatic plan and government policy," said Labor Party MK Yitzhak Herzog, who was closely involved in the coalition talks at the time, quickly adding that the casino "may have come up in other channels that were established between Sharon and Barak." Gilad Sharon's attorney, Micha Fetman, denied allegations by police that Schlaff stood behind the Kern loan.
"There is no connection between Schlaff and Gilad, except that they happened to use the same tax consultant," Fetman said. "Kern is a family friend and has no interests in Israel, so in order to create a crime and suspicions police need to say that Schlaff - who has business interests in Israel - stood behind the loan and Kern was only a front man."
Other people involved in the establishment of the casino included Shimon Sheves, a former director-general of the Prime Minister's Office under Yitzhak Rabin and who was recently acquitted of bribery and fraud charges. Sheves, who is a good friend of Weisglass's and was represented by the attorney during his criminal trial, served as a consultant for BAWAG in the casino project.
Sheves is also a close friend of Schlaff's.
Sources close to Sheves said that Schlaff joined the casino project in order to promote peace between Israel and the Palestinians.
Weisglass declined to comment for this article.