Revealed: Netanyahu Had an Off-Shore Bank Account
Prime Minister Binyamin Netanyahu held a bank account in the Channel Island tax haven of Jersey between his first term as prime minister and his appointment as finance minister, from 1999-2003, the Globes financial newspaper revealed on Wednesday.
According to the report, during this period, most of Netanyahu's income came from speaking tours around the world.
Documents obtained by Globes show that Netanyahu transferred money to an account in his name at a branch of the Royal Bank of Scotland on Jersey, one of the Channel Islands whose economy is based on offshore financial services.
Jersey has a zero tax rate, making it an ideal tax haven for investors, according to experts, and is ranked as the best tax haven in the world.
According to the documents obtained by Globes, Netanyahu's account was active during the brief period of his time-out from politics, in 1999-2003, after his first term as prime minister and his appointment as finance minister.
Transactions in Netanyahu's account shed some light on his activity during these years. For example, on December 13, 2000, he sent signed instructions to transfer from the account $2,468.45 to the Shimron, Molho, Persky & Co. law firm. Yitzchak Molho is one of Netanyahu's closest aides and is his envoy to the negotiations with the Palestinian Authority.
Molho's partner in the firm, David Shimron, represented Netanyahu in two legal affairs during those years, noted Globes.
Netanyahu personally signed all of the documents, the newspaper found.
Israeli law permits the holding of bank accounts in tax havens, provided that the account owner notifies the Israel Tax Authority about them. However, the Tax Authority, an agency that was answerable to Netanyahu when he was finance minister, is trying to reduce Israelis' use of tax havens.
Globes further noted that during the 2012 U.S. presidential campaign, President Barack Obama's campaign staff fiercely attacked the Republican candidate, Mitt Romney, after the discovery that he had bank accounts in tax havens, even though this was not illegal.
The Prime Minister's Office responded to the report by saying, "This time too your attempts to discredit Prime Minister Binyamin Netanyahu do not fit in with the facts. We are talking about an account that has not been active since 2003. In 1999 after Netanyahu's first term as prime minister he made an investment via the account that had no tax advantage over Israel. The accounts and deposits were fully reported to the authorities in Israel including the Israel Tax Authority and were also included in the declaration of wealth filed by Netanyahu with the Israeli authorities."
Political and financial analysts noted on Wednesday that Netanyahu’s activities are not illegal and will likely not have much of an impact other than embarrassment, particularly since this revelation is the latest in a series of revelations regarding Netanyahu’s fortune and expenses.
Last month it was revealed that Netanyahu exceeded the budget for his residences by a million shekels.
The Prime Minister’s expenditure report showed that the total household expenditure for the Prime Minister's residences in Jerusalem and Caesarea reached 3.2 million shekels in 2012.
This figure comprised 2.9 million shekels for the official Prime Minister's residence in Jerusalem and 312,000 shekels for his private home in Caesarea. The taxpayer must foot this bill even though annual expenditure of only 2.2 million shekels had been approved for the Prime Minister's homes.
Israelis were outraged several months ago when it was revealed that the budget of the Prime Minister’s Residence, which stood at 3 million shekels in 2009, jumped to 5.4 million shekels by 2012 - an increase of 80%.
Several months earlier, the Hebrew-language financial daily Calcalist reported that Netanyahu’s staff had allocated an annual budget of 9,714 shekels for ice cream for the Netanyahu family. The ice cream was purchased from a local Jerusalem ice cream parlor which the Prime Minister had a particular fondness for.
Wednesday’s revelation was condemned by MKs from the opposition. MK Shelly Yechimovich (Labor), for example, called on Netanyahu to run for Prime Minister in Jersey Island instead of in Israel.
“I suggest that Netanyahu run for the leadership of the island of Jersey, where he also placed his money so as not to pay taxes in our state,” she wrote on Facebook. “This is Zionism? This is patriotism? This is a love of our country? Such chutzpah.”
Yechimovich added, “A tax haven is a place where people who are very rich place their money so as not to pay their state taxes, while ordinary people are burdened with indirect and direct taxes.”
“Netanyahu's years as finance minister, including in 2003 when he was still hiding his money in Jersey, were the harshest for the Israeli public,” she said, referring to budget cuts and tax increases imposed by Netanyahu when he served as finance minister.