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Friday, August 24, 2012

Rabbi's Bless My MONEY

Rabbi Yaakov Ifergan. (the “X-ray rabbi”)
Rabbi Yoshiyahu Pinto.

The United States has a Protestant work ethic, named for a religion that has industriousness at its epicenter. Religion is what made America aneconomic powerhouse and enriched many of its citizens.

The Israeli version of the religion-capital nexus is a bit different. It features a lot less work and a lot more superstition, blessings and prayer, while the capital moves from the citizen to the religious institutions (and to the functionaries and machers – big shots – who control them).

The pilgrimages of the very rich to the rabbis attest to this, and the economic reality underlying the bizarre friendship between the rich and the religious constitutes a very disturbing picture.

Two of the most prominent businessmen in Israel in recent years, Nochi Dankner and Ilan Ben-Dov, are currently experiencing major difficulties: The corporations they own are in existential danger. Dankner’s IDB Holdings, for example, owes the public almost NIS 5 billion.

Ironically, both on the way up and during the slide down, these two tycoons consulted rabbis to whom the ultra-rich attribute almost magical powers: Rabbi Yaakov Ifergan (the “X-ray rabbi”) and Rabbi Yoshiyahu Pinto.

Some might consider this reverential attitude to be the businessmen’s private affair. But what makes it of general concern is the fact that these people have donated millions of shekels to the rabbis’ not-for-profit associations, partly through public companies.

Effectively, then, this turns members of the public whose money funds those companies into donors.

This same public that lent these tycoons billions of shekels, now, owing to their straitened circumstances, cannot be certain it will recoup its money.

But there is more at stake here than the use of money raised for public companies.

Today, more than ever, in light of the tremendous difficulties being faced by Dankner, Ben-Dov and others of their ilk, we need to question the rationality and degree of responsibility of the decisions made by these people, who control vast enterprises (IDB accounts for 5 percent of Israel’s GDP) and employ tens of thousands of people.

Were crucial decisions for the Israeli economy made, at least partly, with the aid of popular rabbis who have no business experience? Was

Dankner’s investment in Swiss bank Credit Suisse, which many viewed as a gamble and inflicted losses of billions on IDB, also made with a rabbi’s advice?

Did the rabbi give his blessing to Dankner’s purchase of the newspaper Maariv, with its longstanding liquidity problems?

Was the gigantic credit line Ben-Dov took through his public companies to acquire Partner, the cellular phone provider, given religious “authorization”?

“These are businesspeople whose stomachs churn when they have to make huge, crucial decisions, so they want approval from the rabbi, because that makes it easier for them,” says a top lawyer who advises the ultra-rich. “But the truth is that these rabbis have little understanding of finances, so they don’t really say anything. I was present at several of these events.

The businessman says to the rabbi, ‘I want to execute this deal, but my stomach is churning.

The rabbi tells him, ‘Don’t do it.’ Or the businessman tells the rabbi he wants to do a deal that could catapult him higher, and the rabbi says, ‘Go for it.’ Sometimes the rabbis adjust the answers to align them with the businessman’s reactions.”

Another businessman rather cynically suggests an interesting correlation: “I look at the people who go to the rabbis and see mainly the most leveraged tycoons [those who took large-scale credit from the public and the banks for their business concerns], such as Ben-Dov or Dankner or Jacky Ben-Zaken. With the tremendous leverage now in danger, they need someone to cling to.”

The question of who is clinging to whom is complicated. Even as the business tycoons have run into trouble in the past few years, the 46-yearold Ifergan and the 39-year-old Pinto have become mini-tycoons themselves, estimated to be worth tens of millions of shekels each.

Ifergan ranks sixth this year on the Forbes Israel list of the country’s richest rabbis, with a personal fortune of NIS 90 million. How did this come about? Ifergan and Pinto are known among their colleagues for their wisdom, personal charm and charisma, and Ifergan, the “X-ray rabbi,” is said to be able to discern medical problems simply by looking at a person.

But have these rabbis become rich solely from their religious activities, giving free advice to business magnates? Apparently they have, because even though they are regularly consulted by dozens of businessmen and members of Israel’s political and security elite, not one case is known in which Pinto or Ifergan took personal commissions for their efforts.

Greetings from the PM

Anyone who was in the Negev town of Netivot on July 1 at about 9 P.M. could have learned something about the so-called X-ray rabbi’s clout

and his relations with Dankner. While millions of people around the world, and in Israel too, were glued to their televisions to watch Spain win the Euro 2012 Championship, the poverty-stricken town in the south was the scene of the annual hilula (a public celebration in memory of a saintly rabbi) commemorating Rabbi Shalom Ifergan, the X-ray rabbi’s father.

As always, the lavish affair was graced with the presence of hundreds of people from the local economic and government elite, among them Education Minister Gideon Sa’ar; Ilan Ben-Dov; Menahem Gurevitch, owner of Menorah insurance; Judge Georges Azoulay, president of the magistrate’s court in the northern district; the army’s chief rabbi, Brig. Gen. Rafi Peretz; former police commissioner Moshe Karadi and many others.

How far does Ifergan’s influence extend at this time? For the first time in the 18-year tradition of the hilulot, a video message to his family and the guests was sent on this recent occasion by the prime minister. “Dear Rabbi Ifergan and the members of the Ifergan family,” Benjamin

Netanyahu said. “Today you are marking the passing of the head of your family, Rabbi Shalom Ifergan, the Baba Shalom ... Your Eminence the

Rabbi, I know that you are following your father’s path in helping the needy and in the aspiration to forge unity. I wish you many more years of blessed activity.”

But the high point of the evening was the arrival at the celebration, next to the municipal cemetery, in separate but equally luxurious cars, of Rabbi Ifergan himself and his guest, Nochi Dankner, who received a royal welcome.

TheMarker described the spectacle thus: “The announcer declares the arrival of the two and as soon as they step out of their cars, they are surrounded by hundreds of yeshiva students, guests and media photographers.

The crowd moves inside singing loudly until the two take their seats at the head table on the central platform.”

How close does the businessman feel to the rabbi? “We are good friends, close,” Dankner said of his relations with Ifergan in a documentary   about the latter that was broadcast on Channel 10 in 2010. “We have been friends for 11 years and I love the rabbi. I enjoy him, his wisdom, his advice, his experience, the way he cares about me, his concern for me, and we are truly good friends.”
Possibly contributing to these effusive remarks was the fact that the film’s director, Sharon Kidon, a former advertising executive and currently a radio presenter, is known to be an admirer of the rabbi and is married to the adman Mody Kidon, Dankner’s best friend.

In the film, Sharon Kidon described how Dankner pulled off the most dramatic coup in his life, a decade ago.

“At the X-ray rabbi’s advice, Dankner opts to pass up an attractive deal,” the film’s narrator says.

“He prefers instead to take the risk of a surprising move that many saw as a tightrope-walk that was way beyond his ability. Against all the odds he acquires IDB, the country’s largest concern.

Dankner’s move proves successful and makes him Israel’s leading businessman. The synergy between the two [Dankner and Ifergan] is only heightened ... They maintain close, daily ties.”

Why, of all those who are close to Ifergan and seek his guidance, is such great honor bestowed on Dankner? The key word here is synergy. The

financial reports of Ifergan’s two major associations, Brit Shalom V’Chesed and Yad Yehudit − about which information is being made public for the first time − show that Dankner is the rabbi’s biggest donor.

Between 2005 and 2010, as he was assuming tycoon status, Dankner donated at least NIS 20 million to Ifergan’s associations. Most of the funds were transferred personally by Dankner from two of his private companies, Ganden 2000 and Ganden Holdings, through which he controls

IDB. Because Ganden Holdings was the recipient of large dividends from the public companies, it can be argued that money invested by the public made its way to the rabbi in this manner.

All this may be indicative of the high regard, whether justified or not, that Dankner has for Ifergan. When it comes to private firms or personal transactions, an individual can generally do whatever takes his fancy.

But it was not Dankner’s private pocketbook that helped catapult the rabbi from Netivot to a leading place in the Forbes list.

With Ifergan heaping honors on Dankner, and Dankner reciprocating, in an ongoing cycle, it turns out that Ifergan’s high regard (plus maybe a small blessing) should also be bestowed on tens of thousands of Israelis who unknowingly donated about NIS 4 million to him during those five years.

Those donations were made largely through IDB’s Fund for the Community, which receives its donations budget from the IDB Group’s public companies.

These include Discount Investments, IDB Development, Koor Industries, Golf and others − companies in which the public is the major shareholder.

Paying the rabbi’s salary

The public, of course, did not choose to make these donations. Indeed, many of the pensioners whose funds are helping finance the public companies would not necessarily be pleased to learn that, as the reports of Ifergan’s associations show, the donations to them go mainly to cover scholarships for yeshiva students.

Another aim the investing public in Israel possibly did not know it was supporting, is the annual hilula in memory of Ifergan’s father.

The Brit Shalom V’Chesed association spends between NIS 300,000 and NIS 650,000 a year on the celebration. A third major expense is the annual salary of Rabbi Ifergan himself, which grew from about NIS 267,000 in 2005 to approximately NIS 440,000 five years later. That makes

Ifergan one of the richest inhabitants of Netivot, a town in which economic hardship is rampant.

The declared aim of Brit Shalom V’Chesed is “to establish and manage a synagogue, a yeshiva, a kollel [yeshiva for married men] and to organize acts of charity and philanthropy.” Its major donors, in addition to Dankner and his investors from the general public, include Bank

Hapoalim (whose major shareholder is also the public); Zur Shamir Holdings controlled by Moshe Schneidman, the owner of Bituach Yashir insurance company; and the Education Ministry, which supports the rabbi’s association to the tune of millions of shekels.

In addition to all these glittering names, many of the donations to Ifergan come directly from his followers, or from those who seek his blessings.

These amount to many hundreds or perhaps thousands a year, including blessings via the Internet or the telephone, personal blessings bestowed in the course of hospital visits or during various events held by the rabbi.

The recipients of the blessings are asked to donate whatever they can − and this adds up to millions of shekels annually.

The interesting question is of course who Dankner, Ben-Dov and the other high rollers are actually supporting, in part with money from the public.

In 2010, Ifergan used most of the donations he received − NIS 6.1 million − to provide scholarships for yeshiva students. Another NIS 1.2 million was earmarked for what the financial reports term “Torah activity” and “ritual objects,” with another NIS 260,000 going for media services. That left NIS 1.1 million to be used to help the needy.

Ifergan’s other large association, Yad Yehudit, transferred NIS 4 million for scholarships and aid to the needy in 2010.

According to the association’s reports, its aims include giving charity and philanthropy, assisting with medical treatment in Israel and abroad, and constructing medical and public buildings.

Of the NIS 4 million, more than half − NIS 2.4 million − was transferred to Brit Shalom V’Chesed, meaning that most of that amount also went to yeshiva students.

Like a revolving door, while Yad Yehudit transferred millions to Brit Shalom V’Chesed, the

latter transferred funds back to Yad Yehudit.

Yad Yehudit also transferred an additional NIS 300,000 to another small association run by the rabbi, Kol Yehudit.

Its aims are to establish and operate religious institutions of learning, from kindergartens to kollels, and to support yeshiva students and provide scholarships for the needy among them.

In 2010, this association received donations of NIS 1 million. Of that, NIS 273,000 went to the happiest teacher in the country.

The association’s report does not state the teacher’s name or ID number, but does declare that in 2010 his gross salary was NIS 274,000, almost four times the average wage of Israeli teachers. At the same time, three other teachers and a principal who were employed by the association earned a total of NIS 95,000 between them.

The report does not specify how many hours a month the highly paid teacher or the others worked, but the investors in IDB will undoubtedly be pleased to know that thanks to them, at least one person who chose the teaching profession is being amply rewarded.

The Dankner brand

Two and a half years have passed since Kidon’s film was broadcast.

The advice and the daily talks with Ifergan did not help Dankner. At present it looks as though the gift of prophecy resides with those the director quoted as saying that Dankner was out of his league in acquiring IDB.

But in contrast to the dubious benefits that accrued to Dankner from his ties with Ifergan, the benefits Ifergan reaps from Dankner’s name and from the names of other businessmen who are close to him cannot be measured in money alone.

They are far more extensive:In recent years, the Xray rabbi has turned Dankner and the other celebrities into his representatives, and for free.

In an investigative report from November 2009 about Ifergan on their program “Hamakor,” on Channel 10, Raviv Drucker and Miki Rosenthal uncovered an internal document from the rabbi and his aides that was written ahead of the 2008 elections to the Netivot municipal council.

“Massive use will be made of the Dankner brand in the direct references to the rabbi and to the declared goals of the list [of the rabbi’s candidates],” the document stated. “Frequent mention will be made of the scale of Dankner’s philanthropic activity as a hint of what can be expected in Netivot.”

The document also stated that a survey would be conducted about the use in the election campaign of well-liked public figures, such as the actor Ze’ev Revach and the advertising woman G. Yafit.

This strategy proved itself. The rabbi’s list of candidates, which was put together at the last minute, won a surprising four seats on the local council. The branding method garnered not only votes but also donations from small businesses.

R. owns a small catering business in the center of the country.

In the past few years he has donated tens of thousands of shekels to associations controlled by Ifergan and Pinto. He reveres them both and is convinced of their saintly character.

“They are wise men who help others and also give good advice,” he says. “If Nochi Dankner consults them, he certainly knows what he is doing.”

According to a person who is closely acquainted with Rabbi Pinto’s court, “Whenever the tycoons arrive, they also make sure to invite more rdinary people so they will see how powerful the rabbi is.”

Role model

It’s not by chance that there are marked similarities between the Dankner-Ifergan relationship and the friendship between Ilan Ben-Dov and Rabbi Yoshiyahu Pinto. Ben-Dov always wanted to be Nochi Dankner. Indeed, in 2008 he stated in an interview that he would like to see

Dankner become prime minister. Like Dankner, he too adopted the model of building a business empire with a little private capital and plenty of public capital he raised as loans.

Like Dankner, he too craved to own a cellular phone company. Like Dankner, he chose a rabbi.

And like Dankner, he too made a point of telling the media that he did not dare take his giant leap in the business world − the purchase of Partner three years ago − without first consulting his spiritual mentor, Rabbi Yoshiyahu Pinto from Ashdod.

Pinto is descended from the Abuhatzeira and Pinto dynasty of kabbalists. In his twenties he was already the leader of a large community of  followers through an association called Shuva Israel, which now has branches in various parts of the world. He divides his time mainly between

Manhattan and Ashdod. In the Israeli port town he lives in a mansion the Jewish-American businessman Jay Schottenstein, owner of the

American Eagle Outfitters chain, bought for him for NIS 11 million.

“The rabbi gave me his blessing in the Partner deal, which is sure to help,” Ben-Dov told a reporter for TheMarker who in 2009 accompanied the rabbi and his followers, many of them from the business sector, on a visit to Bulgaria to pay homage at the grave of Rabbi Eliezer Papo, a revered 19th-century tzaddik, or righteous person. Rabbi Pinto responded in kind with a hug, saying about Ben-Dov, “We cherish Rabbi Ilan.

Rabbi Ilan is a tzaddik. He is donating 10,000 food parcels to needy families for the holidays. Rabbi Ilan is a credit to the people.”

Three years after the Partner deal, the righteous Ben-Dov is the target of rage in the Israeli capital market.

He is unable to repay the hundreds of millions of shekels that Tao Tsuot, a holding company under his control, borrowed from the public − more precisely, from the public’s savings in superannuation funds and its investments in mutual funds − and the company is going under.

As for the Partner deal, which was consummated with Rabbi Pinto’s blessing, Ben-Dov had planned to part with the cellular company in disgrace and sell it back to the Chinese firm Hutchison Whampoa, after Partner’s worth plunged by NIS 8 billion since Ben-Dov bought it.

As in the case of Dankner, Bank Leumi is again one of the big losers, having joined Ben-Dov in the Partner investment. The bank has already written off NIS 200 million as a result of the debacle.

Two months ago, Ben-Dov admitted, “The deal was out of my league.” He did not mention his spiritual mentor on that occasion.

Like the X-ray rabbi, the prophetic ability of the young rabbi from Ashdod − who ranked seventh on the Forbes Israel list of the country’s richest rabbis, with a fortune estimated at NIS 75 million − is in doubt.

Rabbis, whether wonder-workers or not, cannot apparently stand up toone regulator, in this case Communications Minister Moshe Kahlon, who was determined to reform the cellular phone industry for the benefit of consumers and changed the rules of the game for the tycoons.

What is not in doubt is that Ben-Dov has donated handsomely to not-for-profit associations connected to Pinto or his family. More important, perhaps, are the donations made through Ben-Dov by thousands of people who didn’t know they were righteous souls and didn’t have the privilege of visiting Rabbi Papo’s grave.

Between 2008 and 2010, Ben-Dov donated NIS 1.5 million to the Otzrot Chaim association run by

Pinto’s father, Rabbi Haim Pinto, the chief rabbi of Ashdod.

The group’s aims are to operate a kollel and a Talmud Torah (a religious elementary school), and to establish an education network for ultra-Orthodox girls.

Even as he was making these donations, Ben-Dov was busy trying to organize a “haircut” for the holders of Tao bonds − in other words, not to repay the full amount loaned to him by those who bought the bonds.

Like his role model, Dankner, Ben-Dov made some of the donations, worth NIS 700,000, from his public companies, Suny Electronic and Scailex.

In addition, Ben-Dov donated some NIS 800,000 through Suny, Scailex and even Tao to Rabbi Ifergan.

He also attended the annual hilula in Netivot regularly until this year, when he was conspicuous by his absence.

Like Ben-Dov, Dankner too donated to Pinto, not only to Ifergan. In 2010, his private firm, Ganden, transferred NIS 540,000 to Brit Shalom

V’Chesed. Jacky Ben-Zaken, who like the Pinto family also hails from Ashdod and is an admirer of the rabbi, donated NIS 1.2 million through a public company that was under his control until a year ago, Tao Menofim (Israel Financial Levers), and its subsidiaries Pilger and MacPell.

In contrast, he donated only NIS 150,000 through his private company, Manor A.D. Construction and Investments.

This in fact is a prime example of the buddy system in the business sector. It was Ben-Zaken who introduced Ben-Dov to the Pinto rabbis, father and son.

That was in 2007, when Ben-Zaken decided to buy the “Lipstick Building” in Manhattan and invited Ben-Dov to be a partner in the

investment. While they were in New York to examine the deal, Pinto hosted them at his home for dinner and gave the transaction his blessing.

The two businessmen each put up tens of millions of dollars to acquire the property through their public companies: Ben-Zaken through

Financial Levers and Ben-Dov through Tao Tsuot. Within less than three years, the public companies wrote off most of their investment and sold the building at a steep loss.

Tycoons are not the only source of support for Rabbi Haim Pinto’s Otzrot Chaim association. The Education Ministry, under the minister,

Gideon Sa’ar, also pumps millions of shekels into the association every year − NIS 4.2 million in 2010. Support also comes the Ashdod municipality.

The million-dollar question, as usual, is what all this money is used for. According to the financial reports of Otzrot Chaim, NIS 4.75 million is earmarked for supporting yeshiva students and charity for the needy, and another NIS 3.4 million is spent on soup kitchens.

Yoshiyahu Pinto himself operates the far-flung Shuva Israel association (though he does not currently hold an official position in it).

With the exception of one year, the association did not provide a list of its donors to the Registrar of Associations. In 2010, Shuva Israel, whose aims include maintaining Jewish religious institutions, publishing holy books and establishing synagogues, had donations of NIS 10.5 million.

About NIS 2.6 million went for charity and food, and another NIS 2.2 million for scholarships and support for yeshiva students.

But two other interesting items in the report show that the association spent NIS 1 million on postal services and communications, and another NIS 700,000 on traveling expenses. It has been reported in the past that Rabbi Pinto flies first class. In addition, Shuva Israel transfers hundreds of thousands of shekels a year to Otzrot Chaim, controlled by Yoshiyahu Pinto’s father.

Financial Levers stated in response: “Financial Levers views contributing and assisting the community as an important element that it is proper to integrate with its business vision and its many activities.

Accordingly, and as stated in the company’s financial reports, its total donations in

2010 were $642,000 and in 2011 $255,000.” Bank Hapoalim stated in response: The bank donates much money to worthy social causes, all of it exclusively through associations recognized by the state as a “public institution.” Ilan Ben-Dov declined to comment.
No comment was received from the office of Rabbi Ifergan by press time.

Between Netivot and Ashdod

They both grew up in the south of the country in Moroccan families, and they both operate soup kitchens and charity organizations that assist the poorest of the poor.

Yet, Rabbi Yoshiyahu Pinto and Raabi Yaakov Ifergan are above all a hyper-capitalist phenomenon, members of a club that is intended for and maintained by tycoons who are mainly of Ashkenazi origin and in which religion is sometimes viewed as a transaction or a consumer product.

Ifergan, the “X-ray rabbi,” is a baba, a spiritual authority, in the full sense of the word.

He is presented to the public as one who possesses powers, a “divine kabbalist” who can see what is hidden, intercede for barren women and heal the disabled.

Pinto is a tzaddik, a righteous person, who gives advice and confers blessings that it is believed can foment wonders and miracles, but he does not touch practical kabbala or magic (though this does not prevent some of his adherents from attributing supernatural powers to him, something he has never denied).

Ifergan was born in Netivot in 1966 to a large family headed by his father, Rabbi Shalom Ifergan. The latter was a modest, anonymous figure until his death 18 years ago.

Yaakov, who was given a traditionalist upbringing, started to dabble in the kabbala and to glorify his late father as a baba.

He had a huge mausoleum built in his memory in Netivot close to the tomb of the renowned Baba Sali (Rabbi Yisrael Abuhatzeira, 1890- 1994). He also holds a hilula celebration for him every summer, and it is getting bigger by the year.

Seeing the vast honor that is heaped on the memory of Rabbi Shalom, many people believe he was a major figure who left a saintly dynasty, a reputation that has benefited the figures known as “the ultrasound,” “the CT,” “the arbiter” (a woman) and other entrepreneurs of religion from the family, who have created courts around themselves.

This success sparked a bitter feud between the Ifergan court and the Abuhatzeira court, which is also based in Netivot and relies on similar sources of income: hilulot, amulets, consultations and so forth.

Over the years, struggles between the X-ray rabbi and Baba Baruch (Baba Sali’s son) over real estate, spiritual hegemony and political power in Netivot led each side to resort to more extreme methods to restrain or embarrass the other − lawsuits, call girls, threats, wall posters − followed by reconciliations, breakdown and the start of a whole new cycle.

In the past, Haredi sages like Rabbi Ovadia Yosef and Rabbi Chaim Kanievsky have come out against Ifergan’s magical practices and his political initiatives.

This has not been the case with Pinto, who is not connected to the conflict between the rabbinical courts. Pinto was born in Ashdod in 1973, into the Moroccan aristocracy, a scion of two rabbinic dynasties: Abuhatzeira on his mother’s side, Pinto on his father’s.

Despite this lineage, his father, Rabbi Haim Pinto, won rabbinical recognition only after his son rose to greatness (the father was appointed chief rabbi of Ashdod). Pinto attended Haredi yeshivas and was influenced by Ashkenazi rabbis with fanatic inclinations.

He studied under Rabbi Shmuel Auerbach in Jerusalem (Auerbach is now a claimant for the leadership of the Lithuanian − non-Hasidic − community following the death of Rabbi Yosef Shalom Elyashiv) and named his firstborn son Yoel, after the Satmar rebbe.

Pinto established a Haredi yeshiva called Shuva Israel, but his influence grew thanks to the advice he started to give businessmen. His charisma made Shuva Israel a worldwide empire, with institutions and yeshivas in Manhattan, Buenos Aires,

Los Angeles and Ashdod. Pinto travels to these far-flung cities to give lessons, despite his poor health. Thousands flock to hear him and to get advice. He has become an oracle for businessmen, particularly in New York and Israel.

In addition to holding personal consultations and giving mass lessons, Rabbi Pinto devotes time to meeting with his coterie of five to seven people, no more, among them businessmen Jacky Ben-Zaken, Ilan Ben-Dov and David Goldfarb.

Each of them is of course entitled to a personal session with the rabbi, but the rabbinic court attributes great importance to the group, the team, most of whose members are very wealthy or hold/held public positions.

The rabbi sits on a chair and leads the conversation in his soft voice, his eyes glittering.

The talk might touch on the Iranian nuclear project or the euro crisis.

Rabbi Pinto intersperses his commentary (which is almost always gloomy) with quotes from the

ancient sages and remarks of subtle humor.

But what mainly happens in the room is communication between the rabbi and his followers.

If the door opens and another follower enters, he will break off his words in order to embrace him, make room for him by his side, place a soft hand on him and not let up for some time.

He is very well informed about the life of his confidants, their families and their business affairs, and he remembers every detail, suddenly stopping

the conversation to inquire about the health of someone in the room, touching him physically. What’s surprising is that this intimacy has two sides, as the rabbi shares his personal life with the others.

He does not behave like an omnipotent master, but on the contrary, like a fragile individual with weaknesses of his own.

Pinto’s meteoric rise in the skies of Jewish mysticism has encountered obstacles in recent years.

He underwent a series of operations to remove tumors from his body, and the FBI is investigating a case in which Pinto − who spends much time in Manhattan − is apparently the victim of a blackmail plot hatched by two of his former loyalists.

There have also been reports of family intrigues and documented evidence of an allegedly profligate lifestyle. A year ago an incendiary device exploded next to his mansion in Ashdod. No one was hurt.

Nochi’s troubles

Many observers think that Nochi Dankner, who has raised about NIS 40 billion from the public for IDB since he acquired the holding company,

now finds himself in a financial tailspin he will have a hard time breaking. At the moment, it looks as though he will have to request a debt

settlement from the public, which will include a “haircut” of the huge credit line he received. Dankner owes the public a staggering NIS 5 billion.

The IDB Group, which at its height in 2007 was worth NIS 5.5 billion, was worth NIS 800 million as of the middle of this month.

Correspondingly, Dankner’s personal wealth is estimated to be NIS 100 million, down from NIS 1.5 billion five years ago.

It is not only investors from the public who are concerned about seeing the money they are owed. Another worried creditor is Bank Leumi,

Dankner’s biggest financier. In 2002, Bank Leumi, which is controlled by the state, meaning the general public, placed credit of hundreds of millions of shekels at Ganden Holdings’ disposal to enable it to take control of IDB. To ensure repayment of the credit, Dankner put up the IDB shares as collateral.

But because their value has plummeted by dozens of percent, Leumi has already written off more than NIS 200 million of the debt.

Full nondisclosure

It is impossible to know exactly how much Nochi Dankner or the public companies he controls donate to Rabbi Yaakov Ifergan.

Like all public companies in Israel, IDB is not obliged under the law to specify the recipients of its donations. Ifergan’s associations, for their part, have not yet reported their donors for 2010-2011, nor do the donors for 2008 appear in their report to the Registrar of Associations.

Thus, Dankner’s donations to Ifergan could be millions of shekels higher than the numbers reported here for the first time. There is also no way of knowing whether he continued to donate to the rabbi’s associations in the past two years, when IDB has been having serious liquidity problems.

As things stand now, public companies in Israel are required to declare their donation policy in their annual report, along with the total amount they donated and in which realms (such as education, culture or social welfare).

Few companies provide more specific information about recipients of their donations. Overall, Nochi Dankner is the largest single donor from publicly traded companies in Israel. His donations in 2011 totaled NIS 54 million, outdoing even the banks.

According to Maala, which monitors corporate social responsibility in Israel, in 2011 the 36 largest companies traded on the stock exchange (as ranked by the organization) made donations totaling NIS 480 million.

A year earlier, donations totaled more than NIS 600 million. Estimates say that the total donations of the 700 companies traded on the stock exchange stand at more than NIS 1 billion a year and maybe a lot more.

The associations, for their part, are required to submit a financial report to the Registrar of Associations and specify the large donations they receive (generally in excess of NIS 20,000) and the organizations to which they transfer them.

But the reports to the registrar are only partial, are submitted with a two-year time lag (thus, in 2012, associations report the data for 2010), are often missing (for example, the documents of the Registrar of Associations do not list the donors to Brit Shalom V’Chesed for 2008).

The registrar also often allows the associations not to specify the donors or the recipients of the donations (for example, the IDB Fund for the Community, which is a registered association, has never reported to the Registrar of Associations about the organizations to which it makes substantial donations).

From the point of view of the Israel Securities Authority and its chairman, Prof. Shmuel Hauser, if no substantial amounts are being donated to a corporation, there is no need to specify the identity of the recipient organization, as there is no limit to the financial ties of a corporation.

The ISA maintains that similar arguments could be made about ties of public companies with suppliers or about small investments in securities and the like − none of which are reported.

“If the holder of the controlling interest takes a personal interest in setting the donations policy or in making a specific donation, under the

Companies Law he must have the decision approved by a meeting of the shareholders and make an appropriate disclosure,” notes an ISA official.

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