So Larry Silverstein the man who was bankrupt in 1991 and now will
receive 7 billion dollars in insurance monies, plus the 124 million or
so he received for building 7 where all that fuel oil was stored - 6,000
gallons contrary to law - and some of the men who no doubt died in the
Twin Towers had said this is a no no, not legal to put such a hazard in
such a zone.....but look at Silverstein, who again is just a front man
for the biggest gypsies and thieves in the universe....but then Rabin,
did he pay with his life and this Netanyahu - but worse of all see the
Ariel Scheinman Sharon connection for you see now the plan is to also
get Negev....where Silverstein wanted to put this Free Trade Zone....and
then, the Minister of Tourism was murdered who took on Sharon - for you
see some of these people did not like this Larry Silverstein.
So on with the show.....as if the demise of the twin towers, was not
enough..and here is a little blurp from the bible calendar that day 911?
Isaiah, chapter 9
"19": Through the wrath of the LORD of hosts is the land darkened, and
the people shall be as the fuel of the fire: no man shall spare his
brother.
The word fuel is mentioned 5 times in the bible..in Ezekial 3 times
Isaiah 2.
Now, on with the story re Silverstein and his henchmen and Sharon and
Free Trade Zone - laundering site for crooked drug monies.......
And remember All the World is a Stage and here are some of the bad
actors, so on with the show....
OSaba
RESURRECTION
David Yerushalmi
The thirteenth of the 13 Principles of Faith articulated
for Jewry in the 11th century by Rabbi Moshe ben Maimon (Maimonides)
testifies to the absolute belief in the Resurrection of the Dead, an
event to take place in some as yet unknown future. Without intending
any blasphemous comparison, it is this article of faith and the
indefatigable and enduring spirit of the policy proposal for a Free
Processing Zone in Israel that give rise to yet another article of
faith, but this one intended for all of those dedicated to public policy
and reform: A policy proposal intended to fundamentally reform a
political economy mired in socialist and statist institutions will
survive many fatal assaults, and indeed be resurrected, if it is well
grounded in factual research, truth, and freedom. To gain some
perspective and to place this article of faith in its proper context,
consider the following review.
In June of 1992, a group of leading U.S. Jewish
businessmen formed a company that was to become the Israel Export
Development Company (IEDC). The founders of IEDC, men like Robert
Tishman, Larry Tisch, Sy Syms and Larry Silverstein, were ardent
supporters of the State of Israel. But like many Americans, they were
leery of investing directly in Israel. However, it was their fears
that made them ready to support the rather grandiose proposal embodied
in IEDC's mandate.
For all of these men, Israel represented a place to donate
millions by way of their favorite charity, be it the United Jewish
Appeal or Israel Bonds. To contemplate a real direct investment in
Israel was not in the cards. The reason was simple: Israel didn't
play by any fixed rules. When it came to allowing the private sector
to do what it does best, Israel was not the place to be. It was a
land without any real legal protections or level playing fields. The
horror stories by these men and their friends about "doing business" in
Israel were legion. Until IEDC came along, this was a nasty truth
better kept under wraps and avoided. Philanthropy - yes;
entrepreneurship - no.
IEDC sought to change this reality through a straight
forward policy initiative proposed by IASPS designed to create a
free?market business environment liberated from the infamous Israeli
bureaucrats and anchored in LAW. Such it was when IEDC shareholders
first met with then?Finance Minister Avraham (Beiga) Shohat in September
1992 in New York and made their best pitch, a collective personal
guarantee: Enact the Free Processing Zones (FPZ) Law as we have
proposed and rest assured that we will spearhead $250 million of direct
investment just in the development of the first high?tech, "infopark"
free zone in Israel. The companies that would be attracted to the
zone would invest hundreds of millions of dollars more and employ at
least 20,000 workers. Beiga Shohat was impressed.
Unfortunately, then?Finance Minister Shohat lacked any
useful knowledge of economics, business, and free markets. What
impressed Shohat was the idea that the world's leading Jewish
businessmen had come together in one room and promised a huge investment
without asking for anything in return – no grants, no loans, no
handouts whatsoever – just an FPZ Law that guaranteed them a truly
free zone that still respected Israel's health, safety, and
environmental laws. Indeed, the FPZ Law would still allow the Israeli
government to collect a 15 percent flat tax on distributed profits.
What was there not to like?
Death at the Hands of the Bureaucrats; and Resurrection
As far as Shohat was concerned, however, that was as far as it went.
>From there on, the best he could muster was the ability to appoint one
committee of government bureaucrats after another. The bureaucrats in
charge of the government continued to leak story after story to all of
the newspapers that the FPZ was a non?starter. It came as no surprise
then, in January 1993, when the committee of bureaucrats empowered to
decide on the FPZ Law's fate had rendered its decision: NO. The
headlines were all but unanimous as they proudly declared: The Free
Zone project is "Dead and Buried."
It was at this moment that our article of faith was to be
tested. Would solid research, truth, and freedom overcome what seemed
to be insurmountable odds to all of the Israeli pundits who dared to
speculate? Indeed, the FPZ policy proposal, anchored in the reality of a
for?profit company advancing its own interests and the interests of the
economy of the State of Israel, was not about to remain among the
deceased for long. As many of you know who have followed the
Scorecard over the years, the committee's decision, headed by Yoram
Gabbay, at the time the director of the Internal Revenues Department,
was not the final answer. In fact, IEDC successfully lobbied
then?Prime Minister Yitzhak Rabin who in turn pressured Shohat.
Shohat's response was to appoint another committee, this one headed by
the tax commissioner, Moshe Gavish, the one member of the Gabbay
Committee who had voted for the project. Gavish, it must be told, had
already announced his intentions to depart from government service and
was already eyeing the private sector for a future position.
What was it that ultimately carried the day? Why was
the Israeli government literally forced to reject the Gabbay Committee's
report? The answer: IEDC promised to publicly expose the report as a
bundle of absurdities, lies, and deceptions. The most egregious of
these lies was one crafted by Chairman Gabbay himself. In fact, it
was technically the most important reason for the committee's rejection
of the proposal. Fortunately for IEDC, Gabbay had overplayed his
hand.
In his report, Gabbay contended that he had a government
legal opinion concluding that the FPZ Law itself was illegal, a
veritable violation of international free trade agreements. In
response, what IEDC pointed out to all those who were listening was that
(1) Gabbay had no such legal opinion; and (2) the only legal opinions
that existed were ones prepared by international trade experts at IEDC's
behest. Indeed those legal opinions were potentially explosive for
they pointed out not only that the FPZ Law was fully compliant with
international law, but also that Israel's current government subsidy
programs, which doled out millions of dollars to many of Israel's
favorite?son companies, were outright violations of international trade
law.
Very quickly IEDC was informed that if it kept quiet about
Israel's dirty little secret known as the Law for the Encouragement of
Capital Investment (i.e., Israel's business subsidy program), opposition
to the FPZ Law would end. IEDC kept quiet and the bureaucratic
opposition was muted – at least for the time being.
Thus it was, that after more than a year of legislative
drafting work among all of Israel's various ministries and lobbying
among all of Israel's 120 Knesset members, the FPZ Law emerged as the
law of the land (compromised to be sure, but still an excellent free
zones law by international standards) on June 20, 1994.
Death by Legislation
The FPZ Law, by design, incorporated legally mandated timetables.
Most notably, the Free Zones Committee, a creation of the FPZ Law
itself, was legally required to publish the tender for the concession to
build, market, and manage Israel's first free zone by the end of
November 1994. Of course November 1994 came and went and there was no
such tender. Indeed, what was occurring was the blatant violation of
Israeli law by government bureaucrats. While IEDC, in reliance upon
the FPZ Law (1994), was out spending millions of dollars marketing and
preparing its tender response, the Free Zones Committee, a committee
whose mandate was defined and restricted by the FPZ Law, was secretly
trying to kill the law by preparing 32 changes to the 67?article FPZ
Law. In other words, what the bureaucrats failed to accomplish
through bureaucratic means in 1992, they now sought to achieve through
legislative chicanery and outlawry.
Note well what has just been described, for in any sane,
law?bound democracy it would be cause minimally for civil recourse and
administrative sanctions against "civil servants" who, within the
fortress?like anonymity they erect around their clerical fiefdoms,
anoint themselves masters over the electorate. To be certain that
even the bureaucrats themselves understand this point, permit a lawyer
to spell it out for them in even more basic lay terms. Bureaucrats,
not elected politicians, the very bureaucrats whose power was defined by
the FPZ Law, broke that law by not publishing any tender and at the same
time sought to eviscerate the substance of the law, rendering it
impotent in all but one important way: it continued to authorize
their jobs and salaries.
Indeed, a tender was never published under the law. The
bureaucrats submitted and passed their own version through their
surrogate, Finance Minister Shohat, who was able to take the podium and
introduce the changes to the Knesset on January 1, 1996, after Shimon
Peres, who had just replaced Rabin as prime minister, let it be known
that the only thing in the world that mattered to him was that Israel
continue to place life, limb, land, and free market reforms on the altar
of his dream of a New Middle East without borders.
Predictably, IEDC publicly withdrew from the charade.
Shohat begged and pleaded with this writer and others involved with IEDC
to respond to the upcoming tender. IEDC remained unequivocal and
steadfast: a tender based on the now perverted FPZ Law was simply a
joke and unmarketable and IEDC would have nothing to do with it.
Shohat, now desperate, called for a special "Focus Day" on the upcoming
zone tender at which he informed several in the crowd that the interest
in the revised law remained high, and he predicted with all the gusto he
could muster that the tender would draw many competitive international
bids.
The tender, in all of its splendor is published. No one
bids. The FPZ is announced Dead on Arrival, once again. The
bureaucrats, notably those in the Finance Ministry who killed the
project, violated law and abused the principle of good government,
either continue in their posts or "retire" to six? and seven?figure
salaried private sector jobs.
Resurrected Yet Again
That year, however, was to bring change to the scene and a hint of
hope. Back in New York, Larry Silverstein decides it is time for a
change in the leadership at IEDC. This writer, David Yerushalmi, who
had led the IEDC effort since its inception, is asked to turn over the
leadership of the company to Silverstein, an accomplished real estate
developer and ardent fundraiser for the Jewish Federation of New York,
itself a big contributor to Israel. After spending more than $7
million lobbying for and marketing the Free Zone project worldwide, very
few among the IEDC shareholders were prepared to just walk away from
this effort. Charity was charity; but this was business - even if
till now, it wasn't particularly good business.
That year brings change in Israel also. Israeli
national elections in 1996 bring a self?styled free?market hero to
power. Newly?elected Prime Minister Benjamin (Bibi) Netanyahu
promises radical free market reform. In July 1996, Ariel (Arik)
Sharon is appointed minister of infrastructure and after several
ministerial comings and goings, he is given the responsibility over the
FPZ project. Because IEDC's former lawyer, Ya'acov Neeman, is the
finance minister at the time, all FPZ responsibilities are shifted to
Sharon, who, true to his word, promises his strongest support for the
project.
During almost all of 1998, Silverstein is busy meeting
with and pushing Sharon and his bureaucrats to "get the Zone done." At
first, Silverstein is so optimistic that he authorizes the effort to
compete for the tender BEFORE the FPZ Law is restored to its original
form. Had not IEDC dutifully read Kaddish over the deceased: the
revised and distorted FPZ Law? Had not the project died?
The short answer to these questions is Yes and No. Yes
the project had died. But, a sound policy proposal that artfully
enticed some of the world's most successful Jewish businessmen to invest
(not donate) $7 million in a viable business that would also provide
jobs and investment in Israel was not to succumb to the realities of
"dust to dust" so readily. Good policy, helped along by a design for
survival that relied upon a businessman's instinct for survival and
profit, was the formula for yet another Resurrection.
Indeed, the resurrection was already in motion. First,
the bureaucrats literally pack their bags and fly to New York to assure
Silverstein that everything will be done to insure that things will be
different this time around. These bureaucrats, they argue, are all in
favor of the project.
Second, the Israeli "civil servants," albeit in the name
of their minister, convince Silverstein that once IEDC is selected as
the first zone's concessionaire, the bureaucrats will go to work to
change the law back as close to the original as Israeli politics
allow. Silverstein agrees and the IEDC board of directors follows in
tow. Even from the grave as it were, the idea embodied in the
original FPZ Law, the idea that laws are meant to protect freedom, and
by freedom in economics is meant free markets, and that free markets are
meant to protect real competitive level playing fields, has forced
itself back upon the scene. The policy lives.
Subsequently, a special "Pre?Qualification Selection of
Potential Bidders" for the zone concession is published. Predictably,
only IEDC bothers to respond, and IEDC is the choice by default. But
Israel is Israel and the story does not end here. The bureaucrats
then provide Silverstein with the tender, essentially saying, sign
here. Where? On the dotted line of a new 400?page monstrosity based
upon the "new" law. Sign here and then we'll get down to work fixing
all of the problems: business - Israeli style.
Now, Silverstein is a believer, but he is certainly no
one's fool, especially when it comes to developing real estate, even a
piece of real estate in the Holy Land. He balks. "I can't do
it. This thing is a nightmare. It can't be done." The message
is sent. Silverstein meets again with Sharon, and again with his
bureaucrats in New York, this time calling in vaunted free zone experts
from the U.S. capital, and by mid?December 1998, Sharon and his team
of civil servants agree: The original FPZ Law must be restored; the
changes must be rolled back. Truth and logic and good policy appear
to have ruled the day.
But even good policy instruments are just that,
instruments. And, even the most effective is subject to the
limitations of the national and political institutions that must come to
bear to wield those instruments. In this case, good policy is up
against the most formidable of opponents: local Israeli politics. At
the time of this writing, literally as the Cabinet is sitting down to
authorize the reversal of the bureaucrats' death?knell changes to the
FPZ Law, that very same government is disintegrating into the muck and
mire of an Israeli election season, prematurely brought on because
Netanyahu was not a free market reformer.
But then again, neither Netanyahu nor any leader of Likud
or the so?called Israeli right could muster the humility and leadership
of a modern?day Moses and lead Israel away from dependence on aid and
toward the promised land of economic independence. For that would
require "a leap in being" beyond the aid?driven power politics that
control our lives so completely in this special corner of the world.
And for that and the Final Redemption, we must pray.
N.B. Reports have just been received that the Finance
Ministry bureaucrats have decided that they deserve another opportunity
to bury this proposal once and for all. They have apparently
convinced Netanyahu's aides that he'd better not make this a
pre?election issue or they will wreck his campaign plans. Thus, as
acting finance minister since Neeman's resignation, Netanyahu's
"election campaign economics" are now held hostage to the bureaucrats in
the Finance Ministry. And, if in Israel good economics are a rare
thing indeed, good economics during the run?up to elections are a
non?existent thing. Despite the opposition of the bureaucrats,
Netanyahu promises once again to restore the original law.
Resurrection?
David Yerushalmi is chairman of the board
of the Institute for Advanced Strategic and Political Studies in
Jerusalem and Washington, D.C. Between 1992 and 1996 he was CEO of
the Israel Export Development Corporation
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