YULA grad pioneers new way to move money to Israel


Joseph Sokol is used to reactions of disbelief when he sits down with technology industry bigwigs to pitch his startup, OlehPay, a payments website that enables users to inexpensively transfer dollars to Israeli bank accounts in the form of shekels.

“So you work for them?” they ask the lanky, yarmulke-clad 20-year-old. “You’re an intern? What’s your role? Who runs it?”

Sokol simply grins at their incredulity and informs them that it is, in fact, he who runs the startup, essentially by himself.

The company was born in March out of a problem Sokol himself faced. After graduating from YULA Boys High School on West Pico Boulevard, he moved to Jerusalem to study at a yeshiva, Machon Meir. After being “packed like sardines” into a single bedroom with five other students, he said he and a roommate decided to move out, but found that he couldn’t pay his rent without withdrawing a wad of cash from an ATM at a lousy exchange rate. 

No service seemed to exist that solved the problem for him, a fact he attributes to a de facto oligopoly on banking in Israel.

Sokol thought if he was having this issue, there must be plenty of American olim — immigrants to Israel — dealing with the same thing. OlehPay (olehpay.co.il) seeks to solve that problem.

Here’s how it works: After creating an account with your email and password, you enter the amount you want to pay in shekels, followed by your billing information and the bank account number of the recipient, along with his or her name and bank branch. 

Press a button, and the order is placed: The appropriate dollar amount is drawn from your bank account or credit card and shows up in the recipient’s account in shekels. The service charges a 1.99 percent fee on credit card transactions but is free for debit cards and never charges recipients.

Sokol alleges to be able to beat the individual rate consumers get from financial institutions. The front page of the OlehPay website offers a calculator for how much users can save against the bank rate by using it.

Nowadays, Sokol bounces back and forth between Los Angeles and Jerusalem, where he works out of the office of Forex Israel, the payments company that processes OlehPay transactions. He speaks conversational Hebrew and fluent startup-ese, gracefully conjugating terms of the trade, such as “use case” and “API” (application program interface). 

The company is his foot in the door of what he says is a growth industry — online payments — pointing to a number of companies that have blossomed in that space, including PayPal and Square, a mobile device plug-in that takes credit card payments. As a sign of the ascendancy of the financial technology space, even Facebook has crafted a feature enabling users to pay one another via its messaging service.

So far, nearly $80,000 has passed through Sokol’s service from about 150 user accounts. While much of that sum comes from the types of use he imagined — large, recurring payments such as rent or mortgage — some people have begun using OlehPay to contract with Israeli professionals, like lawyers or software developers, from the United States, he said.

Sokol said that although he’s already received requests to branch out to pounds and other currencies, he won’t be expanding until he feels the service is on solid footing.

Part of the formula of his success is that by looking at the company’s slick website, one would be hard-pressed to finger OlehPay as the brainchild of a 20-year-old who went AWOL from college — after studying a year in Israel, Sokol spent a semester at UC Santa Barbara before deciding it wasn’t his scene. (“I like to think I’m autodidactic,” he explained.)

The web interface is sleek and touts a partnership with the popular Israeli online messaging board for English-speaking services, Janglo.net, where users can pay for work using OlehPay. 

Despite his youth, Sokol is not an amateur in the world of entrepreneurship. At 14, he started a woodworking camp in his backyard in Beverlywood, where he says he taught more than a dozen teenagers how to use a hammer. 

Then, before starting OlehPay, he and a partner he met in yeshiva sold a Hebrew learning application for $15,000, an experience he said provided him with the enthusiasm, connections and starting capital to launch his current venture.

Likewise, he sees OlehPay as a launching pad for bigger and better things. 

“This is absolutely not where I’m going to stop,” he said. “Especially since I sort of gave up my college education for this.”

Is Israel pulling down the shutters for business?


High-tech entrepreneur Eyal Waldman decided he had had enough of Israeli investors when they told him to choose between his titles of chairman and chief executive at the company he co-founded, Mellanox Technologies.

So in August, Waldman delisted the chip designer – Tel Aviv Stock Exchange's sixth-largest company, with a market value at the time of 6 billion shekels ($1.7 billion) – dealing a heavy blow to an ailing bourse that had already seen its chief executive and chairman resign a month earlier.

Waldman said the attitude of Israeli institutional investors, who had been empowered by changes to the Securities Law, was suffocating.

“Mellanox is not an impulsive company. (Delisting) is something we were thinking of, that we saw build up. This was not our place any more,” he told Reuters.

Since Mellanox delisted, a handful of Tel Aviv's largest companies have threatened to follow suit unless Israel becomes more business friendly.

The problem is the result of both more regulation and less.

Over the past decade, Israel has relaxed rules on overseas investments. Previously, Israeli pensions had to invest nearly 100 percent at home; now they can invest without limitation abroad. At the same time, over the past year the government has introduced securities regulations that Israeli companies complain make doing business far harder, including more stringent reporting requirements, pushing even more money out of the country.

The new regulations and other measures were an effort to help consumers and protect investors. Competition was subdued by the domination of a handful of conglomerates in the mobile phone, retail, construction and petrol distribution sectors, and consumers were struggling to keep up with bills.

In 2011, hundreds of young Israelis, angry they could not afford housing and bitter about the high price of groceries, set up a tent city in the heart of Tel Aviv's financial district and for weeks refused to move. This culminated in the largest demonstration in Israel's history, with 400,000 people demanding a more affordable cost of living.

Prime Minister Benjamin Netanyahu reacted with a plan to break up the conglomerates that controlled vast swathes of the economy, opened up markets to competition and forced service providers to cut consumer fees.

The new regulations have brought consumers some relief – lower cell-phone bills and banking fees – but many investors and businesses say it is at a cost of dwindling profits and depressed share prices.

What upset Waldman most were amendments to the Securities Law that he could not have foreseen when he listed his company on TASE in 2007, several months after its offering on Nasdaq.

He was troubled by the empowerment of minority institutional investors, who previously had little influence at the companies in which they invested. New rules require majority approval by minority shareholders for issues such as executive salaries.

WILL OTHERS FOLLOW?

Officials at some of Israel's biggest firms have said that, like Mellanox, they are nearing a tipping point.

Potash producer Israel Chemicals (ICL), the most traded company on TASE, is seeking to list overseas. Though it has no intention at present to delist from Tel Aviv, CEO Stefan Borgas said in a conference call: “ICL must act seriously and take into account a situation of an additional worsening in the business climate of the Tel Aviv bourse.”

The same goes for Nice Systems, whose products analyze video and big data.

“It makes much more sense for us to trade only on Nasdaq,” CEO Zeevi Bregman told the Globes financial newspaper, but made clear a delisting was not on the agenda at this time.

Such talk has scared off investors. Daily trading volume on TASE averages around 1 billion shekels, 47 percent of the level in 2010. Other markets have had more moderate drops; since 2010 trade in London has fallen to 80 percent, on Nasdaq to 77 percent and Tokyo to 79 percent.

Only three small IPOs have taken place in Tel Aviv since late 2011, while about 100 firms, roughly 15 percent, have delisted since the end of 2009.

Investors are not pleased; one public relations firm, on behalf of clients, has launched a Facebook page called SaveTASE, blaming Israel's securities regulator, Shmuel Hauser, for the bourse's woes.

Part of the drop in volume followed a 2011 upgrade in Israel's status on the MSCI index from emerging market to developed. The move led to an exodus of passive money from foreign investors tied to the emerging market index.

Foreigners now account for only about 15 percent of trade on TASE in 2013, compared with up to 25 percent in 2010.

But the real drain has been the money that Israeli institutions have withdrawn as restrictions on overseas investments were lifted over the past decade.

“We are in the process of increasing our investment out of Israel, and this process … still has, in my opinion, a long way to go,” said Amir Hessel, chief investment officer of Harel Insurance and Finance, Israel's third-largest insurer.

Harel's pension, provident and life insurance funds have invested 34 percent of their 102 billion shekels in assets under management and 60 percent of their equities portfolio abroad, up from zero a decade ago.

Nir Moroz, CEO of Clal Amitim pension fund, said as much as 30 percent of his fund's assets were abroad, and that could hit 40-50 percent in the next few years due to a dearth of new local issuance.

Bank of Israel data shows pension funds hold 22 percent of their assets abroad, nearly double the level of 2009, while insurance funds hold 27 percent overseas.

FLOOD OF REGULATION

The protests of 2011 ushered in a flood of regulation that hurt profits in almost every sector – from cellular operators and food makers to institutional investors and gas producers.

Israel's three top mobile phone operators posted an average drop of 71 percent in net profit in the second quarter of 2013 compared with three years earlier, before new regulation and competition kicked in.

“There is a big risk of making business and investing in Israeli companies because of regulation,” said one investment manager who asked not to be named.

Hauser disputes that regulations alone have harmed the markets. Much of the regulation, he told Reuters, was aimed at curbing abuse of power by large stakeholders in companies at the expense of minority holders.

However, he said “the wave of regulation since the 2008 crisis may have gone too far”. He has proposed lowering the capital gains tax to 15 percent from 25, reducing fees for trading and clearing, and trading foreign currency.

With the public's cause taken up by the media, Hauser said it has become “illegitimate” to be rich these days, adding: “We have to stop with this populist atmosphere.”

Among the hardest hit by the new environment has been Israel Chemicals, which has made controlling shareholder Idan Ofer one of Israel's richest people.

ICL, which has an exclusive permit to extract minerals from the Dead Sea, paid 1.2 billion shekels in 2012 in taxes and royalties. A year after ICL reached a deal to double royalty payments to 10 percent, Finance Minister Yair Lapid, a former TV personality who rode the social protest to political power, set up a panel to review once more the level of royalties paid.

CEO Borgas said ICL was worried about the “extraordinary level of uncertainty” in the business environment that the committee's appointment has created.

“Our international shareholders acknowledge this at every encounter,” Borgas told Reuters in an email, adding that this was reflected in ICL's share price, which fell over 15 percent in reaction to the committee's establishment.

Its shares were also hit when Canada's Potash Corp in April abandoned efforts to take over ICL because of strong political opposition in Israel.

Borgas, a former CEO of Swiss chemicals group Lonza, said he was concerned by the scope of regulation and the way it was conducted in what seems to be a response to populism.

“In the current situation we have a negative incentive to invest in Israel,” he said.

Israel's economy relies heavily on foreign investment and, like many countries, it provides grants and tax breaks to attract companies.

Teva Pharmaceutical Industries, Israel's largest company and the world's biggest generic drugmaker, reaped close to 12 billion shekels in tax breaks between 2006 and 2011, according to the Tax Authority. It has come under huge pressure in recent weeks to review plans to shed 10 percent of its global workforce as part of a cost-cutting plan.

ICL was next at 2.2 billion shekels, followed By Check Point Software at 1.65 billion.

When these figures were published by the media in July, the public response was scathing.

Lapid has said he would reexamine the policy, but companies say the benefits are dwarfed by the jobs they provide and the money they contribute to the economy.

“Without this policy a lot of companies would have less business here and would pay less taxes,” Check Point CEO Gil Shwed told reporters in July.

Editing by Will Waterman

Comverse in Israel has new round of layoffs


Comverse let go of dozens of workers in Israel in a new round of layoffs.

The layoffs this week were announced a month ago. Hundreds of workers had been let go previously by Comverse, according to Ynet.

The company, which develops and markets telecommunications software, was founded in Israel and is now based in the United States.

Several leading companies in Israel, notably Teva and Gottex, announced sizable layoffs in recent weeks.

Earlier this month, the Israeli pharmaceutical giant Teva said it was layingof f  5,000 employees worldwide, including 800 in Israel. The Israel layoffs were  frozen pending an agreement between the company and the Histadrut labor federation.

Israel provides Teva with major tax breaks, which were threatened by the layoffs.

Gottex, a fashion and swimwear manufacturer, is laying off dozens of employees as part of an announced restructuring, according to Ynet.

Haifa-based Oil Refineries said last week that it will let go of  nearly 250 employees and ECI began laying off up to 300 workers — one quarter of its staff in Israel — in September, Ynet reported.

Scraping the sky in upscale Tel Aviv


As Yigal Zemah, CEO of Berggruen Residential, stands on the seventh floor of the new Meier-on-Rothschild skyscraper set in the epicenter of Tel Aviv at 36 Rothschild Blvd., a wide smile crosses his face. The luxurious new building slated for completion in 2014 will be the tallest residential tower in the city and, Zemah says with pride, of the absolute highest building and luxury standards currently available inside and out. Although the project represents the tallest residential building in Tel Aviv, Zemah says the original guidelines in the business plan were simple: to build only the best.

“We wanted to do something different and in order to do that we wanted to build something of the highest quality possible with the most sought-after architects in the best location and with the nicest interiors,” he explains. As soon as internationally acclaimed architect Richard Meier agreed to design the building, potential buyers began to call.

As of late summer, 60 percent of the building has already been sold with a ratio of about half foreign and half Israeli buyers. Among the high-profile first investors are financier Nathaniel Rothschild; Eyal Waldman, co-founder and CEO of Mellanox; Lior Reitblatt, CEO of Super-Pharm; and advertising agency executives and partners Mickey Bar and Shoni Reuveni. Although foreign investors are attracted to the project for its unique design and luxurious living standards (a rarity in Tel Aviv until recent years), for many of the ultra-wealthy Israelis who will make this their primary residence, it will be seen in popular culture as the ultimate status symbol.

The grass-roots social justice movement within Israel that is currently fighting against this kind of development sees this luxury tower as one more foot in the grave for Tel Aviv’s middle class. Despite some speculation that the real-estate bubble will eventually burst here just as it has elsewhere in the world, so far it has grown only larger. Towers near the beach such as the Opera and Basel are selling for approximately $550 per square foot. New apartments with a view of the sea are going for as much as $1,455 per square foot and many speculators expect the prices to just keep rising. According to professor Elinoar Barzacchi, the former head of the school of architecture at Tel Aviv University, Tel Aviv is rapidly becoming a place for the very rich and the very poor. Luxury towers exacerbate this problem because rather than providing more affordable housing to a market desperately in need, a smaller number of units is sold for top dollar. 

Zemah shrugs when asked about the Meier-on-Rothschild tower in relation to the current social controversy. 

“This isn’t happening just in Tel Aviv,” he explains. “This is a worldwide phenomena that the rich are getting richer and the poor are getting poorer. We are just another small drop in the bucket.”

There is no doubt that this new residential tower will attract only the wealthiest buyers who can afford not only the steep purchase prices — the penthouse of the building on floors 38 and 39 is, at $45 million, the most expensive apartment ever on the Tel Aviv market — but also the exorbitant maintenance costs for the pool, spa, Jacuzzi, sauna, a 24-hour concierge, gardens, cleaning services and habitual repairs. 

According to Zemah, the building was designed with the most environmentally friendly technology available today in order to lower these monthly maintenance fees. Features include Israeli water-saving technology; pneumatic waste collection to maximize recycling; blinds and shading designed for the local climate to reduce air-conditioning use; windows and glazing to optimize light within the building; and locally sourced building materials to reduce the impact of transportation.  

Upon completion, the sleek-looking, white Modernist tower will stand 590 feet tall. In a nod to his architectural predecessors best known for the functionality and minimalism inherent in their Bauhaus signatures, Meier’s goal was to use the natural light and create a seamless integration with the surroundings. Although one could hardly say that this chic, white tower will even remotely resemble the block buildings at its feet, it will certainly be an impressive icon in the city’s skyline — one that symbolizes the future and celebrates how far this municipality has come since its turbulent beginnings.

Although this is Meier’s first project in Israel, he notes that he has been fascinated by Israel since his first visit to the country 50 years ago. 

“At this point in my life, to be able to give something to this extraordinary city, Tel Aviv, this unique building and wonderful place to live, is the fulfillment of a lifetime dream,” he says. 

Perhaps its most attractive feature, however, is the stunning perspective it will provide to residents. At the edge of a model terrace replete with wooden floors and glass walls to enhance visibility, Zemah notes that even from the seventh floor, the building has spectacular views. 

In the distance, the Mediterranean forms a subtle, azure line between the city’s relatively low skyline and the clear, blue air. Less than 10 minutes away by foot lies the charming neighborhood of Neve Tzedek, the Habima national theater and opera house, Charles Clore Park and a slew of art galleries, open-terraced cafes, restaurants offices, banks, stores and shops. From this height, one can also clearly see the city’s first skyscraper, Shalom Tower, as well as the handful of other towers that rise along the horizon. 

“If you compare it to New York, it’s like being on 59th and Fifth streets,” Zemah says with satisfaction. 

For those who see this tower as another eyesore against the city’s largely low buildings, it is far too late to stop construction now. And for those who can afford it — and the trend shows that many Israelis who can are rapidly making central Tel Aviv their home — these apartments will doubtlessly be akin to living in a museum. 

Don’t launch a startup till you play this game


Starting a company can sometimes be likened to a game of chance. Coming up with the right idea at the right time, when the market is neither saturated nor in financial free-fall, isn’t always under the business owner’s control, no matter how crack the team.

Ronen Gafni aims to enable entrepreneurs to surmount the vicissitudes of chance by turning the startup game into a real board game. FreshBiz is the result of eight years of development by Gafni, an entrepreneur who is taking his biggest gamble yet with a product that looks like the fabled Game of Life, but is far more practical.

FreshBiz players move through various business stages, from starting a new company to trading on the stock market. Dice throws and “business opportunity” cards help them advance toward the winner’s slot.

Instead of earning $200 by passing Go, players pay “toll passages” along the way. And you have only 90 minutes to do it. The game aims to simulate the world of business and to improve business behavior and industry acumen.

Unlike typical board games, competition is secondary to collaboration. “There can be more than one winner,” Gafni explained. “So it’s not about beating other people. It’s about finding creative ways to make enough money to get to the winner’s block. And if you collaborate, the chances are higher that everyone is going to get there.”

As players move around the board, they can start new businesses whenever they land on an empty lot. It may cost $2 million to open a business, but if you pay attention, you may have the opportunity to start a company for half price — if you find a partner. Similarly, you may be able to trade stocks more profitably if you team up with someone else.

Game translates across cultures

Sounds like you’d need an MBA to succeed in FreshBiz, but Gafni insists that “you’ll pick it up very fast. From the second game on, you’ll be more creative about how you play.”

You can buy the physical game for $50 or download an iPad version of FreshBiz for $7 so you can play against a maximum of four players in your living room or on the Web. But perhaps the best way is to join a FreshBiz workshop.

This is what Gafni has been doing for the last 18 months — running tests with real people around the world, to see how the game works and whether cultural differences matter. He has 30 facilitators (each person pays $700 to buy a kit, after which he or she can run as many workshops as desired) and has played the game in Israel, New York, Spain and Singapore; at banks and financial firms; and with professors and MBA graduates at New York University’s entrepreneurship program.

FreshBiz

Perhaps surprisingly, there are very few differences in game play across cultures. That’s because “it’s a game about our core beliefs,” Gafni said. “It doesn’t matter if you’re in India or Italy; we all go through the same experiences. In Israel, people might scream more, while in Europe the game might be quieter. But our insights are very much the same.”

Where is Gafni’s favorite place to play FreshBiz? “Madrid,” he said. “I don’t know Spanish, but I can see how the game is going by the movements made by these top executives.”

The game has, so far, been translated into Spanish, Russian and Hebrew, in addition to English, of course. Gafni estimates 3,000 people have played the game already in more than 100 sessions.

Tel Aviv ‘world tour’

FreshBiz officially hit Israel in July, when Gafni held a workshop with 200 entrepreneurs and business owners at the ZOA building in Tel Aviv.

The cost to join a FreshBiz workshop varies depending on the length, from NIS (new Israeli shekel) 150 (about $38) for a short session, up to NIS 2,000 (a little more than $500) for a whole weekend per person. Gafni hopes that organizations will pick up the tab for their top team members.

A workshop can include anywhere from 20 to 150 players. The facilitator does some lecturing with an overhead projector, but it’s mostly about sitting (or jumping) around the board.

Gafni’s goal is to have 1 million FreshBiz’ers in three years. The iPad app is key, he says, and it will comprise more than just the game. “There will be an entire community for entrepreneurial thinkers, where they can share knowledge and opportunities. They can create events and parties” outside of the digital realm.

His own entrepreneurial path started when he began trading stocks while serving in the Israel Defense Forces. He built a stock portfolio worth hundreds of thousands of shekels until the global financial meltdown. “It was a heavy blow for a young guy like me who was just getting started,” Gafni said. “But it also taught me the philosophy of recovery from a financial crisis.”

He and his wife later worked together in their own marketing consulting and branding company, where he saw “so many owners are stuck playing an old game of life and business. The world is changing around them, with technology, the economy, globalization, society — it’s not the same as it used to be — but they don’t know how to adapt themselves to this new game.”

Gafni, 39, was inspired to create FreshBiz after he realized the new world of business looked nothing like the landscape his parents knew. “They both worked in a bank for 30 years and then got their pensions,” he said. “I knew from the age of 10 that I wouldn’t do that. Knowing how much I’ll earn at the end of the month is boring. It’s cooler not knowing!”

Rami Levy: Israel’s new grocery store king


The corporate offices of Rami Levy, Israel’s nouveau riche supermarket mogul, sit atop one of his grocery stores in southern Jerusalem. It’s not a busy neighborhood, nor is it easily accessible by public transit. But once the building comes into view, there’s no mistaking that it’s his.

Plastered across the side wall in bold letters on a yellow background are the words Rami Levy Hashikma Market. The company name appears at least six more times elsewhere on the building.

Meet the new Israeli mogul – with a net worth about $1 billion, according to Haaretz – whom many Jews outside Israel do not yet recognize, but who is emerging as a champion of the country’s economically struggling families.

Levy, 57, is the owner of the third largest grocery store chain in Israel, with 24 stores across the country en route to the goal of 50. Other competitors have much larger chains, but Levy has gained attention in part by cultivating the persona of a poor boy who made good and now is passing along the benefits to his customers. The benefits include sales and special deals for Jewish holidays, like low prices on matzah for Passover.

Last week, as the cost of bread in Israel rose 6 1/2 percent, Levy’s stores said they would not raise their prices until after Sukkot. Levy’s larger competitors will raise their bread prices after Rosh Hashanah, according to Israeli reports.

“I want the consumer to be happy,” said Levy, a man of few words who sticks to his message. “You want to kill two birds with one stone—to do business so that it’ll be good for the consumer.”

Levy grew up in the crowded Jerusalem neighborhood of Nachlaot, near the open market of Mahane Yehuda. He decided to open his first store when he witnessed a nasty interaction between his grandmother and a shop owner there during one of his furloughs from the Israeli army.

“He didn’t talk to her nicely and it troubled her,” Levy said. He thought, “I’ll get out of the army and I’ll open a store.”

His grandfather owned a small warehouse down the block from the shop owner, on Hashikma Street, a side road in the market that would give his chain its name. In 1977, Levy cleaned, painted and converted the warehouse into a grocery store. He attracted customers by selling food at the same price as his wholesalers.

After three months he connected directly with the companies that supplied his wholesalers and began to buy directly from them, which allowed him to turn a small profit and later to expand his chain.

Levy has since launched an insurance company and a cell phone provider, both of which bear his name. The Israeli business publication Calcalist reported two weeks ago that Levy’s cell phone provider now serves 66,000 customers, compared to several recently launched providers with more than 100,000 customers.

Below his corporate office, attached to the store, customers can also eat at Hashikma Pizza or Hashikma Burger. Levy said he would enter any industry “where I can do well for my customers, sell at low prices and make sure my customers can have good service.”

Customers at the store said they shop there for the low prices, but some other potential buyers prefer the supermarket across the street—a branch of the larger Super-Sal chain. They said they chose to forgo Levy’s deals because his shops are too crowded.

“He wants every meter,” said Moshe Zaken, 29. “You can’t turn the corner. You bump into people.”

Store owners on Hashikma Street, where he began, say he hasn’t changed from the days when they knew him as a friendly and generous grocer.

“He was a nice guy, a regular guy,” said Aviezer Zaken (no relation to Moshe), who runs a fish and poultry shop that like Levy’s chain is named for its owner. “We didn’t expect him to become a billionaire.”

Like a few others, Aviezer Zaken attributed Levy’s success to “the blessing of God. Just the blessing of God.”

Shop owners recalled that although Levy gave free matzah to needy people before Passover, he never gave himself a break.

“What free time? He worked 24 hours a day,” said Yaakov Gazit, who used to own a Turkish restaurant on the corner of Hashikma, near Levy’s store.

Even so, Gazit remembered a night years ago when he was stuck on the other side of Jerusalem with a flat tire and Levy came to assist him at 3 a.m.

“You’re stuck, so I’m helping you,” Gazit recalled Levy saying after Gazit had called for help.

Levy still maintains a storefront on Hashikma whose sign offers food for “cheaper than cheap.” Shop owners there say he comes by every few months, but the interior of the store is empty and some shelves need repairs. Passers-by said it hardly ever opens. The number advertised on the sign does not take incoming calls.

Whether or not God’s hand is guiding Levy’s success, religiously themed pictures of Jerusalem hang in his office and Levy has remained Sabbath observant. Beyond the time he spends that day with his family, his wife—whom he calls “my right hand”—and three of his four children, all adults, work for him. He also has three grandchildren.

“There’s less time one on one because everyone is busy, but we see each other during the day,” he said.

While Levy focuses on his business, he also has become entangled in political controversy. After his West Bank locations in Sha’ar Binyamin and Mishor Adumim began attracting Palestinian customers due to their low prices, the Palestinian Authority discouraged Palestinians from buying there. The PA claimed that patronizing the stores helped the economy of Israel’s settlements, according to The Jerusalem Post.

Still, Levy said, “The people kept buying. I serve my customers regardless of race or nationality.”

He also doesn’t discriminate between Jews and Palestinians when hiring.

“We have a lot of Jews in the Diaspora,” Levy said, so he hopes his hiring practices will prevent people from outside Israel saying to prospective employees, “You are a Jew; I won’t hire you.”

After he expands to 50 stores, Levy said he will have to stop because any additional branches would make his current cost structure unsustainable. Although he “can’t serve all of Israel,” he said he likes to see the larger chains imitate his tactics.

“The moment you blaze a trail and your trail does well for people, and your competitors are doing the same thing, I’m happy,” he said.

Perhaps the opening day of the 50th store will be when Levy takes respite from his never-ending work. What will he do then?

Levy is not talking about retiring, but his former colleague, Aviezer Zaken, said, “He’ll sit on the beach and fish.”

Lauder to acquire control of Israeli news Web site


Ronald Lauder is expected to acquire complete control of an Israeli news Web site and has plans to establish a new English-language Web site about Israel.

The American businessman and philanthropist’s company JCS, which operates Jerusalem Capital Studios, has finalized a deal to acquire Nana 10, Haaretz reported. Lauder currently owns 24 percent of Nana 10, which features news from Israel’s Channel 10 and reportedly is the fourth most popular Hebrew language Web site in Israel.

Haaretz also reported that Lauder, who is president of the World Jewish Congress, has plans to establish, with other American Jewish businesspeople, a new Web site in English to present Israel’s position to Jews around the world.

Israel cited in Caterpillar’s delisting from influential investment index


The sale of Caterpillar tractors to Israel was a factor, but not the determining one, in the delisting of the company from an influential index that prioritizes good governance and human rights.The move, however, is poised to further complicate the difficult ongoing conversation about Israel taking place between American Jewish gruops and the Presbyterian Church (USA).

A senior official at MSCI-ESG, a subdivision of MSCI, Morgan Stanley’s investment advice arm, said Caterpillar already had a low rating before its delisting earlier this year, in part because of its association with the Israeli army’s use of the tractors in the West Bank and past use in the Gaza Strip. The role of Israel’s use of the tractors in the decision also suggests that a sustained campaign by pro-Palestinian groups has had some effect, although officials at MSGI-ESG and one of its clients, the TIAA-CREF pension fund, deny succumbing to direct pressure.

TIAA-CREF’s divestiture amounted to $72 million in funds, dwarfing previous divestitures by liberal religious groups such as Friends Fiduciary, a Quaker group that divested $900,000.

The news of the delisting comes ahead of the biennial general assembly of the Presbyterian Church (USA), where divestment from Caterpillar and other companies selling products used by the Israeli army, will be considered.

Ethan Felson, the assistant executive director for the Jewish Council for Public Affairs, and the Jewish community’s lead official in countering the boycott, divestment and sanctions movement aimed at Israel—known as BDS, said that news of the MSCI-ESG decision would cause “damage” just ahead of the Presbyterian colloquy.

He said that linking Caterpillar to Israeli practices was “nonsensical,” noting that it had no say in how the U.S. military resells the tractors, and that it could not legally turn down the U.S. military as a client.

The MSGI-ESG official told JTA on Friday that what drove Caterpillar off the index was the company’s decision in February to shutter a London, Ont. plant after a high-profile dispute with employees. However, the official acknowledged several factors played into it, including the association of CAT with Israeli army practices in the occupied territories.

The death in 2003 of Rachel Corrie, an American pro-Palestinian activist, while she was protesting such a demolition in Gaza, helped spur the BDS movement forward. Corrie’s parents and witnesses say she was caught beneath an armored tractor.  The army denies fault and maintains she was killed by debris.

MSCI-ESG – ESG stands for Environment, Social or Governance – has as its clients a number of progressive groups that base their investments in part on social justice issues, including care for the environment, the treatment and safety of employees, and involvement in human rights abuses.

MSCI-ESG’s decision, made in February and effective as of March 1, came to light this week because of claims by groups associated with the BDS movement that a decision by TIAA-CREF – a pension fund for teachers and other academics – to divest from Caterpillar was a result of their pressure.

“It’s long past time that TIAA-CREF began living up to its motto of ‘Financial Services for the Greater Good’ when it comes to the people of Israel and Palestine,” Rabbi Alissa Wise, the national coordinator for “We Divest,” a coalition of several groups, including Jewish Voice for Peace, where Wise is director of campaigns.

Caterpillar, in a statement released to Jewish groups, once again denied direct sales to Israel of the D-9 Track-Type tractors.

“This is how it works,” corporate spokesman Jim Dugan said. “Caterpillar sells equipment to the U.S. government, which then transfers the equipment to the Israeli government, which then transfers it to the Israeli military.  Israeli is one of about 150 countries that take part in the program, which supports U.S. allies. For the D9s, the protective armor plating, the bullet resistant glass and other modifications take place after the machine has been transferred to the Israeli government by the U.S. government.  These changes happen after the sale, not in our factories. We hope and wish for a peaceful resolution to the unrest in the Middle East, but that solution is a political matter to be worked out by the appropriate parties.  Caterpillar does not and should not have a role in that political process.”

The Jewish Federations of America’s Israel Action Network derided the haste with which pro-BDS groups claimed credit for the divestment.

“Pro-BDS groups have constructed the ‘Caterpillar Myth’ that insinuates a conflict between the machine and the Palestinian people,” Geri Palast, IAN’s managing director said in a statement. “It is designed to invoke dystopian images, link BDS to specific Israeli policies and appeal to fear.”

Officials of TIAA-CREF, however, denied such pressure was a factor and pointed JTA to established policy that devolves such decisions to its “social screen vendor,” in this case, MSCI-ESG.

And while the MSCI-ESG official, who spoke on background, affirmed that Israel’s use of the tractors was one of several factors in the decision, he also said that an established methodology determines which company is listed and which is not, and that decisions are not based on representations from interest groups. The official’s emphasis suggested that shuttering the Canadian factory had greater weight than Israel’s use of the tractors.

Rebecca Vilkomerson, the Jewish Voice for Peace spokswoman said she was “confident” that representations by the We Divest coalition and other groups both to MSCI-ESG and to TIAA-CREF played a role.

In any case, she said, activism by groups such as hers has resulted in a “consensus in the human rights community because of its role in human rights abuses in Palestine, Caterpillar is not an ethical actor.”

Pro-Palestinian groups have for a decade campaigned against the sale of the tractors to Israel. Caterpillar sells the tractors to the U.S. military for resale to allies. Caterpillar says it does not determine to which countries the tractors are resold and how they are refitted for military use.

The pro-Palestinian groups, backed by a number of human rights NGOs, say that Israel uses the tractors to destroy Palestinian homes as a means of inhibiting growth and as collective punishment. Israel says the tractors are used to destroy illegal structures, and in Gaza were used until 2005, when Israel pulled out, to destroy tunnels used by terrorists for smuggling purposes.

From start-up nation to ‘scale-up’ nation


Most are accustomed to calling Israel a “start-up nation,” following the 2009 book by Dan Senor and Saul Singer titled as such. Jonathan Medved, however, is focused on the possibility of a “scale-up” nation.

“The next step is to scale up from start-ups to big global companies…to grow Israel’s companies is by focusing on solving big global problems,” says Medved, CEO of mobile software platform provider Vringo, Inc.

Medved—one of Israel’s leading serial entrepreneurs and venture capitalists, who made aliyah in the 1990s and now lives in Jerusalem—spoke to the Israel Business Forum at a gathering high above Times Square in New York City earlier this month.

In Israel, he says, “The culture of risk, of immigrants, of informality, the discipline of the army, even tolerance for failure, creates an unprecedented, unequaled atmosphere. The world is starting to understand that Israel is the place to come to—outside of Silicon Valley—for technical start-ups.” Israel provides a “dense” center for innovation, according to Medved, who called the country “start-up central.”

Medved’s story is iconic in the world of high tech. Starting by working out of a garage in Jerusalem, this entrepreneur has co-founded more than 60 Israeli high-tech firms. He writes about Israeli technological developments and is a member of the board of Israel21c.  He speaks about Israel’s technological and economic contributions to America and the world in venues as diverse as AIPAC (American Israel Public Affairs Committee), CUFI (Christians United For Israel), and numerous industry conferences.

Noting “this bedrock of warmth and support” and “unshakable” alliance between Israel and America, Medved says the two nations are “incredibly productive and dynamic countries that lead the world in innovation and in technology.”

Medved says that when people are asked about how often they touch Israeli technology, some scratch their heads and say, “I don’t do much with Israeli technology.”

Wrong, says the Vringo CEO.

“Each and every one of us is touching Israeli technology every single day, dozens of times—in computers, instant messages, cell phones, voice mail, flash memory,” Medved says. “Israeli innovation is making the world we live in exciting and dynamic and changing reality… This great alliance between [America and Israel] doesn’t get enough attention. That’s what I am talking about tonight.”

“There is no single major American high tech company—whether it’s Cisco or Broadcom or Microsoft or Google or anybody—who doesn’t do just enormous work in Israel,” he continues. “Samsung, the Korean operation, is now in Israel focused on sourcing Israeli technology.”

Innovation starts early in the lives of Israelis, as the Israel Defense Forces (IDF) instills values of competition and selectivity. “Our kids start competing before the end of high school—not to get into an Ivy League school but to get into, excuse the phrase, an Ivy League unit,” says Medved. After such special programs, “they’re ready for bear,” he says.

“Our army is very entrepreneurial—very much part of our strategic thinking,” Medved says.

Israel is creating jobs in America, Medved explains, citing companies such as Given Imaging in Georgia, Amdocs in Missouri and Netafim and Bright Source in California. Medved says virtually no American high-tech company is without an Israeli component. Microsoft just opened two new Israeli facilities, in Tel Aviv and Ra’anana.

The next step for Israel, Medved reiterates, is to “go from start-up nation to the scale-up nation.”

“Companies of size are being built In Israel,” he says. “I think it’s a great thing that we are selling these companies. [Sales] serve as a conduit for future purchases on the international market. 

Medved notes that Israeli-developed products are appearing in unexpected places. Zoran chips, for example, are in virtually every consumer electronics product, and more Americans are taking medication produced by Teva Pharmaceuticals than that of any other producer in the country. He also highlights “unrivaled” Israeli water technology, including the reverse osmosis process invented at Ben-Gurion University.

“By 2014,” says Medved, “all drinking water in Israel will come from the sea.”

Medved admits, however, that “there are storm clouds” and problems to solve, such as the education dilemma in Israel—increasing numbers of students but no increase in faculty, underfunded universities, and a continuing brain drain among the most crucial.

JointMedia News Service asked Medved about investors’ reactions to political upheaval in the Middle East, as well as the impact of the possibilities of war or terrorist activity in Israel and nearby. He suggests that investors are discounting these risks.

“In technology, most investors are not thinking about it,” he says. “What’s crazy is that Israelis live with this…it’s weird, though Israel is perceived as unsafe, tourism numbers are through the roof. We have to do what we have to do to build the country. Investment builds psychological resilience.”

“It’s a great time in Israel,” he concludes. “Tourism is booming, the economic crisis appears past.”

Israeli entrepreneurs are spending on social justice


Capitalism in pursuit of social justice.

The notion is becoming more common in Israel as a new generation of entrepreneurs and innovators in the fields of high-tech, industry and real estate is delving into philanthropy.

“The culture of venture capital and the start-up nation also transfers into innovation in the field of philanthropy,” Andres Spokoiny, president of the Jewish Funders Network, said in a telephone interview ahead of the Jewish Funders Network International Conference that was held here last week. “One of the goals of the conference is to foster networking among highly empowered, highly independent individuals.”

Cecile Blilious, who comes from the high-tech world, is a managing partner at Impact First Investments and one of the new philanthropists. Her company funds enterprises that are economically viable and have a positive social impact.

Blilious also helped found the Al-Bawader private equity fund, which invests exclusively in businesses in Arab-Israeli communities, and is a board member of Neurotech Solutions, which developed a test to screen for attention deficit hyperactivity disorder.

“This is a social business product that can be harnessed not just to make money but to make the world a better place,” Blilious said in an interview during a lunch break between sessions, “and it is coming out of Israel. That is the best hasbara [public relations] possible.”

Following a session titled “Developing a Social Capital Market in Israel,” Bank Hapoalim Chairman Yair Seroussi said in an interview that his bank spends about $13.4 million annually on philanthropic activities. They include sending a fleet of mobile libraries to poor neighborhoods, facilitating computer access in public schools and a nationwide program in which thousands of Bank Hapoalim employees volunteer every year to teach 11th-graders how to manage their personal finances.

“We are sensitive to what is happening in Israeli society, and we are reacting to it,” Seroussi said.

Particularly striking at the conference was the large contingent of Israeli entrepreneurs, venture capitalists and high-tech innovators focused on tikkun olam, repairing the world, using the same business know-how that got more than 60 Israeli companies listed on the Nasdaq — more than any country outside North America and China.

Chanoch Barkat, a former venture capitalist with Apax Partners Israel, is doing just that. His Dualis Social Venture Fund provides counseling and financing to a chain of five restaurants — two in Tel Aviv and one each in Ra’anana, Yahud and Beersheva — that employs high school dropouts.

In an interview, Barkat acknowledged the restaurants are not as profitable as other food establishments, but said they are self-sustaining. By teaching high-risk teenagers such basic business skills as punctuality and commitment, he said, the restaurants save the state millions of dollars in crime prevention, rehabilitation and welfare costs.

“I believe there is a growing opportunity for developing new models in the world of social change by adopting and implementing tools from the world of finance,” Barkat said.

Forbes magazine’s 2012 list of billionaires listed 13 Israelis, including Shari Arison, who owns a controlling share in Bank Hapoalim and Housing & Construction, one of Israel’s largest building firms; Nochi Dankner, who has holdings in some of Israel’s largest industries and financial institutions; and Idan Ofer, who owns the Zim shipping concern and has stakes in aviation, high-tech, private equity, real estate and media. All are members of a growing cadre of high-powered Israeli philanthropists.

Less prominent Israeli millionaires, who numbered more than 10,000 in 2010, according to a Merrill Lynch report, also are increasing their involvement in philanthropic pursuits.

Yet individuals and corporations in Israel still lag behind their counterparts in America. Israeli philanthropy constitutes about .74 percent of the GDP, compared to 2.1 percent in the United States, according to a recent study by Hillel Schmid, head of the Center for the Study of Philanthropy at the Hebrew University.

Schmid said that Israelis still tend to expect the state to solve social ills, while American philanthropists understand that one of the prices of smaller government is the need for more voluntary activity to fill the void. With Israelis paying higher taxes than Americans, serving in the Israel Defense Forces and doing reserve service, many believe they have “done enough” for their country, according to Schmid.

Corruption stories also have made Israelis suspicious of nonprofits, he added.

Also seen as dampening enthusiasm for Israeli philanthropy: The annual total for charitable donations eligible for a 35 percent tax deduction is a maximum of 4.5 million shekels ($1.2 million) a year. Plus, only some 4,000 of the country’s 30,000 nonprofits are recognized for tax-deduction purposes.

Despite the hurdles, Israeli philanthropy will continue to grow, predicts Ahuva Yanai, CEO of Matan — Investing in the Community.

“People are going to have to learn to cooperate and pool resources,” she said in an interview ahead of the conference. “And that means putting aside your ego, giving up control over every little aspect of the operation and not trying to reinvent the wheel.”

eBay to expand activity in Israel


eBay is expanding its activity in Israel.

The Internet consumer company said it will unite its two activity centers in Netanya and Tel Aviv into a development center, and will expand the center by recruiting computer engineers, industrial and management engineers, and information system engineers, Ynet reported Monday.

eBay employs more than 200 workers in Israel. The new Israeli development center will focus on building catalogues, creating information on products and developing tools for social commerce aimed at allowing collective purchases and sharing the buying process with other users, according to Ynet.

Last year eBay bought the Israeli startup The Gifts Project, which developed an application for online group gifting.

In addition to five development centers in the United States, eBay has centers in India and China.

Delta removes ‘Occupied’ from Palestinian Territories on destination list


Delta Airlines removed the phrase “Occupied Palestinian Territories” from its list of Middle East destinations.

The destination “Palestinian Territories” remained Wednesday after the airline reportedly received e-mailed and tweeted complaints.

Links to the site were quickly spread Tuesday via Jewish bloggers. The list of Middle East destinations also appeared on the partner sites for Delta, including car rental companies. As of Wednesday afternoon, all appeared to have been changed.

There are no operational airports in the West Bank or the Gaza Strip.

Last summer Delta was embroiled in another controversy involving the Middle East after a Delta spokesperson suggested that because Saudi Arabian Airlines was joining the SkyTeam Alliance, Delta might have to refuse boarding to passengers with Israel stamps on their passports. The Saudi government requires that travelers disclose their religion, and American Jews and others with Israeli stamps in their passports have been refused visas to the country.

At the time, the Delta spokesperson said that the airline “must comply with all applicable laws in every country it serves” because it would face fines if a passenger arrives at a destination without proper documents.

Report: Hadassah Medical Center can’t meet payments


The Hadassah Medical Center has not been able to pay its suppliers, an Israeli business daily has reported.

Hadassah’s debt to its suppliers is reportedly about $2.65 million, according to the Calcalist, a publication of Yediot Achronot.

The Hadassah Medical Center does not receive any Israeli government support, as it is owned by Hadassah, the Women’s Zionist Organization of America.

The Hadassah organization lost about $90 million in the Madoff Ponzi scheme. Following the Madoff affair, Hadassah cut its annual support to the hospital, according to Yediot Achronot.

Hadassah told Ynet that “unlike other hospitals, Hadassah does not receive any budgeting from the government or the State health system. This is a temporary setback in a minor portion of the payments due to the fact that Hadassah has not received all of its due payments from various parties.”

Israeli officials escalate war of words with N.Y. Times [UPDATE]


Israeli officials are stepping up their criticism of The New York Times, slamming columnist Thomas Friedman and arguing that the newspaper is an unfit venue for an Op-Ed from Prime Minister Benjamin Netanyahu.

In a scathing letter first leaked last week to The Jerusalem Post, Ron Dermer, a top aide to Netanyahu, declined an invitation for the prime minister to write an Op-Ed for the Times. By way of explanation, Dermer cited what he alleged was the newspaper’s anti-Israel tilt.

“It would seem as if the surest way to get an Op-Ed published in The New York Times these days, no matter how obscure the writer or the viewpoint, is to attack Israel,” he said.

Dermer’s letter came just days after Friedman, a frequent critic of Israeli settlement policies, asserted that U.S. congressional support for Netanyahu was “bought and paid for by the Israel lobby.”

Rep. Steve Rothman (D-N.J.), a top congressional appropriator, joined a chorus of commentators in decrying Friedman’s allegation. And Israel’s ambassador to Washington, Michael Oren, said Friedman had “strengthened a dangerous myth.”

“This allegation is profoundly disturbing,” Oren told JTA. “The term ‘Israel lobby’ implies the existence of a Zionist cabal wielding inordinate economic and political power. Unintentionally, perhaps, Friedman has strengthened a dangerous myth.”

The recent flaps are casting a light on the degree to which the Israeli government believes it has not been getting a fair shake from what is arguably the most influential newspaper in the world.

In September, in an editorial about the push for U.N. recognition of Palestinian statehood, the Times declared in an editorial that it put the “greater onus on Mr. Netanyahu” for the stalled Israeli-Palestinian talks, claiming he “has used any excuse to thwart peace efforts.” In another editorial a few days later, the newspaper accused Netanyahu of refusing “to make any compromises with the Palestinians.”

The Times published a response from Israeli Embassy spokesman Lior Weintraub in which the Israeli official noted that during his current tenure, Netanyahu has endorsed the idea of a Palestinian state, pushed for direct Israeli-Palestinian negotiations without pre-conditions, ordered the removal of hundreds of checkpoints and implemented an “unprecedented 10-month moratorium on new West Bank settlement construction.”

Netanyahu “offered to extend the moratorium for an additional three months if the Palestinians would return to the negotiating table. But they did not,” Weintraub continued, adding that in his May speech to Congress the prime minister said that “some settlements will end up beyond Israel’s borders” and pledged that the Jerusalem issue could be resolved “with creativity and with good will.”

Weintraub argued that “obscuring Mr. Netanyahu’s record in pursuing peace only emboldens the Palestinians to avoid direct negotiations with a genuinely willing and eager partner.”

Dermer in his letter suggested that ignoring Netanyahu’s outreach amounted to bad will. Times columnists, Dermer said, “consistently distort the positions of our government and ignore the steps it has taken to advance peace. They cavalierly defame our country by suggesting that marginal phenomena condemned by Prime Minister Netanyahu and virtually every Israeli official somehow reflects government policy or Israeli society as a whole.”

The letter has created a Washington buzz, with some officials with pro-Israel groups scratching their heads at the strategy. Off the record, they say they agree with Dermer’s assessment of the Times, but wonder at the wisdom of turning down an opportunity to appear on one of the most influential Op-Ed pages in the United States.

David Harris, the American Jewish Committee’s executive director, would not comment on the strategy, but said it was clear that the Times had a problem with Israel, noting some of the trends Dermer listed in his letter: The Friedman column and others critical of Israel by Nicholas Kristof; publishing, without adequate redress, an Op-Ed by Palestinian Authority President Mahmoud Abbas that blames Israel for rejecting two states in 1947, when it was the Arabs who rejected the U.N. partition plan; and a column suggesting that Israel’s gay rights advances were merely a function of a propaganda campaign to make Arabs seem backward.

“There has been a clear imbalance on the editorial and Op-Ed pages of The New York Times,” Harris said. “If the Times aspires to a balanced range of views on those pages, it needs to engage in some reflection.”

Friedman in his column listed reasons he believes American Jews like himself are growing uncomfortable with Israel: the closeness of the foreign minister, Avigdor Lieberman, to Russian autocrats and their anti-democratic leanings; the controversy about segregating women from men on buses that serve haredi Orthodox neighborhoods; a slate of laws seeking to limit the influence of human rights groups; and attacks by extremist settlers on Palestinians and the Israeli army.

“I sure hope that Israel’s prime minister, Benjamin Netanyahu, understands that the standing ovation he got in Congress this year was not for his politics,” Friedman wrote, referring to Netanyahu’s address to a joint session last May. “That ovation was bought and paid for by the Israel lobby.”

Friedman on Tuesday told The New York Jewish Week that “in retrospect I probably should have used a more precise term like ‘engineered’ by the Israel lobby—a term that does not suggest grand conspiracy theories that I don’t subscribe to.” Otherwise, Friedman added, he stood by the column.

In response to Friedman’s column, Rothman issued a statement saying that the characterization of the nature of congressional support for Netanyahu reinforced a “dangerous narrative” about supporters of a strong U.S.-Israel relationship.

“I gave Prime Minister Netanyahu a standing ovation not because of any nefarious lobby, but because it is in America’s vital national security interests to support the Jewish State of Israel and it is right for Congress to give a warm welcome to the leader of such a dear and essential ally,” Rothman said. “Mr. Friedman owes us all an apology.”

Dermer is among Netanyahu’s most influential advisers. He is an American immigrant whose late father, Jay Dermer, and brother, David, have both been Democratic mayors of Miami Beach.

Dermer became a Republican in adulthood, and the no-holds-barred political style he acquired from mentors such as Frank Luntz transitioned easily to Israel’s rough politics when he made aliyah in the mid-1990s. Netanyahu, who himself was raised partly in the United States, bonded with Dermer soon after they were introduced.

JTA Editor in Chief Ami Eden contributed to this report.

In their off hours, El Al flight crews are now ‘ambassadors’


A good flight crew requires a certain amount of charm to keep passengers calm during turbulence, emergencies or pretzel shortages.

Five El Al Airlines flight attendants and a pilot put those skills to the test Monday at Rutgers University in New Jersey as they fielded questions on their personal lives and on Israel from an audience of more than 100 for nearly two hours.

It was the opening event for the El Al Ambassadors program, an initiative to put El Al crews to use during their U.S. layover time to create a positive image of Israel in the United States. The idea is to counteract the negative images of Israel in the news with the personal stories and faces of El Al pilots and flight attendants.

“This is a unique opportunity for a Zionist company in the private sector to do something meaningful,” said Alon Futterman, the program’s director and emissary development director at the Jewish Agency for Israel. “You have real people. You have people with families. You have people with the same range of ages talking about real life.”

El Al partnered with the Israeli Foreign Ministry, the advocacy group StandWithUs and the Jewish Agency to select 60 El Al crew members from hundreds of volunteers to take part in the pilot program (no pun intended). The event at Rutgers, which boasts one of the largest populations of Jewish undergraduates in the country, was organized by members of the university’s Hillel.

Organizers say the El Al volunteers were chosen largely for their eloquence and English skills, but it did not escape the notice of students that the El Al delegation was unusually diverse: two gay men, a Druze Israeli, a woman who sidelines as an aerobics instructor and a pilot who also is a yoga teacher. The six also happened to be particularly attractive.

Futterman said El Al crews already have received 20 invitations to speak at events across the United States in 2012.

“We weren’t specifically looking for diversity, but it came out that way,” said Daniel Saadon, vice president of El Al’s North and Central America operations. He described the six participants as “the civilian wings of Israel.”

The Monday talk largely kept clear of the Israeli-Arab conflict. Questions ranged from what life is like for gay men in Israel—“We live a normal life. The nightlife is better than New York,” said flight attendant Kai Elias—to balancing a flying career with university studies to dealing with ear popping upon descent.

The crew members also discussed headier topics such as Israel’s changing society, the tent protests that sprung up in Israel over the summer and the changing role of Zionism. Crew member Yuval Vershavsky, a 34-year-old father of two, said Zionism is now about making Israel “a more just, liberal and secular country.”

One of the gay flight attendants, Gilad Greengold, said the only time he had felt the subject of discrimination in Israel was when he and his partner were denied an apartment lease after the landlady consulted with her rabbi.

“It’s not very common,” he said. “It’s just something we’ll have to deal with and change.”

Fares Saeb, a newly married Druze flight attendant, told JTA that the program was an opportunity to share a unique perspective.

“You talk to people from around the world and you get to see how they see Israel, how local press covers Israel,” he said. “They have a narrow perspective, and we have an opportunity to show something personal, private and human. You get a larger perspective from the air.”

El Al, struck by soaring fuel prices, to lay off 200


El Al Airlines said it is laying off 200 workers after a steep increase in fuel costs hit its bottom line.

Top executives also agreed to pay cuts, Reuters reported, after the airline announced a 51 percent drop in its third-quarter net profit.

Jet fuel prices rose by 47 percent, raising the airline’s jet fuel expenditure from $160 million to $205 million in the third quarter, the Israeli business daily Globes reported.

Buffett points the way


Warren E. Buffett is the second-richest person in the United States (after Microsoft’s Bill Gates), so when he purchased an Israeli-based stock not long ago, investors throughout the world sat up and took notice. What made it more newsworthy is that it was Buffett’s first major foray into overseas investing. Up to that point, he said he could always find good stocks here at home.

Then the Sage of Omaha’s company, Berkshire Hathaway, paid $4 billion for an 80 percent share of Iscar Metalworking, and he said at the time that he was looking for other low-priced jewels.

What drew him to Israel, Buffett said, was its brainpower.

“If you’re going to the Middle East to look for oil, you can skip Israel. If you’re looking for brains, look no further. Israel has shown that it has a disproportionate amount of brains and energy.”

For other investors looking to invest in Israel, but with perhaps not quite $4 billion to invest, there is a goodly variety of choices.

Israel’s economy actually has been doing well compared to those of many other countries, in part because the country did not have a credit bubble.

Andy Brown of Aberdeen Asset Management, which runs First Israel Fund, admits that inflation is something of a worry, but he argues that Israel’s “long-term fundamentals are strong. Israel has a young, growing, healthy population.”

Brown believes that a good time to invest in Israel is when political unrest has made stock prices a bargain. 

STOCK INDEX FUND

The Amidex35 Israel Mutual Fund consists of the 35 largest Israeli companies. It is a unique combination of stocks that trade on either the U.S. or Tel Aviv exchanges — the Tel Aviv Stock Exchange, the New York Stock Exchange, or Nasdaq (where smaller stocks trade).

Why “35”? Because 35 stocks have been found to provide 60 percent of the return of all Israeli stocks.

Why “Amidex”? It is a combination of a word for “friend” and “index.”

The fund is no-load (no sales charge), but if you sell within a year, there is a redemption fee.

Minimum first investment is $500, with $250 for follow-ups; for automatic investments, only $100.

For more information, call (888) 876-3566.

Amidex is setting up other index funds, such as the Cancer Innovations & Healthcare Fund.

Index funds over the years have done better than 70 percent or so of actively managed funds. In his book “What Works on Wall Street” (fourth edition, 2012), James P. O’Shaughnessy claims this is because index funds do not change their strategy. On the other hand, John Bogle, who started the Vanguard Group, attributes the success of index funds to their low expenses.

A CLOSED-END FUND

Unlike Amidex35, the First Israel Fund (ISL) does not issue new shares.

A limited number of shares trade among buyers and sellers. It is a “closed-end” fund, not an “open-end” one, such as Amidex35.

The advantage of this is that if shareholders decide to sell out, en masse, the fund does not have to raise cash to meet redemptions by selling its holdings, perhaps at hurtfully low prices.

The fund is not an index fund. The managers buy and sell Israeli stocks. It is a concentrated fund, with 75 percent of its assets in its top-10 holdings. The fund is overweight in information technology, particularly the stock Check Point Software. It is underweight in cyclical sectors, such as energy.

As with other closed-end funds, First Israel trades at a discount to its underlying value — right now, around 12 percent. Of course, shareholders may wind up selling their holdings at the same or a larger discount.

The fund trades on the New York Stock Exchange.

For more information, call (866) 839-5205.

First Israel Fund was launched in 1990 by Credit Suisse Asset Management, and it is headquartered in Philadelphia.

EXCHANGE-TRADED FUND

iShares Israel is an Exchange Traded Fund (ETF) — an index fund that trades as a stock. ETFs traditionally have very low expenses. In the case of this fund, expenses come in at 0.61 percent.

The fund follows an index called the Morgan Stanley Capped Investable Market Index. It was launched in March 2008.

iShares Israel holds 83 stocks but is tilted toward Teva Pharmaceuticals, which has 23 percent of its assets.

For more information, call (800) 474-2737.

INDIVIDUAL STOCKS

For investors interested in buying individual stocks, whether in Israel or elsewhere, Teva Pharmaceuticals may be a good bet. The Value Line Investment Survey rates its timeliness “above average,” and its analyst writes: “Despite the inevitable slowdown in the Copaxone franchise, we think Teva can still prosper in the years to come, assuming its growth strategy succeeds.” (Copaxone is a drug against multiple sclerosis.)

Amdocs Limited is rated average by Value Line, which writes that the stock “has decent 3- to 5-year appreciation potential.” The company provides information-system solutions.

Check Point Software is also rated average, and Value Line writes that the stock has “minimal appreciation potential out to 2016.”

Elbit Systems (defense electronics and electrical optical systems) “is a suitable choice for conservative, income-oriented investors with a long-term perspective.”

Ormat Technologies (alternative energy) is ranked below average in timeliness, but the stock, writes Value Line, may “appeal to patient investors looking for less risky (nonsolar) exposure to the alternative energy sector.”

Israel Bonds now available online


Israel Bonds, which many synagogues pitch during the High Holidays, can now be purchased online.

The Development Corporation for Israel/State of Israel Bonds has launched an e-commerce site that its board chairman, Richard Hirsch, lauded for its functionality and expediency.

“Supporting Israel by investing in Israel Bonds has never been easier,” Hirsch said in Tuesday’s announcement of the site.

The site also can generate gift cards.

Presbyterians to reconsider divestment from companies in Israel


A decision by a group within the Presbyterian Church USA to reintroduce a resolution calling for divestment from companies doing business with Israel is reopening a long-running controversy over the church’s positions on Israel.

The church’s Committee on Mission Responsibility Through Investment released a report Sept. 9 arguing that the general assembly of the Presbyterian Church divest from Motorola, Hewlett-Packard and Caterpillar.

“The General Assembly asked us to do everything we could to bring about change through dialogue,” said committee chair the Rev. Brian Ellison, a pastor from Kansas City, Mo., in a statement. “Today we are sadly reporting that these efforts have not produced any substantive change in company policies or practices, and that there is little reason for hope they will do so in the future. According to the Assembly’s prior directives and the church’s ordinary engagement process, we have little choice but to recommend divestment.”

The report already has sparked intense debate within the church and is likely to make more waves when it is introduced at the next biennial general assembly in July.

“There will be vigorous debate on this,” Susan Andrews, the general presbyter of the Hudson Valley, in New York, told JTA. “The church has been split on this for years.”

The call for divestment also has provoked angry reaction from some Jewish groups. The American Jewish Committee and the Anti-Defamation League issued statements condemning the recommendation.

“This renewed effort by some within the Presbyterian Church to penalize Israel does not advance peace,” said Rabbi Noam Marans, AJC’s director of intergroup and interreligious relations. “On the contrary, threatening divestment undermines those who are truly committed to Israeli-Palestinian peace.”

An organization called Presbyterians for Middle East Peace released a statement condemning the report’s authors as giving a “friendly ear” to “a small group of activists within the Presbyterian Church that has relentlessly sought to punish Israel” and want “to find one party at fault in a conflict where all parties have engaged in positive or negative actions.”

Pastor John Wimberly of the Western Presbyterian Church and a co-convener of Presbyterians for Middle East Peace told JTA that the measure was unlikely to be adopted. He cited polls that show a gap between “specialized clergy”—clergy without pulpits—and other groups within the church, with the former more likely to support Israeli withdrawal from West Bank and eastern Jerusalem and less likely to support strong U.S.-Israel ties and relations between Jews and Presbyterians.

In a statement, Presbyterians for Middle East Peace promised to fight the report from being adopted.

“The general assembly would have to go against the opinion of the majority of Presbyterians,” Wimberly said. “It will be a struggle; they are determined although a very small group. We just have to make sure this small group can’t do something very big.”

In 2006, the church replaced a 2004 policy that called for “phased selective divestment” from multinational corporations operating in Israel with one that called for investment in Israel, the Gaza Strip, eastern Jerusalem and the West Bank “in only peaceful pursuits.” In 2008, the church’s general assembly instructed Presbyterians to avoid over-identifying with one side on the Israel-Palestine conflict.

Tel Aviv Stock Exchange plunges on U.S. credit downgrade


The Tel Aviv Stock Market experienced its largest one-day loss in nearly three years in reaction to the downgrade of the U.S. credit rating.

The exchange’s TA-25 benchmark index of 25 stocks fell 7 percent on Sunday to 1,074.27—the biggest drop since November 2008 at the beginning of the global economic crisis—despite a delayed opening by nearly an hour to allow traders to react to the news on the U.S. downgrade without pressure.

Standard & Poor’s on Aug. 5 downgraded the U.S. credit rating from AAA, the top designation it had held since 1941, to AA+.  The downgrade is likely to result in steeper interest costs on U.S. government bonds, eventually leading to less disposable income.

Analysts reportedly believe that Saturday night’s massive protests throughout Israel against the high cost of living also contributed to the plunge, Haaretz reported.

Since the Tel Aviv Stock Exchange operates Sunday through Thursday, it was one of the first stock exchanges worldwide to react to the U.S. credit rating downgrade.

Australian lawmakers support Israeli business


Australia’s foreign minister joined a Jewish legislator inside an Israeli business that was a target of a boycott call by pro-Palestinian activists.

Foreign Minster Kevin Rudd was invited by Michael Danby, a Labor government lawmaker, to Max Brenner’s chocolate shop in downtown Melbourne on Thursday in what Danby described as “symbolic act” of solidarity with Israel and the local Jewish community.

Three policemen were injured during the July 1 demonstration against the Brenner store, part of an Israeli chain. Nineteen protesters were arrested.

Organizers said they had targeted Max Brenner because its Israeli parent company, the Strauss Group, engaged in “ongoing ethnic cleansing” by supporting the Israel Defense Forces. Strauss provides care packages and sports equipment to the IDF’s Golani and Givati brigades.

Danby, the new chair of Australia’s Foreign Affairs, Defense and Trade Committee, said Rudd was “shocked at the historical precedent of the protests against Israeli and Jewish shops.”

Rudd, who stepped down last year as prime minister, said, “I don’t think in 21st-century Australia there is a place for the attempted boycott of a Jewish business.” He added: “I thought we had learned that from history.”

Olmert denies accepting cash from U.S. businessman Morris Talansky


Former Israeli Prime Minister Ehud Olmert in testimony at his corruption trial denied accepting envelopes full of cash from American businessman Morris Talansky.

As his multi-day testimony in Jerusalem Municipal Court moved to the Talansky affair, Olmert said Thursday that Talansky’s testimony was made up of “fantasies,” and that no cash was involved in Talansky’s campaign contributions and personal donations. He also said the rumors that Talansky lent him money were false.

Talansky allegedly gave Olmert envelopes containing thousands of dollars in cash over a period of several years. Talansky testified that Olmert would only accept cash donations.

Making his first comments on the Talansky case in court, Olmert said he received money from Talansky in the form of political donations for his campaign, refunds for hotel expenses when he spoke at events organized by Talansky and $40,000 for legal expenses in 1996.

Olmert is on trial in three cases: for allegedly paying for family vacations by double billing Jewish organizations through the Rishon Tours travel agency; for allegedly accepting envelopes full of cash from Talansky; and for allegedly granting personal favors to attorney Uri Messer when he served as trade minister in the Investment Center case.

The ex-Israeli leader is charged with fraud, breach of trust, falsifying corporate records and tax evasion.

Olmert is the first former Israeli prime minister to stand trial. He resigned as prime minister in September 2008 after police investigators recommended that he be indicted.

A 15-year plan for Israel


At its 60th anniversary, Israel needs a new vision that not only will guide its priorities and inform its actions, but also will be relevant to the lives of all Israelis.

This is why the ISRAEL 15 Vision, a Reut Institute plan that calls for Israel to become one of the 15 most developed nations within 15 years, is so compelling. It requires improving the quality of life of all citizens.

Quality of life is a very elusive issue. Its definition changes by geography. The quality of life of a religious and spiritual person is different from that of a secular businessperson.

Notwithstanding, quality of life is also visible and tangible. For example, anyone can tell that the average quality of life in countries like Canada or Australia is higher than in Greece or Spain. Furthermore, although income per capita is an important factor determining life, other public goods such as health, education, employment and social cohesion play a critical role as well.

Israel’s growth of recent years can be intoxicating. However, we often tend to forget that the world economy has experienced significant growth as well in recent years. Hence, impressive rates of growth notwithstanding, Israel didn’t succeed in leapfrogging — catching up with the leading nations of the world.

In contrast, during the first 20 years of the state, Israel’s economy bounced upwards. Israel doubled its well-being relative to the United States, starting with an average income of 30 percent of the U.S. average and reaching 60 percent by the early 1970s. Since then, however, Israel has not been able to bridge the gaps with the richer countries while countries such as Ireland, Singapore and South Korea have made leaps ahead.

The importance of closing the gaps with the richest nations stems from the mobility of people, technology and investment. As these highly mobile resources “choose” which country to go to, nations compete for them. Success in this fierce battle is essential for the future of any country, but is critical for the survival of Israel.

Israel suffers from the largest gap between the level of talent of its population and the quality of life offered its residents. Israel is ranked 28th in the world in quality of life, yet our population is among the most educated and technologically savvy in the world. Indeed, Israel is a leading exporter of talent, with one of the highest levels of brain drain among developed nations.

Becoming one of the 15 leading nations — roughly at the level of Holland, Singapore or New Zealand — requires leapfrogging our socioeconomic performance and growing at an annual pace of 7 percent to 8 percent for at least 10 years. This is a national challenge that will require widespread mobilization of the key sectors of society.

The phenomenon of leapfrogging is different than growth. While the world has established a recipe for stability and growth in the form of a set of accepted principles known as the Washington Consensus, which primarily calls for fiscal and monetary discipline and privatization, there is no such recipe for leapfrogging. In other words, each country charts its own path.

However, the common denominator among the countries that have leaped ahead has been their agenda. They all established an ambitious vision, identified growth engines and exhausted them, benchmarked their performance to other countries, improved the capacity of their government to make decisions and implement them, enhanced collaboration among key sectors of society and invested in human capital.

In addition, nations that leaped ahead contained their unique challenge and tapped into their individual potential. For example, Singapore understood that it was located at a junction between East and West and therefore developed the world’s leading airport, seaport and airline, while Ireland tapped the benefits of its inclusion into the European Union.

We also know that leapfrog happens as a consequence of a combination between top-down leadership by the government and bottom-up mobilization of the key sectors of society. Hence, on the one hand, reforming Israeli governance is key since it is significantly underperforming compared to our business sector.

At the same time, we have to find ways to harness mayors and local governments, businesspeople, philanthropists, nonprofits and world Jewry to the ISRAEL 15 Vision and create the space that allows them to make contributions, as well.

Finally, growth and development have to turn into a national obsession. We have had such passions in the past: greening the desert, redeeming the land or immigration absorption. The challenge for the ISRAEL 15 Vision is to become a household phrase and a framework that inspires for action.

The ISRAEL 15 Vision might be ambitious but it is attainable. Israel already is a world leader in key areas such as research and development, human capital or technology. We have outperformed expectations in the past. There is no reason we cannot do it again.

Gidi Grinstein is the founder and president of the Reut Institute. This article is based on a speech he gave at the 2008 Herzliya Conference.

Art With A Twist — It Inflates!


He didn’t know it at the time, but when Doron Gazit discovered twisty balloons while working as a camp counselor at a Jewish summer camp in Texas, it was the start of something big.

Most Americans know the twisty as the elongated latex balloons used to make poodle-like dogs or hats for children at fairs, circuses and birthday parties, but for an Israeli like Gazit, the twisty was something entirely new. He brought back as many as he could to Israel and began selling them on Jerusalem’s Ben Yehuda Street. He would soon begin huffing and puffing his way to bigger and better things.

The twisties served as his inspiration for creating artwork out of large colorful air tubes made from a stronger plastic and supporting them with heavy duty high pressure blowers. Today, he produces tunnels, canopies and decorations galore using the tubes and highlights, air sculptures that inflate to specific shapes.

Gazit ended up in Los Angeles when he was hired to decorate the 1984 Summer Olympic Games. He soon set up Air Dimensional Design in Burbank, decorating everything from bar mitzvahs to restaurant openings to awards shows.Air tubes have blown Gazit and Air Dimensional Design around the world, too. Since the 1984 Olympic Games, the company has decorated venues as varied as Osaka’s Kansai Airport, the Long Beach Convention Center and a salt lake in Mexicali.

Despite its grandiose possibilities, Gazit emphasizes that air tubes and highlights aren’t just for big-budget corporate events and can be used in any environment, he says.

“What can be done with colorful inflatables is like magic,” he said. “There’s no other medium with which you can create big designs so quickly and inexpensively.” — Lisa Hirschmann, Contributing Writer

The Road to Recovery


When you think of victims of Middle East unrest, tour guides are probably not the first to come to mind. But Amir Orly knows of two who committed suicide in the last couple years. Others have left the country or taken odd jobs — anything to make ends meet.

Business for tour guides in Israel collapsed in 2000, amid the violence of the second intifada, which between 2000 and 2005 took the lives of about 1,000 Israelis and more than 3,000 Palestinians. About 50 foreign citizens also died, but mostly, they have just stayed away.

“It was at least a 90 percent drop-off of tourists,” Orly said. “There was no hope. A friend of one of my friends became a gardener. Some turned to become teachers. Each person found his own way, but a lot went unemployed. People were going all directions.”

As our van of visiting American journalists hurtled down Highway 443 between Jerusalem and Tel Aviv, I wondered: Did the skittish tourists more or less have it right? If people are going to be shooting at you or trying to blow you up, what’s so bad about diverting to the Magic Kingdom instead — at least until the bombers get inside Tomorrowland, too?

Orly, a fit, handsome man in his 50s, was better off than many. The Ministry of Tourism’s favorite son, he often gets called when VIPs need care — including the Dalai Lama and William Shatner — he’s that good. Even so, he said, “there were many months where I would not work even once.”

He took advantage of being suddenly “rich with time,” as he put it, teaching and pursuing his doctorate (on the sanctification of Jerusalem) — and relying on his wife’s salary to get the family through.

Any downturn of visitors matters deeply for Israel, because tourism is the nation’s second leading industry behind high-tech. A healthy economy and anything less than double-digit unemployment is indefinitely out of reach without healthy tourism. Which is why the Ministry of Tourism provided Orly’s services recently to this group of journalists from U.S. Jewish newspapers visiting Israel for a week. The government wants the word spread that Israel is back — once again ready for its close-up. After all, they insist, there’s still lots to see, and Israel needs your tourist dollars. (That last point, of course, is the tribal appeal to duty and solidarity.)

Community Briefs


After 22 years as head rabbi of Shaarey Zedek Congregation in Valley Village, Rabbi Aron Tendler resigned last weekend.

“It is with mixed emotions that I write you today to let you know of my decision that, after 22 wonderful years, I have decided to step down as rabbi of Shaarey Zedek,” Tendler wrote in a letter to the 400-member families of the Orthodox synagogue.

“This has been a decision I have contemplated for some time, and after great soul searching and deliberation and with the full support of Esther and the family, I decided that it was time to explore other opportunities and embark on a new aspect of my personal and professional life.”

Tendler wrote that he intends to stay in the community but wants to spend more time with his family and pursuing writing, teaching and other projects.

“On occasion, I would like to sleep for more than four hours. Selfishly put, I want more time, and if not now when?” he wrote. Tendler will stay on through the High Holidays and help the search committee in its quest to find a new rabbi.

“Rabbi Tendler turned innumerable lives around, and it will be a great loss for us,” Brad Turell, Shaarey Zedek’s communications director, told The Journal. “He’s very talented and we wish him the best.”

— Amy Klein, Religion Editor

Sharansky Visits Southland

Israeli politician Natan Sharansky spent a quick two days in Los Angeles last weekend, giving four speeches on Jan. 22 calling for more American Jewish involvement in the upcoming World Zionist Congress.

“People have a need to strengthen their bond, somehow feel themselves part of a bigger family,” Sharansky told The Jewish Journal. “It doesn’t matter what origin; it doesn’t matter whether they are right or left; more and more Jews feel the need to become close to Israel. Before you are looking for the new way with your connection with Israel, what about the most traditional way?”

The prominent Likud party member was brought to Los Angeles last weekend by the West Coast chapter of American Friends of Likud. He encouraged Jews here to get more active in the quadrennial congress this summer of the World Zionist Organization (WZO), which controls the multimillion dollar budgets for The Jewish Agency.

Organizers said Sharansky spoke to about 35 Likud supporters at a Sunday breakfast, then to 100 people at the Hillcrest Country Club, plus more than 200 people later Sunday afternoon at Nessah Synagogue in Beverly Hills and finally another 90 at a private dinner at a television producer’s home.

Since last November, the WZO’s American branch has been selecting delegates for this June’s 35th WZO Congress in Jerusalem. Voting ends in late February with U.S. candidates from Likud, Russian, Green Zionist, Meretz, Harut and other Jewish movements. Sharansky wants more U.S. Jews to sign up with the $7 registration fee on the WZO’s American Zionist Movement Web site and then vote for delegates concerned about WZO spending.

In an interview between two of his speeches, Sharansky criticized the WZO Congress as a, “narrow group of people without broad involvement of Jews [worldwide]. So people simply don’t know, its connection of involvement and distribution of funds. Jews have an opportunity to participate in it, but they’re not using this opportunity. One percent maybe knows about its existence.”

Sharansky quit his minister-without-portfolio post last May in protest to Prime Minister Ariel Sharon’s pullout last August of Gaza settlers. While Sharon’s former Likud party sponsored Sharansky’s two-day L.A. visit, the onetime Soviet dissident said, “When speaking abroad, I’m trying to speak as little about splits in Israel as possible. When speaking to the Jews of Diaspora, you have to speak about building bridges between Jews of Diaspora and Israel.” — David Finnigan, Contributing Writer

A Dozen Nonprofits Get Foundation Grants

The Jewish Community Foundation recently awarded grants totaling $116,000 to 12 mostly local nonprofit organizations to support a variety of services, ranging from suicide prevention hotlines to dental care for the poor and counseling and tutoring for abused and neglected children.

The Foundation’s grants ranged in size from $5,000 to $20,000 and will help fund valuable services that government money alone cannot underwrite, said Marvin I. Schotland, foundation president and chief executive.

“There are vast pockets of need that cannot possibly be met at this time by the public sector,” he said. “Support by our organization to the greater community is more critical, and immensely gratifying, than ever and remains a vital part of our mandate.”

The foundation, created in 1954, is the largest manager of charitable assets for Greater Los Angeles Jewish philanthropists. With more than $590 million under its management, the Foundation distributed last year $58 million in grants to more than 1,300 organizations.

Among the nonprofits that received grants in January:

  • The Los Angeles Free Clinic received $10,000 for its dental program. This year, the clinic, which provides health and other services to the uninsured and the working poor, expects more than 3,500 children and adults to make more than 9,000 visits for dental services.
  • Trevor Project Inc., based in Beverly Hills, received $10,000 for a suicide prevention hotline and educational programs that promote tolerance for gay teens and those questioning their sexual orientation.
  • New Ways to Work in Sebastopol, Calif., received a $10,000 grant to help prepare children in foster care for independence at age 18. Over the next four years, nearly 4,000 Los Angeles youths currently in foster care are expected to become emancipated and leave the foster care system.
  • Inner-City Arts received $10,000 for a hands-on arts program designed to improve literacy among grade school students enrolled in the Los Angeles Unified School District.

Marc Ballon, Senior Writer

Chabad in the House

What is “The Rebbe’s Gelt?”

Literally, “the rabbi’s money,” it’s the name of a new Chabad program unveiled last week at the annual West Coast Convention of Chabad/Lubavitch for Shulchim, or emissaries. The new initiative will provide grants and loans to those rabbis who need short-term financial aid.

More than 170 Chabad rabbis and emissaries gathered at the Renaissance Long Beach Hotel and the Hebrew Academy in Huntington Beach, for the Jan. 15-16 convention. Chabad West Coast unveiled Camp Gan Israel Running Springs, a new Jewish overnight camp located on Chabad’s Kiryas Schneerson mountaintop campus. Chabad also announced its plan to organize the first ever Woman’s Convention of Shluchos on the West Coast, tentatively scheduled for May in San Diego. — Amy Klein, Religion Editor

Thousand Oaks Temple Teacher Receives Award

Bobbie Match, who has spent 10 years at Temple Adat Elohim’s Early Childhood Center received the Grinspoon-Steinhardt Award for Excellence in Jewish Education presented by the Jewish Education Service of North America, Inc. The award recognizes outstanding classroom-based teachers in formal Jewish educational settings. It includes a $1500 grant for continued professional development. Last year Match received the prestigious Lainer Distinguished Early Childhood Educator Award from the Bureau of Jewish Education of Greater Los Angeles (BJE).

Other recent BJE Award winners from Temple Adat Elohim are Michelle Princenthal, winner of the 2005 Smotrich Family Education Award; Tara Farkash, winner of the 2003 Lainer Distinguished Early Childhood Educator Award; and Marcy Goldberg, winner of the 2004 Lainer Distinguished Educator Award. — NZ

Yago Joins Israel Securities Authority Board

Glenn Yago, director of Capital Studies at the Milken Institute in Los Angeles, was appointed to the International Advisory Board of the Israel Securities Authority (ISA), the government body that oversees and regulates the Israeli capital market and serves the same function as the Securities and Exchange Commission in the United States.

Yago joined key Israeli economic policy makers, including ISA chairman Moshe Tery, Bank of Israel Gov. Stanley Fischer and Tel-Aviv Stock Exchange chairman Yair Orgler, for the first meeting of the International Advisory Board in New York. Other board members from the U.S. include Leo Melamed, chairman emeritus of the Chicago Mercantile Exchange; Douglas Shulman of the National Association of Securities Dealers; Bill Brodsky, chairman of the Chicago Board Options Exchange; Milton Harris of the University of Chicago School of Business; and David Loglisci, deputy comptroller of the State of New York.

Appointing Yago, Tery said that he wanted the economist’s experience and insight “to help build the legal and economic infrastructure to advance Israel’s capital markets and its standing as a venue for global investment.”

Yago is a leading authority on financial innovations and capital markets and specializes in privatization projects to improve the economic climate in the Middle East. He has experience working with municipal, government, business and academic leaders in the region to promote economic reform. He is a senior Koret Knesset Fellow and teaches at Tel-Aviv University and the Interdisciplinary Center-Herzliya. He is the author of numerous books and studies, including “The Economic Road Map: Beyond the Israeli-Palestinian Conflict” (Milken Institute, 2005). —NZ

Bubis Honored for Community Service

Professor Gerald Bubis, founding director of the Irwin Daniels School of Jewish Communal Service (SJCS) at the Los Angeles School of Hebrew Union College-Jewish Institute of Religion (HUC-JIR), was honored recently when the school celebrated its 36th Anniversary at the Dorothy Chandler Pavilion. Two-hundred guests turned out for the event, including colleagues, community leaders, fellow SJCS alumni and old friends, saluting Bubis’ efforts at the school and in the field of Jewish Communal Service.

The (SJCS) was founded in 1968 and is the oldest professional school of its kind. Its inter-disciplinary approach combines study of Jewish tradition and text with tools from the fields of the social sciences and business. Open to students from all areas of religious thought and communal life, the School seeks to be inclusive and pluralistic. Since its inception, 650 people have graduated from the school.

More than 300 SJCS graduates hold dual master’s degrees from USC. Twenty-five rabbis hold degrees from the school and 37 SJCS graduates have received dual degrees in Jewish Education from the HUC-JIR/LA Rhea Hirsch School of Education.

Concurrent with the celebration, alumni and friends of the School of Jewish

Communal Service raised more than $135,000 in scholarships in honor of Bubis. —Norma Zager

Stan’s Customers Go Bananas Over Reopening

Asked about the past three and a half months, shopper Kathy Mannheim said, “I hated it. It has not been a happy time in my life.”

She’s referring to the period of time she endured without her favorite local produce store, Stan’s. A Pico-Robertson neighborhood fixture, Stan’s closed after the High Holidays, when owner Stan Pascal got sick and was unable to carry on his usual six-day-a-week schedule.

Earlier this month, Pascal reopened and was greeted with the kind of enthusiasm normally reserved for rock stars.

“I’m thinking of giving autographs,” he joked.

Feyge Yemini, who patronizes the store twice a week to supply her large family, said she was “extremely happy” about Pascal’s return.

“I never found a comparable high-quality fruit store,” she said. “I had to go to five places to get what I can get here.”

Pascal started in the produce business as an 8-year-old in Windsor, Ontario, where he would help his father out on the weekends. In 1957, he came with his family to Los Angeles, and worked at his father’s three produce stalls at the Grand Central Market downtown. After his father died, Pascal and his wife, Susan, opened their own store on Fairfax Boulevard, where they remained for more than two decades before moving to the current location.

Fairfax resident Miriam Fishman continues to shop at Stan’s despite the distance.

“It’s a haimisch place,” she said. “There’s no other fruit store like it in town.”

In a time of big box markets and megastores, Stan’s has remained a place where retailer and customer maintain a personal relationship. Pascal greets customers by name, allows regulars to purchase with IOUs, and has been known to weigh a customer’s new baby on the produce scale.

During his absence, rumors circulated that he had sold the store, and in fact, he almost did. “At the last minute I changed my mind,” Pascal said. “I missed the people.”

The feeling is mutual. “I went to other places but it wasn’t the same,” said customer Mannheim. “It wasn’t Stan’s.” — Nancy Sokoler Steiner, Contributing Writer

 

L.A. Hosts Debate on Israel Economy


“It’s the economy, stupid,” was President Clinton’s campaign mantra, and the same lesson was hammered home June 5-7 to 25 Israeli diplomats at a three-day conference at the Beverly Hilton.

“Growing Israel’s economy must be the priority of every Israeli representative abroad, and let others worry about the peace process,” said Stanley Gold, considered the largest private investor in Israeli industry.

In the 21st century, it is trained intelligence that grows the economy. International competition will not be for land or oil, but for human capital, observed former Wall Street powerhouse Michael Milken, now chairman of the Milken Institute think tank.

Gold and Milken were among the few to address the sessions in English. For most other discussions, Israeli consul generals and economic attaches from five U.S. cities, the ambassador to Canada and high officials from Jerusalem brainstormed in Hebrew on how to turn good advice into practice.

Holding the meeting on the West Coast, rather than in traditional New York or Washington, D.C., was a breakthrough for Ehud Danoch and Zvi Vapni, the No. 1 and No. 2 men at the consulate general in Los Angeles, who lobbied for the venue and organized the conference.

The choice of Los Angeles spoke to the large concentration of top American and Israeli entrepreneurs in the Silicon Valley and the rest of California, as well as the growing orientation of the world economy toward the Asian continent, Vapni said.

That direction, fueled by the astonishing growth of technological brainpower in China, India and other Asian tigers, was driven home by Milken.

In barely 25 years, he predicted, Asia’s output will make up 58 percent of the world economy, followed by 25 percent for North America and 12.5 percent for Europe.

Israel is generally well-positioned for the “human capital” era, as shown by its present standing in the Middle East.

With only 0.6 percent of the region’s land area and 5 percent of its population, Israel today accounts for 24 percent of the economy of the region, Milken said.

Israel’s chief strength lies in the “creativity, out-of-the-box thinking, and product development” in the high-tech and biotechnology sectors, said Dr. Glenn Yago, director of capital studies for the Milken Institute.

National healthcare, for which Israelis pay one-tenth of the cost in America while enjoying longer life expectancy, would be one area in which Israeli managers could well advise their overseas colleagues, said Milken.

At the same time, Israel’s economic expansion is hampered by some pronounced weaknesses.

“Israel doesn’t market itself and its products, or it does so badly,” the diplomats were told bluntly by Gold, CEO of Shamrock Holdings, the largest private fund investing in Israel.

Israeli businessmen also are not aggressive enough, Gold said, a charge rarely leveled at the Jewish state.

“You should only do business with foreign companies which, in turn, invest in the Israeli economy, otherwise you are fools,” he said. “Tell an American defense industry you will only buy if it invests in a $100 million portfolio on the Tel Aviv stock exchange. It’s how business is done.”

In addition, Gold said, Israel “does a poor job of using people like me to talk to American investors, You should put together a pool of people like me to talk about Israel to American business groups.”

Danoch, the Israeli consul general in Los Angeles, acknowledged that while marketing, promotion and advertising were not Israel’s strongest suit, business and government were working together to remedy the shortcomings.

It is also his job “to show that there is much more to Israel than scary headlines, to point out the achievements of our industries, culture and universities,” Danoch added.

Yossi Gal, deputy director for economic affairs in Israel’s Foreign Affairs Ministry, who served as de facto program chairman, stressed the need for “synchronizing our economic and diplomatic efforts, in the sense that economic issues must be an integral part of every diplomatic exchange.”

Indeed, the conference itself, bringing together representatives of the often competitive ministries of foreign affairs, finance and trade and industry, served as an example to the hoped-for synchronicity and synergy in Israel’s efforts abroad.

The fact that this meeting among diverse ministerial interests was conducted without any apparent bureaucratic infighting and one-upmanship, noted one observer, augurs well for the future.

 

Nonprofits Refocus 2005 Funding Efforts


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At the Israel advocacy group StandWithUs, executive director Roz Rothstein can look back wistfully on a seemingly more innocent time when fundraising was less convoluted for the four-year-old group.

“Life was simple when we had one brochure, one Web site and two or three people on staff,” Rothstein said. “Now, we have five Web sites, multiple speakers, brochures in multiple languages, over 10 people on staff, a shipping department and we are looking at opening up a New York office, as well as chapters around the country. We have a healthy budget and strong community support. The biggest challenge is always development.”

Development is the nonprofit’s world polite term for money. Jewish non-profits are scrambling for every dollar and for those big-fish $10,000 donors, competing not only with each other but with a larger, equally competitive group of secular charities. The money chase can exhaust both partners in the donor dance.

“I cannot neglect my actual work and commitments, so the time I spend on development forces me to work nights and weekends,” Rothstein said. “There are many groups approaching the same people for donations; even the best of them get weary.”

Jewish charities also must respond to government moves. As president of the Jewish anti-hunger group MAZON, H. Eric Schockman is concerned this year about both donor fatigue and 2005’s expected social service cuts at both the state and federal level.

“Basically, we’re looking at not enough revenue ultimately to sustain the major entitlement programs that the federal government is involved in,” Schockman said. “Foster care, Medicare, you go down the list. So we have to assist donors in sort of understanding the implications of what will come out of the federal budget debate come next September or October, and at the state level it gets even more convoluted. I think in the sort of long term sustainability, it’s going to be a difficult year.”

Money to fund fights against anti-Israel sentiments and long-term hunger is coming as Jewish groups expand their traditional philanthropy focus. At the Anti-Defamation League’s (ADL) Pacific Southwest regional offices, development director Barbara Racklin has been working for the past two years on creating an expanded ADL endowment culture of getting donors to think beyond the year-to-year annual fundraising.

“The Holocaust generation understood the mission and embraced it,” said Racklin, who was a Pasadena-based fundraiser for the American Red Cross before joining the ADL. “I’m focusing on trying to endow gifts so that we have a future that we can count on, rather than just about day-to-day. For the ADL it’s been year-to-year for a long time. The endowment legacy is fairly new. The ADL often in the past was not necessarily seen as a fundraising organization; people supported it but I don’t think they thought that as an organization it needed to raise money.”

For Racklin, this change in ADL thinking has meant scaling back, combining or consolidating some of the annual fundraising events. Also, she said, it means working to, “personalize the mission” for long-term endowment donors and uniting the ADL’s previously separate offices for legacy/endowment and planned-giving donors.

“Everybody wants to secure the future of their nonprofit charity,” Racklin said. “The beauty of planned giving is that you’re talking to the people that support you already.”

At the Jewish Federation of Greater Los Angeles, president John Fishel is trying to address the generational changes in wealth, from L.A.’s post-Holocaust community-building funders to the younger generation of community sustainers. That means more explaining to donors where their dollars go in Southern California.

“Israel remains very, very key,” Fishel said. “But I think that if you look below the surface with younger people, their primary interest seems to be moving toward supporting local people more in their own communities. We have tried to create programs that support those things that we think motivate our donors to give direct dollars to as opposed to what I might refer to as a block grant.”

World events also affect donors, including the Asian tsunami and the continuing frequent attacks on Israeli citizens coupled with rising anti-Semitism. At StandWithUs, Rothstein said, “By now, everyone understands that we need to pay far more attention to educating our youth about Israel and Jewish history, about what Zionism means, in order to prepare them properly for possible challenges on their colleges campuses.”

The tsunami also has expanded MAZON’s poverty work abroad, but without hurting the group’s U.S. emphasis.

“I don’t see that trade-off happening; it’s an amazing sort of testimonial to the understanding that disasters and emergencies and wars of genocide take priority along with sustained issues that Jews understand must be tended to,” Schockman said. “I’ve only seen an enhancement of philanthropic goodness and giving along with concerns in southern Asia.”

For Rachel Jagoda, director of the Los Angeles Museum of the Holocaust, southern Asia in 2005 is of less immediate concern than southern Poland in 1945. She is seeing her old survivor funding base die off and it must be replaced with a less Jewish, more eclectic donor culture equally committed to preserving Shoah remembrance.

“We have had to look outside of ourselves,” Jagoda said. “The majority of our funding has been coming from small private foundations that are not necessarily Jewish. There was this idea at one time that there’s 20 Jews [in Los Angeles] with money and we’re all in competition with each other. I think we’re better served appealing to, and working together with, other institutions.”

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Web Links Your Wallet to Gifts From Israel


 

With Chanukah fast approaching, you might want to look to the east for the best gifts. Presents from the Holy Land have resonance for both the recipient and for Israel, whose economy could use a little boost from American consumers. Since most people can’t just run to Jerusalem for holiday shopping, consider these Web sites as outlets for gift items you can’t get anywhere else.

” target=”_blank”>israeliproducts.com

Buy a jar of honey from the actual Land of Milk and Honey. Or create a unique and original gift basket from this site, which includes cookies and pastries, spices and olive oil. And if you spend more than $100, then Linda Katz, owner of the site, will pay all of the shipping charges. Hers is a shop based out of Maryland, dedicated to paying all the overhead costs of importing Israeli goods. The two-year-old Internet company donates 100 percent of its modest profit to charities in Israel. According to Katz, her small staff takes no salaries and they all have other jobs. She said the main goal of her business is to distribute Israeli products in the United States.

” target=”_blank”>israelrose.com

A couple years ago, Flori Rosenthal of Tustin’s Congregation B’nai Israel visited some family in New England. She was greeted with warm smiles and fragrant roses upon her arrival. When she asked where the beautiful roses came from, she was surprised to learn they came all the way from the Negev Desert in Israel. Since, she has arranged fundraisers for her temple by purchasing the roses in bulk and selling them to congregants and community members. The roses grow in a computerized climate-controlled greenhouse and come in eight varieties. Two types of mixed dozens are also available. The roses are freeze-dried and need hydration upon arrival. Instructions are included with the package. According to Flori, the hydrated roses last up to two weeks. The only catch for these beautiful desert blooms is you have to purchase a minimum of four dozen so they can be sent in bulk. Four-dozen roses cost $70 — that’s only $17.50 per dozen, shipping included. The deadline to order roses for arrival by the start of Chanukah may already have passed by the time this article goes to print, but if you hurry, you may be able to receive your roses before the eighth night.

” target=”_blank”>mavrikjewelry.com

This site brings beautiful custom-made jewelry found only in boutiques directly to your doorstep. Internationally acclaimed artisans such as Michal Negrin and others fashion breathtaking adornments from precious metals and stones, as well as other materials, inspired in the heart of the Holy Land. The pink, green, blue and gold crystals in Negrin’s rings surround a delicate flower set in a ring of brass. The rings, bracelets, earrings and necklaces capture light and attention wherever they go. Another favorite set by an unnamed artist is a fiery blue opal set in a sterling silver square — a bargain at $49.95. While you’re at it, why not splurge on the earrings, too? Only $45 more. Oh, wait. We’re shopping for others, right?

 

Jerusalem Gets Business Jump-Start


Jerusalem might be a spiritually moving “holy city,” but many Israelis see it as an economic backwater from which young people are fleeing. Roughly 7,000 highly educated young people leave the city each year, and 40 percent of the city’s residents live below the poverty line.

The establishment of the Hebrew University in 1927 created an image of an ivory-tower town, while commerce and industry developed primarily at the center of the country. Today, Nir Barkat, high-tech entrepreneur and dynamic Jerusalem councilman, is trying to breathe economic life into the city by using the academic and intellectual sectors to jump-start the capital’s economy. In partnership with venture capitalist Alan Feld, Barkat has created StartUp Jerusalem, bringing together high-tech and venture capital leaders, university researchers and Jerusalem businessmen in a promising new business initiative under CEO Eli Kazhdan.

The largest non-Israeli delegation at the StartUp Jerusalem Conference, which recently launched the initiative, came from California. State Controller Steve Westly pointed out that in today’s high-tech world, academic institutions, like those found in Jerusalem, are the springboard for business and industry.

“Government investment in research at Stanford University led to the flourishing of Silicon Valley,” said Westly, an Internet development pioneer.

“The future of the world economy is in technology, particularly in the life sciences,” he said, calling for investment in Jerusalem’s medical and university research, and the creation of a culture that provides incentives to take risks.

StartUp Jerusalem initiative is based on the economic “clusters” theory of Harvard professor Michael E. Porter, who served as honorary chairman of the conference, and consults for StartUp Jerusalem through his Center for Middle East Competitive Strategy. Porter was impressed that, in spite of Israel’s security situation, it has maintained its competitive advantage. In line with his clusters theory — geographic concentrations of interconnected companies — Porter offers strategic tools to analyze the dominant economic sectors in the city, and create infrastructure and links between the various companies in each sector. He emphasizes co-operation and exchange of information, rather than competition among the businesses of each sector.

“Prosperity is a win-win situation,” Porter said at the conference. “If one company within a sector is productive, it will help others be productive as well.”

StartUp Jerusalem is concentrating on biotechnology, since Jerusalem boasts resources that can make it an important player in that field. In addition to high-level research being done at the Hebrew University and Hadassah Medical Center, Jerusalem College of Technology and Hadassah College, Jerusalem also hosts 28 percent of the Israeli companies in biotechnology, including Teva and Medinol. Fifty percent of the biotech patents registered in Israel come either from the Hebrew University or Hadassah Hospital.

StartUp Jerusalem is also highlighting outsourcing, a fast-growing player in Jerusalem’s economy particularly suited to Jerusalem’s multilingual and ultra-Orthodox population. According to Kazhdan, hundreds of residents can be employed in service centers for foreign companies, particularly American organizations. Jerusalem possesses the infrastructure for such centers and the government is willing to provide subsidies for them. But most of all, Jerusalem boasts former American residents, both Jewish and Arab, fluent in English and steeped in American culture, who can man the telephones for hotel and airline reservations, banking and telecommunications organizations outside of Israel.

“Israel cannot compete with India’s cheap labor,” Porter said, “but it can provide a quality labor force able to communicate with clients on their own wavelength.”

David Silbershlag, an employment consultant and a StartUp Jerusalem board member, urges the business community to reach out to the potential in the ultra-Orthodox community.

During the 19th century, Jerusalem became a place where Jews came to study Torah supported by communities in the Diaspora. This tradition continues, accounting for a large unemployed ultra-Orthodox sector.

“But there are different types of ultra-Orthodox, many with multilingual and technical capability,” Silberschlag said. “Outsourcing can provide employment for them in frameworks that respect their unique religious character.”

Clustering can also be a model of Arab-Jewish co-operation. Since service centers must function without interruption, English-speaking Arabs can be on call Saturday and Jewish holidays, while Jews can take over on Arab holidays.

Jerusalem’s cultural and religious treasures also make it a great tourist attraction. But it must be honed and refined. But interfacing between tourism and cultural organizations must be improved to develop a clearinghouse of information for tourists.

“Economic development is not magical,” Porter said. “It involves a relentless process of improvement.”

Jerusalem must overcome many obstacles to become a flourishing business center. Former Jerusalem Manufacturing Association head Motti Tepferberg said that one of the problems is the lack of open land for manufacturing. He also points out that there hasn’t been sufficient attention given to the subject of attracting business to Jerusalem.

“The government has not provided business incentives or tax breaks to attract businesses to Jerusalem,” he said. “There also have to be greater cultural incentives.”

Terrorism has certainly affected the city.

“Foreign investment has been very low in the past few years,” said Avraham Aberman, a prominent Jerusalem lawyer. “But as terrorism has declined, or people simply got used to it, large venture capital groups situated themselves in Jerusalem, and tourism is flourishing again. The main problem remains Jerusalem’s image. It’s a psychological matter. Jerusalem doesn’t have the image of a dynamic center, a place where the action is.”

StartUp Jerusalem hopes to change this perception by highlighting Jerusalem’s competitive advantages. But what assurance is there that StartUp Jerusalem can work? Barkat, who ran an unsuccessful mayoral bid in Jerusalem, has confidence in the city’s innate advantages. But as he also pointed out, “We’re not inventing the wheel. We’re following a method that has succeeded in other places.”

“The government is on board,” said Barkat, who pointed to significant support from Finance Minister Binyamin Netanyahu. “However, the government is not investing or interfering. We’re not asking for fish, but rather for rods that will enable us to catch the fish.”

Barkat feels that things have begun well, with the top echelons in the health and medical fields, in particular, buying into the idea.

“We don’t have any choice but to be successful,” Barkat said. “The alternative is unthinkable for the future of Jerusalem.”

Rochelle Furstenberg is a Jerusalem-based journalist and critic writing about social, cultural and religious issues. She’s a columnist for Hadassah Magazine and a regular contributor to the Jerusalem Report.