Weisglass pushed Sharon to reopen Jericho casino

Yaakov Katz The Jerusalem Post May 6, 2004
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During negotiations with the Labor Party in October 2000 over the
possibility of the Likud joining a national unity government, Ariel Sharon
was asked by attorney Dov Weisglass, today his bureau chief, to speak with
then premier Ehud Barak over the possibility of reopening the casino in
Palestinian-controlled Jericho, The Jerusalem Post has learned.

The casino is jointly owned by the Palestinian Authority, Casinos Austria,
the Austrian bank BAWAG, and Austrian-Jewish businessman Martin Schlaff, a
key figure in the ongoing police investigation of the prime minister and his
son, Gilad.
"At the time I did not think anything was too strange with Weisglass's
request, since at the time we knew that he was an attorney for the casino,"
said one of the participants at a meeting in October 2000 at the Sharon
ranch. "But now, with the allegations that Sharon may have received bribes
from Schlaff, the meeting and the request seem suspicious."

The reopening of the Oasis Casino, which had a daily turnover of some
$680,00 before it was closed nearly four years ago due to the conflict with
the Palestinians, depends largely on Israeli policy in the territories.

The owners were reportedly given a franchise to operate the Jericho casino
until 2028, with a 10-year tax exemption from the day it opened. BAWAG, like
Schlaff, is also eagerly waiting for the government to allow for Israelis to
resume gambling at the casino.

Following his victory in the 1999 Likud Party leadership primaries, Sharon
went into debt to repay NIS 4.7 million in illegal campaign contributions.
Gilad Sharon received a $1.5 million loan, originating in Austria, from
South Africa-based businessman Cyril Kern in order to repay another loan the
family had taken out in order to return the illegal donations.

The police are investigating the possibility that Kern served as a front man
for Schlaff, another friend of Sharon's, and a businessman heavily invested
in Israel, who could have made the loan in the hope that Sharon would make
decisions favorable to his business interests, including the reopening of
the Jericho casino.

"We met to talk about whether Sharon should join a unity government with
Barak, and Weisglass told Arik to pressure Barak into reopening the casino,"
the source said. "They agreed that if Sharon joined the coalition, then they
would ease restrictions on the Palestinians in Jericho in order to
inadvertently allow for the casino to reopen."

Shortly after the meeting at the ranch in order to discuss Weisglass's
proposal, the national unity talks fell through. After Barak called for
elections in December 2000, Sharon, in a landslide victory, was elected
prime minister in February 2001 and appointed Weisglass as his bureau chief.

In November 2002, after Gilad Sharon learned that police were tracking the
money transfers, he received two additional money transfers from BAWAG,
totaling some $1.5 million.

According to Paul Herzfeld, CEO of Casinos Austria, the casino in Jericho
has four shareholders: The BAWAG bank owns 13 percent, an organization
called the Palestinian National Fund owns 25 percent, his company owns 18
percent, and Schlaff is the largest shareholder with 44 percent. The Cancun
casino boat currently floating off the Eilat coast in international waters
is controlled by Schlaff, who holds 64 percent; BAWAG owns 16 percent and
Casinos Austria owns 20 percent.

Herzfeld says that the casino owners invested $100 million in the Jericho
business venture and that the shareholders have yet to make back their
initial investment.

"We have followed the developments of what is going on in Israel and that is
basically all we can do, since the reopening of the casino depends on what
is going on in the Middle East and the political developments there,"
Herzfeld said. "We have tried to keep the project up and running by keeping
the casino in good shape so it can be reopened."

Herzfeld confirmed that Weisglass served as Casinos Austria's lawyer in
Israel and that his firm continues to handle their affairs. He denied
however, that his company is involved in any form of political lobbying in
order to reopen the casino, but said that "there were periods that things
went in a way that there was a feeling that it might be reopened."

Three weeks before the 2001 prime ministerial elections and a mere two
months after the meeting at Sharon's ranch, Schlaff and Muhammad Rashid,
Yasser Arafat's personal economic adviser and a founder of the Jericho
casino, secretly met with Omri Sharon, the prime minister's other son,
Weisglass, and former Foreign Ministry director-general Eitan Bentsur in
Austria.
Bentsur denies that the casino was mentioned at the meeting and that the
sides strictly discussed diplomatic matters, despite media reports
suggesting otherwise. "The goal of the trip was to see if there was a
possibility to create contacts between Arafat and Sharon for possible talks
in the future," Bentsur said.

Following the meeting, however, a source in Arafat's office said that
Palestinians believed the discussions explored the possibility of reopening
the casino. In addition, Austrian sources quoted in Ma'ariv said the meeting
was convened at the initiative of the Casinos Austria's chairman, Leo
Wallner.

Last week, police investigators charged that Schlaff was closely connected
to straw companies established by Gilad Sharon and that there are serious
suspicions the Sharon family received perks from the Austrian businessman.

Police asked the court for permission to read documents seized during a raid
on the offices of attorney Avi Alter, who served as a tax consultant for
Gilad Sharon when setting up straw companies in the Caribbean. Police
believe that these documents may link Schlaff to Gilad Sharon, after a
search of Alter's files revealed that he also performed tax services for
Schlaff.
"According to what we have seen today, Martin Schlaff is linked directly or
indirectly to the control or ownership of Gilad Sharon's companies," said
National Fraud Squad Supt. Rami Tamam.

Labor Party officials denied any knowledge of a meeting between Barak and
Sharon during which the Jericho casino was discussed, but did say there were
many secret channels of communication established between the two and that
the topic could have been brought up there.

"We were just after Camp David and the national unity talks mostly dealt
with a new diplomatic plan and government policy," said Labor Party MK
Yitzhak Herzog, who was closely involved in the coalition talks at the time,
quickly adding that the casino "may have come up in other channels that were
established between Sharon and Barak." Gilad Sharon's attorney, Micha
Fetman, denied allegations by police that Schlaff stood behind the Kern
loan.

"There is no connection between Schlaff and Gilad, except that they happened
to use the same tax consultant," Fetman said. "Kern is a family friend and
has no interests in Israel, so in order to create a crime and suspicions
police need to say that Schlaff - who has business interests in Israel -
stood behind the loan and Kern was only a front man."

Other people involved in the establishment of the casino included Shimon
Sheves, a former director-general of the Prime Minister's Office under
Yitzhak Rabin and who was recently acquitted of bribery and fraud charges.
Sheves, who is a good friend of Weisglass's and was represented by the
attorney during his criminal trial, served as a consultant for BAWAG in the
casino project.

Sheves is also a close friend of Schlaff's.

Sources close to Sheves said that Schlaff joined the casino project in order
to promote peace between Israel and the Palestinians.

Weisglass declined to comment for this article.