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The phone call came while Samuel Hayek, a millionaire real-estate tycoon who divides his time between London and Tel Aviv, was sitting in his office in Jaffa and talking about his friendship with MK Avigdor Lieberman. Former minister Rafi Eitan was on the line.
"We've known each other since 1975," Hayek says after the call. "I was chairman of the Likud youth department then and he was working with Arik Sharon." Eitan wanted to consult with him about the promise he says he was given by Benjamin Netanyahu: that Eitan will retain the job of Minister of Pensioner Affairs in the next government.
"I don't believe it will happen," says Hayek - who is in regular contact with Netanyahu, too - after their conversation. Hayek conducts more sensitive conversations, with politicians more relevant than Eitan, far from the ears of unwanted listeners. "It's nice and sunny outside," he explains after taking his mobile phone with him and stepping out for a conversation about what he refers to as "low politics."
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For the past two weeks, Hayek has been traveling all over the country. The official reason for his visit is the opening of an exhibition of works by the English painter David Breuer-Weil at the Hayek Center for Contemporary Art in Jaffa, along with tours and meetings he held in connection with his position as chairman of the Jewish National Fund - UK.
But Hayek's activities in recent weeks also had an unofficial dimension, which included talks with his politician friends about negotiations for the formation of a new government. Thus, between tours and meetings, Hayek spoke with Lieberman, who was vacationing last week in Belorussia, with Netanyahu in Jerusalem and with Tzipi Livni and her husband, Naftali Spitzer.
"I speak with Hayek on a regular basis and I like him very much," Spitzer said this week when asked about the connection between them. "He is a dear man who is doing good things for the country and who cares very deeply about it." What is the source of Hayek's power? A political source familiar with the story explains that Hayek is "very discreet, incredibly smart, a personal friend to each side and enjoys the full trust of each and every one he deals with. In recent years, he has been assisting wherever he can." Hayek is modest about it. He acknowledges that his conversations with party leaders also touched on matters that concern the emerging coalition and confirms that messages were sometimes passed from one side to the other. But he insists that he is not a 'mediator.'
"I simply believe that what's needed here is a unity government with the three large parties and Netanyahu as prime minister," he says. The headquarters for Hayek's activity in Israel is located on Louis Pasteur Street in Jaffa, where his gallery is also located. On his visits here, he stays in an apartment he owns in the same complex. He recently purchased, for over $12 million, two apartments in the still-uncompleted G-Tel Aviv tower on Ibn Gvirol Street, in the same building where Shari Arison owns an apartment.
In London, Hayek lives in the prestigious Hampstead neighborhood, close to the house once occupied by Sigmund Freud. He used to employ a chauffeur, but these days he likes to drive himself around in his Mercedes-Benz C-Class. His business in Israel, which he describes as negligible compared to his dealings in London, is run for the most part by the S. Hayek holding company, which he founded in 2004.
Haaretz found that Hayek owns numerous properties here, valued at tens of millions of shekels. In recent years, he has donated thousands of shekels to the primary election campaigns of Netanyahu, Livni and Uzi Landau, and a few years ago he purchased the rights (for a few thousand shekels) to publish Lieberman's biography. He later entered into negotiations with Ma'ariv Press, which subsequently published Lieberman's biography "Ha'emet Sheli" ("My Truth"). Hayek admits the book was not a big seller. And he wishes to stress that he was not connected in any way to Lieberman's other business dealings.
Don't you see yourself as making a problematic connection between private wealth and government?
"I don't do business with any politician. The first time I helped Livni, when she ran in the Likud, I told her that the good thing about my helping her was that because I was contributing to her, I would never ask her for anything. My involvement in politics in Israel is small, very specific and free of financial or other interests."
Hayek doesn't think that his wealth is the reason for politicians' connections with him. "I don't think my connection with Livni or Landau came about because I have more shekels than they do," he says.
So what is your interest then?
"The good of the matter." Hayek's involvement in the current coalition negotiations isn't the first time he's been active behind the scenes in Israeli politics. In 2005, when Landau ran against Netanyahu for the Likud chairmanship, Hayek was the one who brought about the agreement whereby Landau would quit the race and announce his support for Netanyahu.
A political source says that Hayek was also involved in Landau's move to Yisrael Beiteinu, a move that caused a chill in his relations with Netanyahu. Landau, who affirmed that Hayek mediated between him and Netanyahu, says he first met Hayek in 1976.
"I greatly respect him for being an honest man of principle whose conduct is always above board," says Landau. "I trust him completely and I also consulted with him on my move to Yisrael Beiteinu." Before the previous elections, in 2006, Hayek mediated between Lieberman and Netanyahu.
"There was an attempt to find common ground so they wouldn't go after one another in the election, but the meeting between them was very unsuccessful," he says. Trying to explain the bad feeling between the two politicians, Hayek says, "You've heard of writers' envy? Well, there's also teachers' envy. The student, Lieberman in this case, finished school and went out into the world. There are areas in which he surpasses his teacher and areas in which his teacher surpasses him."
Location, location Hayek, who has never married, was born in 1953 in Kfar Sava and grew up in Bnei Brak. His parents, Salim and Nasira, immigrated to Israel from Baghdad with their three sons two years before. Another sister was born in Israel. "My father was a merchant in Baghdad. A rep for the Hercules & Singer Company. He made a lot of money from that.
In the 1930s, when Jewish Agency representatives came and asked him to help redeem the Land of Israel, he bought land here. Unlike a lot of friends of his, other Zionists, he bought land in an excellent way. He transferred money to the Anglo-Palestine Bank and told them, 'You act on my behalf. You check that the land really belongs to the person selling it, you check that it's in a good location. Then register it in my name and take a 20 percent commission.' For years, I asked him why he gave them such a high commission. He told me that other people, who gave a 3-4 percent commission, ended up buying 'land' in the middle of the sea.
"He had to leave Baghdad with only the clothes on his back, but he had land in Israel and a little more money in bank accounts abroad. He was lucky; the land he bought in Israel was in Bnei Brak, Tel Aviv, Petah Tikva, Herzliya Pituah. With the money he had he built a house in Bnei Brak. They moved into the house after living in a transit camp in Ramatayim. I always think about my mother, who in Baghdad would start the day with maids who washed her hands with rosewater, and then suddenly she's waking up in a tent in Ramatayim without running water or a shower."
Hayek grew up in a traditional home and maintains that lifestyle. "I eat only kosher food, I pray every morning. I make Kiddush every Friday night and on Shabbat I go to the synagogue and don't go around doing other things that aren't suitable for Shabbat. On rare occasions, I will drive on Shabbat, but it wouldn't be just to go to the beach."
Was your family well-off when you were growing up?
"No. My father had property, but he didn't have money. We had our own house, which was a rare thing, but we lived in poverty. We had kind neighbors who would sometimes buy a sweet roll and give it to me."
Why was the family that poor, if you owned property?
"Because my father wasn't a seller, he was a buyer. You buy and you suffer. He didn't buy land in Israel in order to sell it. The first time he agreed to sell something was in 1972, and that sale didn't come easy either."
Why - because he wanted to keep on saving?
"No, he kept on the same way when he was wealthy. He always used to tell me that he was sad when he heard that I sold something. 'In Israel, you don't sell, you just buy,' he said. I think that if I have needs now, it's not so terrible if I sell a piece of land so I can fulfill my immediate need and eventually, when I can, I'll buy another piece of land. He didn't see it that way. He was a hardliner. It wasn't a business philosophy, it was more a cultural or emotional philosophy, that you don't sell land in Israel. It's okay to suffer. It was an ideological thing."
You also have British citizenship. Have you ever been to Iraq?
"No, it doesn't interest me that much. My Iraqi side is mostly limited to eating kubbeh in Ramat Gan. My Jewish and Israeli side is very strong."
In 1972, Hayek was drafted into the intelligence corps; during the Yom Kippur War he served on the southern front. His involvement in politics began after his discharge, when he joined Likud. After serving as chairman of the party's youth branch, Hayek switched to Ariel Sharon's Shlomzion Party and served as his spokesman in the 1977 election campaign.
"I'm not ashamed of it, nor am I particularly proud of it," says Hayek. "I didn't like Sharon's personality that much. He was a very upstanding guy, but his focus on himself was practically obsessive. I say this as someone who knew him and, for a certain time, saw him on a daily basis. He loved himself and was very focused on himself. There were crossroads where he needed to make an objective decision, for the 'good of the state' so to speak. But if such a decision would harm him, he wasn't willing to make it.
"I was young, and I didn't understand that what really characterizes politics in Israel, the area where fateful decisions are made, is mediocrity. After meeting more and more politicians, I discovered that aside from a few people, mediocrity - or even less than that - is the overwhelming characteristic."
And today?
"It's a lot worse. I sometimes meet English politicians. Take someone just from the local level there. His speaking ability will be excellent. His knowledge will be very broad. I haven't met a British politician who's unable to quote from Abraham Lincoln's Gettysburg Address, which is the basis for anyone who is a public servant. British politicians possess extensive knowledge of world politics, geography and culture. Here I don't find that, unfortunately, except for a very small number of politicians. Uzi Landau, for instance."
In 1979, Hayek began studying philosophy and history at Tel Aviv University, but soon decided that this wasn't the right path for him. "Before the end of my first year, I left to study law in England. Why there? Because there were only a few spots for students in the Tel Aviv law school. Thousands of people wanted to get in there and my chances of gaining admission were very low."
A bitter family feud Hayek's move to England turned out to be his starting point as a businessman. He remembers it well: "I was renting a place and I soon realized that I was better off buying the house that I lived in. The price was 31,500 pounds sterling. I went to the bank and asked for a loan of 31,500 pounds sterling. They gave it to me and I bought the house. Afterward I asked for a loan of 2,000 pounds sterling and I used that money to fix up the house. A few months later, on my way to the train station, a real estate broker I knew stopped me and asked me if I wanted to sell the house. I said yes and told him my asking price was 65,000 pounds sterling. He said, 'You must be mad.' I told him, 'I like to be mad.' A few days later, he sent this couple to me; they were both teachers, this very pale and fair guy and this beautiful Indian girl. They saw the house and were afraid that if they left I'd sell it to someone else, so they gave me a check for 350 pounds sterling so I wouldn't sell it. When I took the check from them my hands were shaking. Not because of the amount, but because I thought there was a deal already. The next day, I closed the deal, I got 65,000 pounds sterling, I repaid the loan and from then on I started buying more houses and more houses and more houses." Is it a special touch? Luck? Talent?
"Look, most people who have to pass through a door will look at it, see a lock and say it's locked and so they can't go through it. As I see it, if people see one lock, they themselves add a second and a third lock and therefore they don't go through. I look at the door, I see the lock and decide that the door is open. And I'm telling you that from my life experience, there were many times when I came to a door that wasn't locked. Is it luck? I think a lot of it is psychological. When I had 30,000 pounds sterling, I thought I could buy the world. That's how I got started, thinking I could buy the world." He says that after that first deal, he convinced the bank to give him another loan and he began renovating more houses, and later also began building new houses.
"I know smarter people than me who have trouble making it, so I think that it comes from God, but if you can rationally ascribe it to something else, I'd be very glad to hear it." One of Hayek's investments outside the real estate field led to a bitter family conflict with his older brother, Zamir Hayek, who died a few years ago. "It's a very sad story. Zamir was a doctor who worked in Canada. In the mid-'80s, he called me and said he'd invented a medical device, a non-invasive respiratory instrument. He was afraid that other doctors around him would steal it from him. He asked me to register a patent on it and I did."
The Hayek brothers decided to develop the patent and market it internationally. Hayek says that his brother moved to England to work on the invention, but after he had invested hundreds of thousands of dollars without results, Samuel told his brother he wasn't going to invest any more of his own money in the project.
Hayek: "Years passed, we made a breakthrough in the medical field and the business field. An American company gave us $5 million to distribute the machines in the United States and there were investors from Israel, too: Migdal, Ashtrom and other companies. I pledged to the investors in Israel that I wouldn't raise our salaries and then my brother comes and asks me to raise his salary. I told him that I couldn't and he started to make trouble.
"At this point, he reneged on the agreements and said that the patent was still his alone and didn't belong to the companies. Instead of acting with my head, I acted on emotion, and it was probably the biggest mistake I ever made. I didn't give in to him because I was very hurt by him. I went to court and the court ruled that the patent wasn't his, that it belonged to the company. So then he went to Israel and sued my sister, who had been empowered to oversee my holding in the company. The district court ruled against my sister. We filed an appeal with the High Court and eventually the decision was that there should be a compromise and a different division of the holdings. But the conflict didn't end there. A few years later, he filed a motion for contempt of court, alleging that I didn't abide by the terms of the compromise. The judge told him to withdraw the motion because there was no contempt of court."
How did it end?
"All the money went down the drain. I lost millions on it. In 1997 we finally were able to manufacture a machine and we were about to take the company public at a value of 100 million pounds sterling, but since my brother claimed that the patents didn't belong to the company, the IPO was delayed until that could be resolved in court. By the time the court ruled that the patents belonged to the company, it wasn't a good time to do a stock offering. For the family, it was a disaster. My mother, my brother and my sister were all against Zamir. The trial was still continuing in Israel when he died and his children despised me and tried to hurt me any way they could, but in the middle of last year, we reached a compromise and settled everything. I paid them a little money to settle things with their lawyer, otherwise it could have pushed them into bankruptcy."
A year ago, Hayek was appointed director of JNF-UK. Legally, this is a separate organization from Keren Kayemeth LeIsrael (KKL) in Israel, but with similar objectives. In recent years, before Hayek's appointment, the Israeli and British organizations often clashed, sometimes in court both here and abroad. One suit alleged that the KKL used money transferred to it from England in order to purchase land, and JNF-UK wished to have its ownership of this land restored. There was another suit concerning the use of the JNF logo. Hayek says that JNF-UK spent close to 1.5 million pounds sterling on legal costs.
"At the height of the conflict, I was approached by KKL and asked to head a new organization that would compete with JNF-UK. I agreed to take the job on condition that they give me a mandate to reach a compromise and end the conflict. The new organization, JNF-CT, was founded and I headed it for a few months. And then we reached a compromise. As part of that, in February 2008, I was appointed director of JNF-UK." How did the legal battles end? "It was decided that KKL would pay the JNF-UK half a million pounds sterling for our lands over a period of 10 years, we would invest this money in joint projects and the land would come under the ownership of KKL. As for the logos, the decision was that the JNF-UK would transfer ownership of the logos to KKL and in return for a token payment of 10,000 pounds sterling, would obtain the right to use them for the next 50 years." And what happened to JNF-CT? "It was put on ice."
When he took over the post at JNF-UK, says Hayek, he found that things there were "almost at a nadir." He explains: "This organization was overly concerned with how it looked to the public, and not enough with substance. There's an organization in England that examines charity organizations and ranks them on a scale of 1 to 100. In 2006, the JNF-UK received just 32 points out of 100. The main reason was that the financial reports were hidden as much as possible and the public basically didn't know anything about them. When I came in, I completely changed the transparency of the activity and introduced proper administration, and within a year we were up to 60 points."
In the past few years, JNF-UK's donations have totaled about 16 million pounds sterling annually. Upon taking over the top post there, Hayek decided to promote investment in the Negev and the area bordering Gaza. This year, for example, money will be invested to develop land in the Halutziyot communities that are being built on the Halutza sands - on the border with Egypt - for the Gush Katif evacuees and others; in various projects in Sderot; in soup kitchens; in an orchard located in Neot Smadar and other projects. During the recent military operation in Gaza, JNF-UK sent money to the pre-military academy in Atzmona to help transfer students to areas outside the range of the rockets, and also extended assistance to the Reut organization, which helps the needy in Sderot.
"Our strategy," Hayek explains, "is to devote most of our efforts to the Negev. We're an organization connected to the land, to agriculture, to trees and people settling the land. People who were evacuated from Gush Katif have decided to rebuild their lives there. All the parameters - the Negev, trees, agriculture - suit us and so we decided to adopt this project. I've also proposed that we plant a million trees in the Negev over the next five years, but so far there's not enough land for this."
Do you support any projects that assist Israeli Arabs? Or mixed communities?
"We don't distinguish between one citizen and another in Israel. That doesn't appear in our criteria. If there's a request for assistance, we won't check whether it's a Jew or an Arab. If there's a joint project for Jews and Arabs, we wouldn't have any problem with that."
Is there anything like that?
"I think there was something like that. In the past, some in our organization used to say that the funds should only go to Jews, but we have no such criterion. We don't play games. Since I've been in the organization, the time for such game-playing has ended."
Do you think that KKL should also allocate land to Arabs for construction?
"As someone with a legal education, I can tell you that I don't understand this. Funds were collected for years by Jews around the world in order to purchase land in Israel. These lands are registered in the name of KKL, which said that it would hold them in trust forever for the sake of the Jewish people. Selling land to an Arab would be a violation of this trust.
"There's a problem here that needs to be resolved, because the Arabs come and say: Either we're citizens with equal rights or we're second-class citizens. But for the KKL it's a problem - If they were to sell land to Arabs, they'd be violating their duty. I think this is something that needs to be resolved at the state level and not by the organization."
Last Wednesday, Hayek, dressed simply, headed south to meet with leaders of some of the organizations that have already received funds from JNF-UK, as well as with some who are seeking contributions. Wherever he went, he was greeted very warmly. In the Halutziyot carrot fields, for instance. Also at the Atzmona academy, where he met with the head of the school, Rafi Peretz, who insisted on getting out of his sickbed in order to welcome him. At a nursery school run by the Reut organization, a teenage girl prepared a big meal for Hayek and his two escorts, during which he was told about the organization's activities. In Be'er Sheva, he met with the mayor, who asked for his support in establishing a park in Nahal Be'er Sheva. At all of these meetings, Hayek was very interested in hearing about the various activities and seemed uncomfortable as he was repeatedly thanked for his help. When I ask if he doesn't feel like a lord coming down to help the residents of a provincial town, he's almost offended.
"I don't come as a lord, I don't feel that way at all and I really hope that's not their feeling," he says. The next day, Hayek welcomed dozens of people to the opening of "Anorexic Babes," Breuer-Weil's exhibition at the Hayek Center for Contemporary Art. The show features boldly-hued paintings of anorexic models. Hayek is an art collector, of Israeli art primarily, but he also owns a Picasso as well as works by Chagall, Degas and others. He opened the gallery in Jaffa to promote young Israeli artists. Hayek's friend Avigdor Lieberman, back from his vacation in Belorussia, came to the gallery accompanied by his bodyguards. Hayek huddled with him and later mingled with the guests. Standing there among the models and celebrities who came to the opening, he looked momentarily lost.
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