The quiet benefactor: Lowy's close ties with Israel | The Sydney Morning Herald

The quiet benefactor: Lowy's close ties with Israel

The Sydney Morning Herald, September 29, 2008

When a US Senate committee alleged Frank Lowy concealed $US68 million from the Australian Tax Office in Liechtenstein, Lowy said he had given the money to Israeli charities and insisted he had met all his tax obligations. As an Australian parliamentary committee prepares to question the Tax Commissioner this week, Middle East Correspondent Jason Koutsoukis explores Lowy's strong links with Israel.

FRANK LOWY may not be a household name in Israel, but if power and influence are measured by the people you know, then his connections start at the top.

"They are very good friends," says Mark Regev, official spokesman of the Israeli Prime Minister, Ehud Olmert. "They have known each other for a long time."

Their relationship began in the 1980s when Olmert, then just an MP, regularly visited Australia.

Olmert, whose talent for cultivating important friendships was key to his political success, before he recently resigned on corruption charges, maintained his link with Lowy, who spends several months a year in Israel.

Last year the relationship brought Lowy some unwanted attention in Israel. According to Israel's accountant-general, when Olmert was minister for finance in 2005 he allegedly tried to tilt the tender for the sale of the Government's controlling stake in Bank Leumi in favour of Lowy by demanding changes to the tender documents. Lowy withdrew from the tender shortly before it closed, and a subsequent police investigation into whether Olmert had misused his office ended without charges being laid. There is no suggestion Lowy was involved in any alleged attempt to skew the tender process.

In the so-called Bank Leumi affair that dominated headlines in Israel, Lowy was described as nothing more than an "Australian real-estate magnate". No mention was made of the fact he had come to British Mandate Palestine as a migrant in the aftermath of World War II, had fought alongside Olmert's predecessor Ariel Sharon in the 1948 War of Independence, and was now one of Australia's most successful businessmen.

As there is no equivalent of the "w" sound in the Hebrew alphabet, Israelis were not even sure how to say Lowy's name, often pronouncing it as "Louie".

The mispronunciation is said to have annoyed Lowy but, according to a senior Israeli newspaper reporter who knows him and who spoke to the Herald on condition of anonymity, it was an accurate reflection of Lowy's low profile.

"This is a man who has deliberately sought to be under the radar here. There are lots of billionaires who float in and out of Israel, naming foundations after themselves. But not Lowy."

It may not bear his name, but the Israeli version of Sydney's Lowy Institute for International Policy - the Institute for National Security Studies, attached to the University of Tel Aviv - is equally his creation.

As its chairman, Lowy has gathered some of the most influential policymakers in Israel and wealthiest international benefactors to sit on its boards.

Much like the Lowy Institute in Sydney, it is a respected independent academic institute that studies key issues relating to national security and foreign affairs, but with a special focus on the Middle East.

Its vice-chairman is Dan Meridor, a prominent lawyer and former politician in the centre-right Likud party. Meridor served as justice minister and finance minister in the 1990s, and is contemplating a return to politics with the Likud.

Also on the board are the Israeli building contractor Alfred Akirov, the president of Tel Aviv University and former Israeli ambassador to the US, Itamar Rabinovich, and the Australian-born Martin Indyk, twice the US ambassador to Israel during the Clinton administration.

Among those on the board of trustees are Lord David Alliance, an Iranian-born Jewish-British businessman and Liberal Democrat politician, and Sir Ronald Cohen, an Egyptian-born Jewish-British businessman known as "the father of British venture capital" and the man who bankrolled the leadership bid of the Prime Minister, Gordon Brown.

Other trustees are the Chicago real estate mogul Lester Crown and the US property tycoon Mortimer Zuckerman, who owns New York's Daily News and is editor-in-chief of the influential US News & World Report.

One man who has known Lowy for almost 25 years is Avinoam Brog, president of Israel's leading market research and polling firm Market Watch, and brother of the former prime minister and current Labour Party chairman, Ehud Barak.

Brog got to know Lowy in the 1980s, when he was executive director of the Sydney branch of Keren Hayesod, the central fund-raising organisation for Israel throughout the world.

"First understand how deep is Frank's attachment to Israel," Brog told the Herald. "He fought for this country's independence from the British in 1948, and then Israel offered him a home before he joined other members of his family in Australia.

"By the time I served with Keren Hayesod in Sydney, Frank was a successful businessman and so, given his connections to this country, we got to know each other well."

Lowy and Barak also enjoyed "a very long and warm friendship", Brog said. "He brought Ehud out to Australia I think on several occasions, and whenever Frank is in Israel, which is often, I think the two would see each other … His influence is such that if he wanted to talk to any politician in Israel, then he could. And they will listen. I mean no disrespect to [Lowy], but that does not mean that anyone goes away and does what he tells them to."

Brog, who described Lowy's politics in Israel as "centre-left", said he believed he had also been a strong supporter of, and donor to, the Labour Party. He had also been a "very, very generous donor to Keren Hayesod" since the 1980s, Brog said.

"And I would expect that that financial support has only increased in the years since."

According to a handful of Australian and Israeli businessmen who are active in Israel and keep an eye on Lowy's movements in that country, the money that he puts into the Institute for National Security Studies and Keren Hayesod are the two main concerns he devotes time to outside his business interests.

Lowy's son David manages a family-owned hedge fund, Ion Asset Management, which, although domiciled in the Cayman Islands, focuses its investments in publicly traded Israeli and Israel-related securities. It is based in Tel Aviv.

But if Lowy does donate money to a wide range of causes, he does it discreetly, unlike the Pratt Foundation, the highly visible charitable organisation funded by Melbourne's cardboard king Richard Pratt.

"If you want to find Frank Lowy in Israel, the best place to catch him is at the Tel Aviv Hilton," said one source, who declined to be named.

Lowy built and owns an apartment building behind the Hilton on Tel Aviv's main waterfront boulevard and spends about three months of the year in Israel.

"I often see him there relaxing with friends, just enjoying being a relatively anonymous person," the source said.

Frank Lowy, Zionism and 9/11
On Australian-Israeli billlionaire, Frank Lowy. Research by Crimes of Zion, September 17, 2007.

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