Barak Reborn: Businesses and Corruption in Israel


Put up again thy sword into his place: for all they that take the sword shall perish with the sword.Matthew 26:52


 … by Roi Tov,  in Exile

On March 20, just one day after he left Israel’s Ministry of Defense, Ehud Barak registered his new company, Hyperion (EB) 2013, Ltd. Before that, on November 26, 2012, Barak (“barak” means “lightning” in Hebrew) stole the political thunder when he announced that he will not run for the upcoming elections in January.

“My decision to retire stems from my desire to devote that time to my family, and also because I have never felt that politics was the height of my ambition,” Israel’s Minister of Defense announced.

The most striking reaction came from then Minister of Information and Diaspora Yoel Edelstein, a Likud member, who chanted to the media a Jewish prayer: “Blessed be God for ridding us of his punishment” (“baruch sheptaranu me’onsho shel ze”).
God didn’t listen to Edelstein. Barak is back, behaving as he did in 2001 after he lost the elections to Ariel Sharon. Barak is reborn and ready to punish.


Barak Announcing Retirement He lives as a bodyguards’ prisoner
The Thunder of Silence

Businesses and Corruption

Isaac “Buji” Herzog
Global Corruption: Money, Power, and Ethics in the Modern World 
Barak achieved prominence as commander of Sayeret Matkal, the IDF elite commando unit. He was its commander during Operation Entebbe. After that success, his way to the top was clear. He was the IDF’s chief of staff between 1991 and 1995, when he attempted to create what he called a “small and smart” army.
Later, he served as Interior Minister in the Yitzhak Rabin government, and Minister of Foreign Affairs in the short-lived Shimon Peres government that followed Rabin’s state-staged assassination. In 1999, he was voted Prime Minister in Israel’s first, and only, direct election of prime minister, defeating Netanyahu in a landslide election. He won because he raised substantially more money than his American-supported opponent.
The rumors during the campaign proved true after the elections, leading to a lengthy police investigation of the “Barak Associations’ Affair” (Parashat Amutot Barak). The associations had been designed to bypass regulations on donations to political parties in Israel.
Isaac “Buji” Herzog is the son of Israeli President Chaim Herzog and the grandson of Rabbi Yitzhak HaLevi Herzog; he served as Government Secretary in the 1999 Barak government and currently is #2 in the Knesset’s Labor list.

Deeply involved in the Barak Associations’ Affair, he refused to give any statements to the Attorney General, who concluded in 2006, that there was enough evidence for Mr. Hertzog to be formally accused in court. The Police reached the same conclusion.

Before that, the State Comptroller found in 2000 that Herzog had “stepped on the rule of law with a heavy foot,” and that he was at the center of the illegal funding scheme. The Attorney General closed the case against him due to his silence.
Barak was saved, but his unbearable confusion between politics and businesses was exposed publicly.


Commando Equipment
Ehud Barak – A bad reputation as a hustler
During his army service, Barak was exposed to various products of Cyalume Light Technologies, an American company which provides unique products to the American Army, NATO, the IDF and others.
Sticklights is their best known product. Sticklights highlighted Barak golden path through Israel’s Ministry of Defense.
In the 1990s, Yaron Eitan, an Israeli living in the USA, established Geotek Communications, Inc. (NASDAQ:NNM:GOTK), a company dealing with missiles communications and related to RAFAEL (Israel’s Weapons Developing Authority).
He introduced Barak to Winston J. Churchill, main partner of SCP Partners; a few days after he lost the 2001 elections, Barak joined them as a partner. In 2007, this company founded an investments and holdings company named Vector in 2007; Barak was appointed one of its directors.
Yaron Eitan – An Israeli in America
In April that year, Vector raised 58 million dollars. Barak received 4.55% of the company, 93,750 shares worth then about $750,000.
In 2008, Vector purchased Cyalume Light Technologies for $120 million; the companies were merged and traded under the code CYLU in NASDAQ. By then, Barak was Minister of Defense in Olmert’s government.
When Barak became Minister of Defense, he resigned as director; attorney Doron Cohen, former Barak’s brother-in-law, replaced him in Vector.
This is on the verge of nepotism. Barak kept his shares, despite this company steadily losing value afterwards.

Nowadays, Eitan is deputy manager of Cyalume and holds 670,000 shares. Despite the company being registered in the USA, it is run by Israelis.



SCP Partners

Corporate-Level Strategy: Creating Value in the Multibusiness Company

Cyalume Sticklights
Death Waits in the “Dark” In August 2012, when Barak was still Minister of Defense, the ministry published a bid to supply the IDF with equipment produced by Cyalume. This time, the wording of this periodic bid was changed to include the words “of the same kind supplied to the US Army, or meeting the same standards.”
That army is supplied by Cyalume; thus the bid is what in Hebrew is called “sewn,” it was designed to meet the standards of a specific company chosen by the bid-issuing organization. Barak had a good reason for that, he was a shareholder of the chosen company. Outside Israel, this is known as “corruption.”
The bid was answered by the French offices of Cyalume, which had reported that 15 Israeli agencies had requested to represent it even before the results of the bid were published. Barak refused to comment on the issue to Israeli media, the State Comptroller received complaints but had published nothing yet. Israel
Police refuses to acknowledge the use of Cyalume equipment; yet, they love to stare at the sticklights’ phosphorescent green. It is so pretty!

The Business of War

Barak is a “shooshooist” (Israeli slang, “shoo” from “shhhhh!” but also from a “go away!” cry, “ist” from English; nickname for somebody related to intelligence work). As such, he is careful to hide tracks. After he became Minister of Defense, he gave the shares of his company Ehud Barak, Ltd. to his three daughters.
The company received millions of dollars after that for unknown services performed in previous years. In his 2011 Report, then Israel State Comptroller Micha Lindenstrauss wrote “these activities of the minister do not meet proper norms.”
Barak should have requested a permit from the Comptroller, by not doing that, “he blocked the possibility to comprehensively check his links and loyalties.” This is quite a harsh accusation towards a Minister of Defense; yet, Israel being (corrupt) Israel, nothing was done.

Yitzhak Rabin having been his mentor, Barak enjoys superb links in Israel, including senior businessman who were former Mossad agents; he is untouchable by the State.

Former Israel State Comptroller Micha Lindenstrauss
Barak is a “shooshooist.” On March 20, he founded Hyperion (EB) 2013, Ltd. The company has the same name as an American company which invested in the past in an Israeli fund bearing also the name Hyperion. There are no signs that Barak’s new company is related to any of them; Barak had not commented on the company’s activities.
The new company has only one owner, Ehud Barak, and is registered at Gindi Tower, 1, Shaul HaMelech St., Tel Aviv. That is the address of Barak’s luxurious home.
Netanyhau succeeded in removing his main opponent from the political arena. However, Barak has proven to be unable to differentiate between politics and businesses. Hyperion probably is a Netanyahu’s bypass path; a commando walking in the dark, Barak keeps quiet.

Editing:  Jim W. Dean


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Roi Tov is a graduate—among others—of Tel Aviv University and the Weizmann Institute of Science. In addition to his memoir, Tov is published in the Proceedings of the National Academy of Sciences, Molecular Physics and other scientific journals. He won various travel writing and photography awards. In his writings, he tries to reveal life in Israel as a Christian Israel Defense Force (IDF) officer—from human rights violations to the use of an extensive network of underground agents. He was recognized first as a refugee and subsequently as political prisoner of Bolivia.