February 22, 2007 (the date of publication in Russian)

Roman Bessonov


A brawl over a refinery reopens Pandora’s boxes in the Mideast


When issues of property collide with issues of ideology, it is hard to avoid a misunderstanding. When economic reforms are implemented by an unpopular government, any privilege arouses suspicion.

On February 6, the Israeli Knesset was shaken by a new political scandal with a business background. Nessim Zeev, MP from the religious Shas Party, demanded that contenders for strategic industrial assets testify on the criminal background of their shareholders.

Nessim Zeev was speaking about the largest Israeli refinery, located in the ancient Haifa. The state of Israel, after years of hesitation, decided to privatize oil industry – originally developed on the principle of state ownership of major means of production only in the aftermath of the misfortunate war in Lebanon. The process started from a smaller Ashdod Refinery, estimated originally in $200mln, but eventually sold for a four times larger price to Paz Corporation, co-owned by Zadik Bino and the Ben Shah family.

Officially, Israel’s refining facilities were welcome to foreign investors. The Shanghai-Honkong Banking Corporation, a major British bank with a controversial history, surfaced as the only available creditor. Foreign corporate contenders were also not numerous, and (naturally) ex-Soviet. The bid of Kazakhstan's State Petroleum Corp. for Haifa Refinery was rejected, as well as the earlier claim of a private Russneft Co. for Ashdod.

Russneft, a company owned by prominent Russian (ethnic Ingushi) banker Mikhail Gutseriyev, encountered suspicions of various kinds. At first, Israeli media confused the name of his company with the state-owned Rosneft, which had reportedly played a fatal role in the persecution and collapse of Yukos – whose former president, now convicted felon Mikhail Khodorkovsky, was an object of popular sympathy in the Israeli community. Meanwhile, state officials, scrutinizing the background of the real contender, Russneft, frowned at Mr. Gutseriyev's "too excessive activity" in Arabic countries.

This superstition did not sound sincere at all. As a matter of fact, Israel's major source of fuel today is Egypt. Political, as well as major geographical circumstances do not provide a broad choice for the Jewish state. Moreover, the whole history of Israeli refineries is associated with Arabic oil. Obviously, the biased approach towards post-Soviet contenders had a political aspect. One more proof is the decision of the auction authority to reject the bid of Israeli citizen Arkady Gaidamak, who also chairs the Confederation of Russian Jewish Communities. During the Haifa contest, Gaidamak's name surfaced in an official Israeli request to Interpol Russia, which appeared to be fake. Some analysts recognized this as a parallel development, rather associated with Russian diamonds than with Israeli chemicals. Still, Gaidamak's reputation of a "too close friend" of the official Moscow definitely undermined his prospects.

By early February, the selection of bidders revealed three most advantageous contenders for Haifa: Lev Levaev's Israel Africa Corp., Ofer family's Ha Havra le-Israel Group, and Mefalim Petrochemiyim, a holding chaired by David Federman. The latter company was a part of a larger industrial and trade conglomerate, Modgal Ta'asiyot, with a 26% stake officially owned by three recent Russian citizens – Leonid Nevzlin, Mikhail Brudno, and Vladimir Dubov. All of the three were once major shareholders of Yukos, and all they are under criminal investigation in Russia.

The halo of the former partners of "political prisoner" Khodorkovsky was supposed to only benefit the trio of newly adopted citizens of Israel, whom the historical motherland happily rescued from Putin's "dictatorial" persecution. Leonid Nevzlin developed a massive organizing and monetary effort to portray himself as a patriot of this new motherland, disbursing millions of dollars for the Museum of the Diaspora, for the Haifa-based Association of Young [Russian-speaking] Journalists, for sponsorship of international oil and energy symposiums in Israel, and even for an institution for research in East European Jewry (conveniently cooperating with a similarly named institution in Moscow).

However, the generous newcomers displayed a style of management, typical for Russia of early 1990s, and especially for Western Siberia, the playground of Yukos's astounding success in the era of Boris Yeltsin. Leonid Nevzlin's managerial style was questioned first by the trade union of the Diaspore Museum, where the new owner decided to introduce a drastic layout. Months later, Nevzlin's name surfaced in an international investigation, focused on money laundering through a number of accounts in Bank Hapoalim. In this scheme, Israel was only a half-way station, the suspicious money eventually converting in real estates in Spain. Thus, Nevzlin's charity appeared to be the back side of his own capital export schemes, involving his local "disciples" in the "gangster Russia" style of business. The same was true for Modgal, where the trio "indirectly" purchased not a quarter but a control stake – at least, according to, a website reportedly associated with Nevzlin.


Like most of Israeli businessmen with Russian background, Leonid Nevzlin used political arguments in economic elbow-pushing. In public, as well as in the business community, he featured himself a more devoted patriot of Israel than the (unpopular) Prime Minister Yehud Olmert. Mr. Nevzlin accused the government of "unacceptable concessions" to Hamas Party in Palestine, also intervening into Olmert's Russian diplomacy.

Mr.Nevzlin's hatred to Kremlin was no secret. His emotions of an expropriated owner could be better understood if he were more scrupulous in his connections with other sworn enemies of Moscow, which comprise a rather controversial bunch.

Nevzlin's testimony on his connections with former Russian spy Alexander Litvinenko, who died from an isotope poisoning in London, aroused ambiguous response. Part of the Israeli audience could not share Mr. Nevzlin's sympathy with the kin of Ahmed Zakayev, ex-member of a radical Islamic secessionist government of Chechnya; radioactivity, detected by Scotland Yard in in Mr. Zakayev's auto, raised more questions to the circle of Nevzlin's friends in London. Meanwhile, Palestinian media raised suspicions over Mr. Nevzlin's involvement in the death of PLO Chairman Yasser Arafat.

The version of conspiracy, published by website, could be regarded as a banal anti-Israeli insinuation if it did not contain a number of Arabic names either. The authors of the sensational material, published on February 16, hinted at some personal connections between Leonid Nevzlin and Israel's ex-Defense Minister Shaul Mofaz, and the latter with Muhammad Dahlan, an influential figure in the Palestine National Autonomy. Weeks before Arafat's death, Dahlan visited London, reportedly borrowing an ampulla with toxical isotope – which (in a much smaller dose than in the case of Litvinenko) supposedly brought Arafat to the grave.

It is true that Arafat, after unsuccessful attempts of treatment in Paris, was buried in a coffin of concrete, as typical for radionuclide poisoning. It is equally true that Muhammad Dahlan's relations with Arafat deteriorated months before PLO Chairman's death; their political allies even got involved in internal armed clashes, though Arafat and Dahlan belonged to the same Fatkh Party. At that time, a number of Arab and Israeli media suggested that Dahlan was trying to gain Western support for overtake of power in the future state of Palestine.

Regarded in the Arabic community as a highly controversial, supposedly heavily corrupted figure, Muhammad Dahlan still possessed a sort of exceptional diplomatic duties, especially vis-à-vis Syria. In the PNA administration, his closest partner was "financial director" and Arafat's advisor Muhammad Rashid. The new PNA President, Mahmoud Abbas, was reported to be highly dependent from both Dahlan and Rashid, and unsuccessfully tried to get rid of the relevant burden of obligations. Dahlan's figure emerged as a major obstacle in the negotiations on the coalition government, as all the leaders of Hamas, the legitimate winner of the parliamentary elections in Palestine, were categorically opposed to his engagement in the government.

According to, Leonid Nevzlin, who emigrated to Israel a year before Arafat's death, was introduced to then-Defense Minister Mofaz by ex-Foreign Minister Nathan Shcharansky, a former Russian liberal dissident with doubtful business connections in Israel and Russia. Shortly before Ehud Olmert's trip to Russia, Mr. Shcharansky unexpectedly decided to withdraw from Israeli politics. Could he be trying to alienate from doubtful political deals in which he was dragged by his old anti-Soviet instincts?

Rumors of certain common interests, associating Leonid Nevzlin with Mohammad Dahlan, were quite consonant to Nevzlin's anti-Hamas stance, surprisingly rabid for a business figure. The fugitive Yukos's shareholder was especially furious over Kremlin's connections with the Syria-based Hamas leader Haled al Mashaal.



It was not an occasion that Nessim Zeev, MP identified Haifa Refinery as a strategic facility. That is clear for the Israeli expert community, though the background is not today elaborated in national media.

Three and a half years ago, on the eve of the US intervention in Iraq, the role of Haifa as an oil product- exporting port was vividly discussed by major Israeli papers and agencies. This discussion was focused on the prospects of reconstruction of a major oil pipeline, connecting the oil deposits of Northern Iraq with Haifa. The Kirkuk-Mosul-Haifa pipeline, originally opened in 1932, is out of function since 1948 – the year when the State of Israel was established. The pipeline's modernization required huge capital investments, its transit capacity not exceeding 100,000 barrels a day. However, the US plans to overthrow Saddam, in 2002 definitely included in Washington's agenda, turned a huge geopolitical temptation for Israel. Direct delivery of oil from Kirkuk would allow Israel to get rid of permanent dependence from Egyptian gas.

The dysfunctionate pipeline, on its way from Iraq, crosses the territories of two more countries – Syria and Jordan. For years, diplomacy with the closest neighbors was a privilege of he leftist Avoda (Labor) Party. Already in summer 2002, Amram Mitzna, Mayor of Haifa, is unexpectedly elected Avoda's chairman. The party establishes partnership with the newly- founded Shinui Party; the ranks of the leftists are joined by professional intelligence veterans like Denny Ya'atom and Amnon Lipkin-Shahak.

Shinui's Yosef Paritsky, in his capacity of Minister of Infrastructure, pays a visit to Amman days after the US intervention in Iraq, planning also to achieve direct support for the project in Washington. However, by that time the project fascinates rightist politicians as well., a conservative intelligence-linked website, assured its audience of the project's success in the nearest years – with reference, definitely, to US colleagues, namely to Colonel Scott Feil, who was reportedly going to supervise the post-war reconstruction of Iraq.

Exactly in this period, Avoda's political battle with the rightist Likud has acquired a form of a ruthless "compromat war". At the peak of the campaign, Amram Mitzna was exposed of having received donations from Reiss brothers, sentenced for drug trade in the United States. In their turn, the opponents highlighted Ariel Sharon's own shadowy background, including business partnership between his two sons and PNA ministers Muhammad Rashid and Muhammad Dahlan. This business involves not industry but exceptionally entertainment, namely, a network of casinos spawned on the territory of Palestine, conveniently free of control from the vigilant Rabbanut.

Due to his glorious background, Ariel Sharon was still successfully elected. His success only increased tensions in the Palestinian autonomy, predetermining public disappointment with Arafat's Fatkh, in favor of its rival Hamas. With no regard of this perspective, the business elite conveniently reaping its rewards, anticipating new profits from oil transit along with Palestinian financiers. Who else but Muhammad Rashid, an ethnic Kurd, would be entrusted unofficial talks on the pipeline's revival with the new administration of Kirkuk and Mosul? Consider Colonel Feil's promise, yet in autumn 2002, that as soon as "democracy" is established in Iraq, this state will be separated into three parts – thus, Israel's potential negotiation partner becoming not the sunken Baghdad but a sovereign Kurdish administration of Northern Iraq.

However, the subsequent development in Iraq clouded the dream of transit. The sweet forecasts of Colonel Feil, a former tankman, now employed with a company specializing in imitative warfare technologies, appeared to be as unreliable as those of Tom McInerney, the retired deputy commander of the US Air Forces.

McInerney, visiting Israel in autumn 2002, looked quite serious, telling that the United States are able to defeat Iraq in three days. His flight-forward romantic post-intelligence audience has got a short memory: exactly in four years, the same website fascinated the readers with McInerney's fantasy of a three-day overtake of Iran. By that time, McInerney's close colleague and co-author from the Special Forces, Gen. Paul Vallely already become a laughing-stock as a participant of semi-occult hypnotic experiments with humans and beasts (see John Ronson’s "The Men Who Stare at Goats").

Illusions were as far from reality as cartoon graphics from a real battle. The same was true about the attitude of the Iraqi population to the US "liberators from dictatorship", as well as the readiness of the new Iraqi government to follow any whim of Washington's in-vitro battle designers.

On July 16, 2004, days after the mayor of Mosul was assassinated by unidentified terrorists, Iraq's Prime Minister Ayad Alawi officially announced that the Mosul-Haifa pipeline project is beyond discussion. This statement was greeted by Turkey, whose strategists relied upon oil transit along the rivaling Kirkuk-Yumurtalik route to the Mediterranean.

Still, the neocon romantics were not going to give up their fantasies. The ascent of controversial Kurdish leader Jalal Talebani to the post of Iraq's president personified a still existing opportunity of the multi-billion Kirkuk-Mosul-Haifa project. In December 2006, despite interference from US Secretary of State Condoleezza Rice, Israel resumed backdoor diplomacy with Syria. As the subsequently leaked documentation revealed, Ariel Sharon's ministers had reached an agreement on the division of the Golan Heights.

Ariel Sharon, whose tank division once forced the Suez Canal, could hardly promise the strategic heights to the "rogue" Damascus "for free". The secret deals with Syria suggested a large-scale exchange. During the last five years, the rosy dream of Haifa's unique transit role, fascinating the powerful business community behind both rightist and leftist political establishment of Israel, was looming above the whole sequence of shadowy diplomacy, the closure of Jewish settlements, and the construction of the wall separating peoples.

From this viewpoint, it is not surprising that the demand of Eretz Israel's retreat to the borders of not 1067 but already 1949 was made public by a reputed moderate like Muhammad Dahlan. It is not surprising that Fatkh's chairman Mahmoud Abbas rejected the conditions of ceasefire, which an ostensibly harsher Hamas was ready to sign. It is similarly quite natural that in his trip to Damascus, Mahmoud Abbas was accompanied by Rashid and Dahlan. The long-time demagogy of "territories for peace" revealed a truly materialistic deal: "a kingdom for a pipeline".

The fact that the Kirkuk-Haifa project is still a point of high-level agenda, is evident at least from the advertising materials of the Russian-Israeli Center of Scientific- Technological and Innovative Cooperation, co-founded in October 2005 by a Moscow-based State Academy of Innovations (GAI). An advertising poster, surfacing in 2006 on the Center's website, displays a Russian-designed seismic monitoring system which "can be used for industrial security control of the cities of Haifa and Ashdod, as well as in the process of construction of the Mosul-Haifa oil pipeline".

Was GAI's Director, Prof. Sergey Kondratiev, aware of the bids for Haifa Refinery when his colleagues were visiting Israel? Were his business partners from Northern Galilee aware of Muhammad Dahlan's territorial conditions?

In autumn 2002, when Infrastructure Minister Yosef Paritsky officially launched the promotion effort for the Kirkuk-Haifa project, Russian oil and energy websites expressed anxiety over its prospects. Naturally, Russia's Gazprom would prefer to replace Egypt as a supplier of gas to Israel, along the new stage of the Blue Stream submarine route – which would not contradict to the interests of Turkey as a transit country. However, a competition of clans, involving also the scientific community, exists not only in Washington and Jerusalem but in Moscow as well.


Next day after the scandalous protest, filed by Rabbi Nessim Zeev, the self-declared major shareholders of Modgal Ta'asiyot materialized in Washington, at the US President's Prayer Breakfast at Hilton Hotel. An international warrant, filed by the General Prosecutor of Russia, did not prevent Leonid Nevzlin, Mikhail Brudno and Vladimir Dubov from involvement in the prestigious annual event.

The tradition of the National Prayer Breakfast was initiated by president Dwight Eisenhower as long as in 1953. Still, the event acquired a special significance decades later – after George W.Bush endorsed his notorious Faith-Based Initiative.

Since 2000, when a global panic over the hyped Y2K problem matched into eschatological obsessions of millennarist sects, the Presidential event hosts a multitude of international preachers, heavily involved in geopolitical string-pulling. The supposed dialogue of beliefs has transformed into a barely instrumental influence-pushing gathering, where corporate wheeler-dealers easily find common language with would-be political leaders – who, in their turn, achieve convenient blessing from the new-fashioned charismatic gurus. As documented by a number of authors, the so-called "color revolution" design, practiced across the globe from Ukraine to Lebanon, involved a formidable contribution from charismatic sects.

In Russia and Ukraine, relevant sectarian groups, heavily engaged in neo-Protestant proselitism, openly endorse political opposition to resp. Vladimir Putin and "Russian asset" Victor Yanukovich. In Israel, the flight-forward charismatic community, most typically expressed by the eschatological brand, is obsessively focused on the idea of reconstruction of the Temple of Jerusalem, frequently providing an ideological justification of the subsequent ordeal the Jewish people are supposed to undergo (those who save, supposed to convert into the “only true” Protestant faith). The mother country of charismatic sectarianism, the United States, is definitely not to be blamed is a new massacre sparks a "useful" Day of Judgment. On the contrary, a number of millennarist authors associated the doomsday impetus with... Russia (

The competition for the Haifa Refinery coincided with a dubious effort of a bunch of "private entrepreneurs" to launch an ostensibly archeological research at the Temple Mount – the very place where Ariel Sharon rallied days after his election as Prime Minister for reasons, which from today's viewpoint could hardly be interpreted as patriotic.

Not accidentally, the Washington-based army of postmodernist-fashioned preachers and Apocalypse-mongers is popularly dubbed "new crusaders". This army is going to gain even a larger dimension in a potential US Democratic State Department, especially in case the presidential race will be won by Barak Obama, a favorite child of the charismatic community – to the benefit of its expanding parish in Russia, which is openly expressing sympathy to the same apologists of "colored revolution" who enjoy financial support from Leonid Nevzlin & Co.

Still, it is the region of Middle East which is going to become the major battlefield of the first decade of the new century. One piece of evidence is that Mr. Nevzlin and his cronies appeared at the last year’s Prayer Breakfast in the company of Ariel Sharons son Omri, Muhammad Rashids partner in casinos and geopolitics.

The ancient fortifications of Mosul and Haifa remember the times of the historical Crusaders. Mosul was the major stronghold of the Moslems in their resistance to the crusader armies; from here, the legendary Atabek Imad ad Din al Zanghi started his march to Damascus, later conquering the rebellious Kurdish tribes.

The economic interest, which has once sparked the Crusaders' campaigns, is as everlasting as the attempts of the mankind to find a higher determination of human existence. Wars have emerged as a continuation of policies with other means, while policies emerged as a continuation of ideology.

History repeats itself – unfortunately not always as a farce, but sometimes as a tragedy of a larger scale. Though a ton of oil may be as precious today as once a handful of pepper, today's means of mass destruction far surmount the ancient times in the order of devastation and casualties.

The failure of millennarist anticipations of the Day of Judgment has not prevented fellow preachers from new doomsday promotion efforts. Gurus divide in forecasts, but a valid historical fact is that the period when Kirkuk-Haifa pipeline was out of function, is as long as the existence of the State of Israel. A coincidence or not? Ask a local Rabbi or Mufti before listening to a preacher from Washington, D.C.

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