Shady past haunts defeated candidate

An Israeli billionaire born in Russia has been defeated in the election to elect a new mayor of Jerusalem. Arkady Gaydamak’s candidacy proved rather controversial. Gaydamak, who is a businessman, a philanthropist and a founder of the Social Justice Party,

Some of his property has been confiscated because of unpaid debts, according to Russia’s website. The election was won by secular candidate Nir Barkat.

Gaydamak's business partners have accused him of defrauding them of between $US 365 and $US 400 million.

He dismisses the financial claims as 'fairy tales'.

He also says police have persecuted him because of his political success.

Arkady Gaydamak (Arye Bar-Lev) was born in 1952 in Moscow (though according to some, he was actually born in Berdichev, Ukraine).

In 1972 he repatriated to Israel but the next year left for France. He established a translation company there in 1976. In 1982 a subsidiary of the company was created in Canada.

He switched from the translation business in 1987 to concentrate on trading in the Soviet Union.

Gaydamak began selling oil equipment to Angola in 1992, where he established ties with the government, and obtained Angolan citizenship, later becoming an aide to Angola's Foreign Ministry.

Yet he’s often associated with illegally selling arms from former Soviet republics to Angola and the controversial settlement of Angola's debt to Russia.

Charges of illegal arms trade

In 2007, court hearings began in France for a notorious case later dubbed 'Angolagate' by the media. Forty-two people belonging to the French business and political elite had been charged with illegally selling arms to Angola in the nineties.

To the French prosecution, the chief offenders are billionaire Arkady Gaydamak and French businessman Pierre Falcone. The investigation into Angolagate started back in 2000. At the same time Arkady Gaydamak returned to Israel, which, in spite of an international arrest warrant, refused to extradite him back to France.

Both men are charged with supplying tanks, shells, bombs, helicopters and warships worth almost $US 800 million to Angolan President Jose Eduardo dos Santos from 1993 to 2000. They were bought to get the upper hand against insurgents in Angolan, even though a UN embargo prohibited military aid to the African state.

Prosecutors accuse Gaydamak and Falcone of illegally striking arms deals in France and bribing officials. Those who appeared in the dock include: Jean-Christophe Mitterand, the son of the former French President Francois Mitterrand; prominent banker Jacques Attali; and former French Interior Minister Charles Pasqua.

Arkady Gaydamak  AFP Photo / Gali Tibbon
Arkady Gaydamak AFP Photo / Gali Tibbon

If convicted, Gaydamak and Falcone could face up to ten years behind bars.

Allegedly, Arkady Gaydamak was the inspiration for an arms-smuggling anti-hero in the 2005 film 'Lord of War', starring Nicolas Cage.

Angola's debt to Russia

In the same time period from 1996-2000, Arkady Gaydamak became involved in settling Angola's $US 5.5 billion debt to Russia.

The sum was reduced to $US 1.5 billion as a result of a Russia-Angola agreement signed in 1996, according to which Angola pledged to pay the debt off by 2016.

This sum was divided into 31 installments of about $US 48.7 million each.

Former Russian Deputy Finance Minister Andrey Vavilov oversaw the agreement.

However, an offshore company 'Abalone Investments Limited', which was founded by Arkady Gaydamak, Pierre Falcone and Russian banker Vitaly Malkin, was entrusted to transfer Angolan money to Russia's Finance Ministry accounts. Russia received only $US 160 million.

Gaydamak says the debt was paid off in 2005.

Hapoalim scandal

Moreover, Arkady Gaydamak is linked with the scandal around the Israeli Hapoalim bank in 2005.

Police froze accounts in the bank holding millions of dollars, which were obtained, it is suspected, through laundering money from criminal activities.

Gaydamak was allegedly among the owners of the frozen accounts. Several weeks later Luxembourg's prosecutors had accounts frozen at Sella Bank Luxembourg in connection with the Hapoalim case. It is alleged that Gaydamak also held accounts there.

Charity & business

According to media reports, Gaydamak has French and Israeli citizenship and also Angolan and Canadian diplomatic passports.

He was decorated with several French insignia, including the highest French order – the Legion of Honour, for rescuing two French pilots from Bosnian captivity in 1995.

During the second Libyan War, Gaydamak equipped a camp for refugees, spending hundreds of millions of dollars. His philanthropic actions also include help to inhabitants of Sderot, who were subject to constant shelling from Gaza, an acquisition of bankrupt Bikur Holim hospital and money donations.

Gaydamak's investments in sports include the ownership of the Israeli football club 'Beitar Jerusalem' and the basketball team 'Hapoel Jerusalem'.

At the end of 2007, Israeli newspaper Maariv said that Russia's Embassy in Israel will move to a new building at Rothschild Boulevard in Tel Aviv and Arkady Gaydamak will allegedly be engaged in constructing the complex.