Shortly after Hamas attack on October 7, Prime Minister Benjamin Netanyahu appointed Gal Hirsch, as the government’s coordinator for the missing Israelis and hostages being held by Hamas in the Gaza Strip. At the same time, Hirsch was due to submit his response to a legal case being brought against him for alleged tax evasion totaling millions of shekels. Attorneys representing Gal Hirsch asked the court for a continuance, saying that their client had been “recruited to the national cause” because of the emergency situation Israel finds itself in. The prosecution agreed and the court approved a two-week postponement. So, just a few days after his appointment to the position, the highly sensitive mission that was entrusted to Hirsch has already clashed with a legal case in which he is the accused – and highlighted another problematic aspect of his controversial appointment.

That, however, is not the aspect of Hirch’s appointment that is raising eyebrows. Shomrim compared the company details that were leaked as part of the Panama Papers investigation to Hirch’s response to the indictment against him – and the findings raise serious questions about the defense’s arguments in court. These questions will be analyzed in detail later in this article, but, in broad strokes, the key argument being put forward by Hirsch’s defense team is that he was neither the owner nor a controlling shareholder in the foreign company that allegedly did not pay taxes on some of the money it received. Therefore, Hirch’s lawyers argued, he was not obligated to report it or its income.

According to documents revealed here, however, the company was established as a bearer company – one in which the name of the owner is not registered and proof of ownership is through the presentation of a physical document – and, one week later, Hirsch obtained power of attorney which granted him broad control over the company’s activities.

Millions from Georgia and a Years-Long Investigation

Brig.-Gen. Gal Hirsch left the IDF in late 2006, against the backdrop of the imminent publication of the findings of the Almog Commission, which examined the abduction of two Israeli soldiers, Udi Goldwasser and Eldad Regev. Hirsch was commander of the IDF’s Galilee division when the two soldiers were abducted in 2006, triggering the outbreak of the Second Lebanon War. After leaving the army, he launched a business career and, along with several partners, signed a deal with the government of Georgia in 2008.

An investigation into the deal was launched in 2015, after it became apparent that then Public Security Minister Gilad Erdan was planning on appointing Hirsch as police commissioner. Hirsch complained many times – with some degree of justification – that he was the victim of significant and unreasonable delayed justice in relation to the investigation and the indictment. After all, the probe was launched seven years after the deal with Georgia was signed and an indictment was only submitted in 2021 – some 13 years after the fact. If that was not enough, the indictment that was finally filed is a lot slenderer than the extent of the investigation would suggest and the allegations that were probed. According to the indictment that was eventually filed, Hirsch and his partners earned more than 6 million shekels ($1.5 million) from the deal with the Georgian government. According to the prosecution, Hirsch transferred that sum to a bank account in Switzerland, without declaring it and with the intention of concealing details of the transfer from Israeli tax authorities. Also named in the indictment are Hirsch’s partners: Oded Shachnai, who was convicted as part of a plea deal, whereby he admitted tax evasion and was sentenced to nine months community service and a fine of 900,000 shekels ($225,000), and Mikhail Benimini.

At the center of the indictment is a Panamanian company called Templeton Team SA, which was the owner of the Swiss bank account into which the majority of the aforementioned money was transferred in 2008. The question of control over that company is a key element of the case since it determines who is responsible for reporting to the relevant tax authorities – and it also speaks to knowledge of what was done with the money.

The prosecution claims that Templeton was controlled by Hirsch and that the former general failed to report that fact to authorities – or his income from the company. According to the indictment, when Hirsch “withdrew” some of the money that had been paid by Georgia – around 3.3 million shekels ($825,000) – he did so via a different company he owned, which is registered in Israel, despite the fact that it had no connection with the deals. In addition, according to the indictment, he did so in a different tax year – 2009 – which allowed him to deduct expenses totaling around 860,000 ($215,000) from his tax payments.

Hirsch strenuously denies the allegations. Earlier this year he submitted his defense through attorney Navot Tel-Zur and in the very first sentence of the documents he claims that “the main gap between the allegations contained in the indictment and the defense’s position is the refuted argument (…) that Hirsch allegedly controlled Templeton.” Later in the document, the defense explains that “in fact, it was a company that was owned and controlled by Hirsch’s late father, Yitzhak Hirsch [who passed away in 2011 – U.B.] and Hirsch was not obligated to report money received by that company.”

To drive home the point, the defense described the business activities of Hirsch’s late father, explained that Templeton was used to receive money for a variety of reasons – including security-related reasons – and reiterated, this time with key words underlined, that “Templeton was under the exclusive control of the late Yitzhak Hirsch and was not under the control or ownership of Gal Hirsch.”

With regard to the 3.3 million shekels that was transferred from Templeton to Hirsch’s Israeli company, the defense argued that this money was part of his income and that he paid all due taxes on it in Israel. The remainder of the money that came from Georgia was transferred, according to Hirsch, to his business partners and to another company owned by his late father. With regard to the other charges, the defense argued that the Israeli company through which the money was withdrawn received the funds in 2009, which meant that it was reported in the correct text year.

70 Mentions in the Panama Papers

Three years ago, journalist Simona Weinglass revealed on the Times of Israel website that Hirsch and other executives were mentioned in the Panama Papers as being connected to a number of different companies, including Templeton. These companies, according to the report, were set up in 2008 by Panamanian law firm and corporate service provider Mossack Fonseca, from which an anonymous source leaked 11.5 million documents to the German newspaper Süddeutsche Zeitung. Several years later, the companies were all transferred to the administration of Union Bancaire Privee in Geneva, a private Swiss bank.

Shomrim obtained the leaked documents relating to Templeton and analyzed them in light of Hirsch’s legal team’s response to the indictment. Templeton was first mentioned on January 25, 2008, when Mossack Fonseca submitted a request to register it as a company. It was established by issuing bearer shares – a system that has since been banned in most of the world, whereby the shareholder is not listed by name but proves ownership of the shares by means of a physical document. In other words: the owner of Templeton never wanted his name to be registered and he remained anonymous.

Just six days later, according to the document, Hirsch was given comprehensive power of attorney giving him control over the company’s activities, as well as the right to act on its behalf. The power of attorney granted Hirsch the right to “manage the corporation without any limitation,” to act as a signatory on contracts on the company’s behalf, to borrow and lend money, to manage its bank accounts, to represent the company in any country in the world, to make appointments and so on. It should be noted that Hirsch’s late father is not mentioned in any of these documents.

Shomrim contacted Hirsch’s attorneys and asked them to explain how these documents fit in with his claim in court that he did not control the company. They responded by saying that “Gal Hirsch’s response to the indictment, as submitted to the court, speaks for itself. We do not see any point in addressing in the media the same contentious issues and evidence that will soon come out in court.”