Two American billionaires, known to be among the funders of the conservative Kohelet Policy Forum, used an investment fund they own to invest in eToro – the Israeli social trading and multi-asset investment company – in which Economy Minister Nir Barkat and his family have holdings (under blind trust) valued at hundreds of millions of shekels. Barkat, considered one of the politicians most closely aligned with Kohelet, boasts about his support of the forum and was aided by it in drafting policy papers. Thus far, even though it has been around one and half months since the new government was sworn in, Barkat is yet to hand over the conflict-of-interest declaration that he is obligated to sign as a minister in the government.

The two Pennsylvania-based billionaires – Arthur Dantchik and Jeff Yass – are known for their libertarian views. Over the years, they have given generous backing to organizations and candidates who share their worldviews in the United States. An investigation by Nettanel Slyomovics published in Haaretz in March 2021 revealed that they were responsible for most of the funding of the Kohelet Policy Forum, which, in that year, was the beneficiary of donations of more than 25 million shekels ($6.7 million today). Dantchik and Yass never confirmed that they had made these donations. There has been much talk recently about the Kohelet Policy Forum’s influence over the Israeli political map and the government’s plan to enfeeble the judicial system.

In addition to the influence the two billionaires wield over Israeli society and democracy through Kohelet, they also have business interests in the country. They jointly hold at least some of the ownership of an investment fund called Susquehanna International Group (SIG). The group’s investments in Israel are managed by Amir Goldman, an Israeli who now lives in Pennsylvania, via a company called Susquehanna Growth Equity (SGE), which was co-founded by Dantchik and Yass. Before joining SGE, Goldman worked for the BRM Group, founded by Barkat and his brother, Eli. SGE is the company which holds shares in eToro.

SGE has several employees in Israel and according to its own publications, it invests anywhere between $5 million and $100 million in Israeli high-tech ventures. Following its investments in a company, SGE appoints a new board or observers acting on its behalf within its invested company.

In February 2022, eToro submitted its last report to the U.S. Securities and Exchange Commission. The company was valued at that time at around $8.4 billion. BRM held over 8 percent of the company’s shares, valued at about $670 million – while Barkat himself held around one-third of those shares.

Barkat’s Holdings

In October 2021, as part of the Pandora Papers project, Shomrim revealed that, until 2019, Barkat held shares in eToro via the Virgin Islands, a well-known tax haven. Barkat held the shares in two different ways: via an Israeli company called Nir Barkat Ltd. And through his holdings in BRM. In February 2019, Barkat ran in the Likud Party’s primary; two months later, he was elected to the Knesset. Some six months later, in late November 2019, he transferred his shares in various companies to his brother by means of a blind trust. At the time, Barkat was asked how “blind” a trust can be if it is managed by his brother. His spokesperson said that “blind trusts have well-established legal parameters. Eli Barkat acted in accordance with the law as the trustee in his brother’s blind trust.”

Either way, 2021, the year that SGE invested in eToro, was a highly significant year for the company since it was supposed to go public with an IPO on the NASDAQ stock exchange following a planned merger with SPAC. The value of the IPO was estimated to be over $10 billion. In the end, the IPO failed and the company’s value plummeted.

In February 2022, eToro submitted its last report to the U.S. Securities and Exchange Commission. The company was valued at that time at around $8.4 billion. BRM held over 8 percent of the company’s shares, valued at about $670 million – while Barkat himself held around one-third of those shares.

As a politician, Barkat has very close ties to the Kohelet Policy Forum, which, as already mentioned, is generously funded by Dantchik and Yass. Last week, Shuki Sadeh, writing in Shomrim and TheMarker, revealed that Kohelet funded policy papers – written explicitly to help Barkat – to the tune of 1.3 million shekels ($350,000). The report also revealed that Barkat and the Kohelet Policy Forum have a long history of collaboration in the framework of external bodies. In May 2019, for example, the ‘Let’s Grow Israel’ initiative was launched. It was headed by Michal Shalem, another close associate of Barkat, who worked with him at Jerusalem Municipality and benefited from funding from Kohelet.

In another case, Barkat even confirmed to TheMarker that he raised around 1 million shekels for Kohelet to fund research by Harvard economist Prof. Michael Porter, who has been something of an ideological mentor for Barkat in recent years. According to the report, in November 2020, Barkat unveiled an ambitious plan to increase the size of settlements – a plan that was, in fact, written by Kohelet. In response to questions about these incidents, Barkat responded by praising Kohelet and stressing how proud he is to work with the forum.

Barkat has not yet signed his conflict-of-interest agreement as economy minister, and Shomrim has learned that, as of last week, he has not even sent his conflict-of-interest questionnaire to the Justice Ministry, even though he is supposed to make every effort to do so within 30 days of assuming ministerial office.

Barkat: There’s No Conflict of Interest

The rules governing conflicts of interest for ministers state that, “a minister is obligated to conduct his affairs in such a way that no conflict of interest is created and no conflict of interest exists between fulfilling his or her role as a minister and his or her personal affairs.” Like every minister in the government, Barkat is obligated to sign a conflict-of-interest agreement, however, because of his and his family’s financial interests, it seems that it is especially important in this case – at least in terms of public perception.

Barkat has not yet signed his conflict-of-interest agreement as economy minister, and Shomrim has learned that, as of last week, he has not even sent his conflict-of-interest questionnaire to the Justice Ministry, even though he is supposed to make every effort to do so within 30 days of assuming ministerial office.

Shomrim asked Barkat whether, as a minister, he does not see any problem with the fact that his holdings as a businessman are being invested in by the very same people whose ideology and proposals he is advancing by means of his cooperation with the Kohelet Policy Forum. Moreover, he was asked about the fact that he has yet to submit his conflict-of-interest questionnaire to the attorney general.

In response, Barkat’s office issued the following statement: “Minister Barkat is proud of his important cooperation with the Kohelet Policy Forum, which is one of the most important policy think tanks in Israel. Your attempt to intimidate elected officials from cooperating with Kohelet will not succeed. In response to your questions, we stress that there is no conflict of interest and, in any case, Barkat will soon submit a detailed conflict-of-interest agreement in full accordance with the law.”

Goldman, SIG and SGE did not respond to requests for comment.