Friday, May 09, 2008

The Laundry Man

Morris Talansky, of course, is the suddenly famous American Jewish businessman who funneled hundreds of thousands of dollars to Prime Minister Ehud Olmert, currently under police investigation. The payments were made during Olmert's tenures as Jerusalem Mayor, and later as Minister of Industry and Trade, and were disguised as contributions made to the "New Jerusalem Foundation"*, a charitable organization founded by Olmert, and under his direct control. Talansky operated as the NJF's main U.S. contact and treasurer.

Who, exactly, is Morris Talansky, and whose interests does he represent? Well, among other things, Talansky is an ordained rabbi, with semicha from YU, and he served once in a pulpit position in Portland, Oregon. He later went into business, and became embroiled in many conflicts and lawsuits with his various associates. These conficts are marked by allegations of violent threats and extortion, and a review of the court records paints the picture of a shady loan shark that seems to be a character right out of an episode of The Sopranos. From the New York Times:

At least two of the lawsuits involving Mr. Talansky contain allegations that he or people he enlisted made threats in the course of collecting debts or resolving business conflicts.

He sued one of his accusers, Richard Penzer, for libel in 1995 in state court on the grounds that the accusations had jeopardized Mr. Talansky’s longtime job raising money for Shaare Zedek Hospital in Jerusalem. The case was settled three years later, when Mr. Talansky accepted $60,000 and a one-line apology from Mr. Penzer.

Initially at odds with Mr. Talansky over a real estate deal, Mr. Penzer had sent donors and officials associated with Shaare Zedek letters in 1994 asserting that Mr. Talansky had threatened him "with the expressed goal of extorting money".

Court records include a sworn statement from a police file, dated January 1992, in which a Long Island man said he had met Mr. Talansky one night at Scores, a topless bar in Manhattan, and tried to help him collect a debt from Mr. Penzer.

"He began to tell me about how he took a devastating loss of approximately $2.8 million in a real estate deal that went bad," the Long Island man, Michael Sciotto, told the police. "He was swindled and he described it as a setup."

The statement continued, "I told him I would talk to Mr. Penzer and see if I could shake him up a little and possibly could get Talansky’s money back."

In another lawsuit, Mr. Talansky sued a man who he said promised him "substantial interest at low or no risk" on a $300,000 loan he made in 1998 to the Forgotten Woman, a retail chain that went bankrupt three months after his loan.

After much litigation, the defendant, Frederick Schulman, prevailed in court on the fraud counts but also made a counterclaim accusing Mr. Talansky of sending "thugs" to collect money from him.

Mr. Talansky replied that he had sold the right to collect part of the debt to a third party and could not be held responsible. The judge rejected Mr. Schulman’s request for summary judgment on the extortion charge, but said he could pursue it in a trial. The parties eventually settled, according to a lawyer in the case.

Olmert and his sponsor, Morris "Laundry Man" Talansky

Using the "New Jerusalem Foundation" as a conduit, Talansky has been funneling money to Olmert for nine years. But Olmert isn't the only policitian Talansky has helped out: Over the last two decades, he has made generous financial contributions to the campaigns of Mayor Rudy Guilianni (Republican, 2000), President George W. Bush (Republican, 2003), Senator Edward M. Kennedy (Democrat, 1992), House Speaker Thomas S. Foley (Democrat, 1994) President Bill Clinton (Democrat, 1995). An equal-opportunity contributor, indeed.

In her written logs of Olmert's payments from Talansky, Shula Zaken, Olmert's personal secretary (recently placed under house arrest), refers to Talansky as "The Laundry Man".

So Talansky is a colorful charcter indeed: A money-laundering loan-shark Orthodox rabbi who uses thugs to "shake up" his creditors, who meets with his business associates in topless bars, and who took on the role, for nearly a decade, of Ehud Olmert's patron.

But there's more to Talansky than this, much more.

Morris Talansky is a founding partner, and a major shareholder, of ImageSat, an Israeli company that rents out access to spy satellites and their high-resolution images -- often to governments, for purposes of military intelligence. ImageSat is enjoined by an agreement with the Israeli Defense Ministry from selling access or data to Arab states at war with Israel, or to the "rogue states" of Iran, Cuba, and North Korea. However, Talansky and his group of fellow shareholders are anxious for a quick return on their investment, and are less than happy with these pesky restrictions. They have attempted to skirt the ban on sales to Iran by negotiating a deal with notorious Venezuelan strongman Hugo Chavez, a close ally of Iranian President Mahmoud Ahmedinejad. Chavez is a radical Marxist and anti-American, and like Ahmedinejad, has called for the destruction of Israel. Talansky's associate and fellow ImageSat shareholder Stephen Wilson began negotiating a large-scale deal with Chavez in 1999, and even moved to Venezuela in 2001. By 2002, he secured Chavez's interest in a multi-million dollar deal with ImageSat for spy satellite access.

But to the chagrin of Wilson, Talansky, and their fellow investors, ImageSat -- together with its parent companies, Israel Aircraft Industries and Elbit Systems -- balked at the deal for obvious security reasons. Enraged, Talansky and friends filed suit against ImageSat, in a bid to force them to provide Chavez with the spy data.

In the lawsuit, the investors also charge ImageSat with blocking similar lucrative deals they tried to make with Angola and Russia, also countries closely allied with Israel's enemies.

So while Talansky was fighting to circumvent Israel's security restrictions on ImageSat, he was also giving hundreds of thousands of dollars to Israel's Minister of Industry and Trade, Ehud Olmert. It will be interesting to see whether the ImageSat conflict plays any role in the current investigation and expected indictment.

To call Talansky a hilul Hashem would be a gross understatement. As an orthodox Rabbi who, at best, operates in the gray zone of the law, he is certainly an awful embarrassment. But Talansky is far more than just a loan shark with a yarmulkeh: He is a man who does not hesitate to place his own narrow financial interests over the interests of Israel's security and the survival of his fellow Jews. It's very easy to understand why Olmert chose the patronage of such a like-minded person.

* The media seems a bit confused about whether to refer to this organization as "The New Jerusalem Foundation" or "The New Jerusalem Fund". See here for details.

Wherever I am, my blog turns towards Eretz Yisrael טובה הארץ מאד מאד


Anonymous said...

How wonderful it is to pass judgment on someone based upon a few articles in the press.

בצדק תשפוט עמיתך

Until Talansky has the ability to respond to these allegations, they remain just that - allegations, and people with an IQ above 50 should hesitate before accepting the allegations as truth. For some reason, people prefer to believe every negative comment about others, in direct opposition to the way we should act.

Lurker said...

Talansky has filed a lawsuit against ImageSat for refusing to provide spy satellite access to Hugo Chavez.

This is a fact, not an unsubstantiated allegation.

YMedad said...

Friday, May 9 at 8:22 AM

Tuesday, May 6 at 2:18 PM

Now that's bringing you the news.

A resident of Shiloh is a second cousin of Talansky;s first wife and a good friend of mine from Portland recalls Talansky as too frum for the Orthodox schule there. Ha.

Anonymous said...

Sorry- need to correct you on another point- the "New Jerusalem Foundation" (until recently, certainly) was anything but phony. They assisted a lot of organizations across the city, and had some very good and honest people working there for many years.

Lurker said...

tafka pp: Sorry- need to correct you on another point-

What was the first point?

tafka pp: the "New Jerusalem Foundation" (until recently, certainly) was anything but phony. They assisted a lot of organizations across the city, and had some very good and honest people working there for many years.

There seems to be a great deal of confusion in the media regarding the name of the organization with which Talansky was affiliated. Some outlets, such as the New York Times, the New York Post, and the New York Sun, have been referring to it as "The New Jerusalem Foundation". Others, such as the Jerusalem Post and Haaretz, have been referring to it as "The New Jerusalem Fund". And others still, such as the Forward, have been using both names (sometimes in the same article!).

Both organizations seem to exist (or have existed), and both seem to have had web sites. However, the site of The New Jerusalem Foundation seems to have been reduced to a "currently being updated" notice, and the site of The New Jerusalem Fund seems to have gone offline entirely.

After a bit of investigation, I am pretty certain that the organization with which Olmert and Talansky worked was the Foundation, and not the Fund: Olmert's role as founder of the organization can be seen on Google's cache here and here; and Talansky's role as treasurer and contact in the U.S. can be seen here and here.

(I suppose that I shouldn't entirely rule out the possiblility that Olmert and Talansky operated using both organizations, the Foundation and the Fund.)

In any case, I appreciate your correction regarding the legitimate activities of the Foundation. The fact that Olmert and Talansky may have used the organization as a channel for money landering does not mean that the organization itself is phony, and I should not have made such an assumption. I have corrected the post accordingly.

Anonymous said...

Thank you Lurker :)

I think they're the same org. (I was only ever aware of one, established by Olmert: Maybe the confusion arose for the media as קרן gets translated as both, often. To the point that the "old" Jerusalem Foundation suffers the same referential problem.)

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