The New Jersey scandal could hurt Israel's Shas party

By Anshel Pfeffer, July 30, 2009

The arrest of leaders of the Halebi community in New York and New Jersey sent shockwaves through the Sephardi Orthodox party, Shas, in Israel.

While numerically the Halebis are one of the smaller Sephardi groups, their financial clout is inordinate.
Rabbi Ovadia Yossef and other Shas leaders have regularly visited the Halebi communities in New York, Sao Paolo and Mexico City to give sermons and fundraise.

Rabbi Ovadia has been close to the community for over six decades. While he was born in Baghdad, his late wife, Margalit, was the daughter of a respected Halebi family.

Halebi philanthropists donate huge sums to a wide range of philanthropic causes, but the yeshivahs and religious schools under the aegis of Rabbi Ovadia have long been a favourite cause.

The rabbi and his family have also personally enjoyed their largesse. Since he retired from the Chief Rabbinate in 1984, Rabbi Ovadia’s Mercedes and driver are paid for by a Halebi businessman and the imposing Yahave Da’at Beit Midrash in Jerusalem, headed by his son Rabbi David Yossef, was built with Halebi money.

According to Israeli television, Solomon Dwek, the FBI’s chief informant, asked David Yossef to help him launder a cheque for $25,000, but Rabbi Yossef declined.

Many Halebi tycoons have also donated to Shas and other Israeli parties. Former Shas chairman Arieh Deri, now planning his political comeback to political life, recently returned from a fundraising trip in the US where he mainly visited the Halebim. The community’s unofficial leader, Jack Avital, is close to Mr Deri and to many Likud leaders.

Many of the rabbis who serve the Halebis in the US are handpicked students of Rabbi Ovadia.

“We don’t believe that these rabbis were actively involved in money-laundering,” says a source close to the Ovadia family. “We think they were arrested because many businessmen seek their guidance as to which Israeli institutions to give money to. This will certainly effect our fundraising but I don’t think it will be a mortal blow as there are so many Halebim who are donating huge sums. They won’t stop because of this.”

Last updated: 4:50pm, July 30 2009