Israel's richest rabbis become savvy businessmen

[July 13, 2012]  NETIVOT, Israel (AP) -- One summer night, on the outskirts of a sleepy desert town, a who's who of Israel's elite gathered for an annual feast to honor a rabbi whose gaze is said to pierce the soul.

He's Rabbi Yaacov Israel Ifargan. But he is better known as, simply, the X-ray.

Over the past few decades, he and dozens of other rabbis have carefully positioned themselves at the fulcrum of Israeli power and influence. They have attracted throngs of adherents -- most notably some of the country's top business moguls, who pay top shekel for an audience with their rabbi to solicit blessings and discuss business matters.

These magnates have helped fuel the rise of a rabbinic aristocracy whose members have channeled the donations they receive into multi-million-dollar empires. After gaining experience dishing out advice to Israeli tycoons, the rabbis have become shrewd businessmen themselves, managing hefty investments in stocks and real estate at home and abroad -- with much of their earnings allegedly kept far from the watchful eyes of Israeli tax collectors.

Their chief critic calls them swindlers and frauds, and some fellow rabbis are critical of their practices.

The Israeli edition of Forbes magazine published a first-of-its-kind ranking last month of Israel's 13 richest rabbis. In the number one spot was 36-year-old Rabbi Pinchas Abuhatzeira from Beersheba, a blue-collar southern desert city, whose wealth is estimated at $335 million. The X-ray rabbi placed sixth, with an estimated net worth of $23 million.

"Every single shekel brings about true peace," announced the X-ray rabbi's half brother, Rabbi Hayim Amram Ifargan, from the dais at the recent gathering, in a gentle nudge to the crowd of VIPs to continue their support.

He, too, is a part of the Ifargan family franchise. His spiritual adherents call him "The MRI." In the women's section behind a laced divider sat "The Arbitrator" or "The CT," Ifargan's millionaire sister Bruria Zvuluni, a go-to spiritual counselor who claims to have mediated feuds between Israeli crime kingpins. Though she is not a rabbi, she made it to the bottom of Forbes' list.

Cozying up at Ifargan's long table were lawmakers, one of Israel's top lawyers, and two of Israel's wealthiest businessmen: Menahem Gurevitch, chairman of a leading Israeli insurance company, and billionaire Nochi Dankner, head of Israel's largest holding company and a close confidant of Ifargan for the last 14 years. The Israeli army's chief rabbi and a top police commander were there, and Prime Minister Benjamin Netanyahu sent his blessings in a recorded video message.

Rabbis who make fortunes for themselves and encourage others to make money with their blessings draw the wrath of some fellow Jewish clerics.

"It's disappointing when religion descends to this," said Rabbi Donniel Hartman, president of the Shalom Hartman institute, a modern Orthodox Jewish learning center in Jerusalem. "It's not some channel of divine power for personal wealth accumulation. That's small religion."

Most rabbis in Israel are not raking in millions. They are instead salaried government employees, assigned by Israel's official rabbinate to perform religious rites for the Jewish public such as marriages and burials, or to enforce Jewish dietary laws in restaurants and hotels.

They are nowhere near the level of the high-flying spiritual gurus like the X-ray.

Such gurus set up public office hours in their homes to receive Israelis on all rungs of the social ladder, as long as they come with cash. In exchange, adherents receive amulets and little pieces of paper containing the rabbi's personalized blessing. The most successful rabbis have founded charitable institutions and small religious seminaries, which act as conduits for the incoming cash flow.

Menachem Friedman, an expert on Orthodox Judaism and professor emeritus at Bar Ilan University, says religious Jewish businessmen since the 19th century have solicited rabbis' blessings for cash to ensure their success -- though today the sums have reached unprecedented amounts.

"If the market is dangerous and shaky, the millionaires who benefit from that market have less confidence. They need these rabbis to give them that security," Friedman said.

The country's richest rabbinic dynasty is the Abuhatzeira family, scions of the revered Baba Sali who left Morocco for Israel in 1963, gaining a following among Israel's large Moroccan and Middle Eastern Jewish immigrant population. The Baba Sali died in 1984, but his portrait -- a shriveled face wrapped in a white shawl -- still graces the walls of Israeli homes, businesses and falafel stands.

His grandson, Rabbi Elazar Abuhatzeira, became the richest of them all, building himself a three-story villa said to include an events hall, deluxe guest rooms for important donors and an underground tunnel allowing him safe passage to his synagogue and office across the street, according to journalist Yossi Bar-Moha, who says he obtained the house plans from the Beersheba municipality.

Bar-Moha published a series of exposes in Israeli dailies accusing the rabbi of cheating his followers into believing he had no money in the bank, and violently threatening some to pay up.

The Israeli police's national fraud squad opened an investigation in the late 1990s, discovering $125 million in his personal account. He reportedly reached a settlement with Israel's tax authorities to pay a fraction of what he owed them.

Last year, a desperate adherent whose donations to the rabbi hadn't improved his lot stabbed Rabbi Abuhatzeira to death. His son, Rabbi Pinchas Abuhatzeira, inherited his wealth and his spot at the top of Israel's affluent rabbinic aristocracy.

"These rabbis are charlatans, swindlers and cheaters. They have no real knowledge. And people eat it up," said reporter Bar-Moha, who heads Tel Aviv's journalists' association.

An Israeli tax official, speaking anonymously because of the issue's sensitivity, said in the past two years tax authorities have approached some 20 religious figures, requesting earnings reports. Some rabbis have been investigated for tax fraud. No convictions are known, but some have reportedly reached settlements with Israeli tax authorities.

Reached for comment, advisers of some of the rabbis profiled by Forbes either would not comment on the income estimates, or said they were wrong but would not provide other figures. A spokesman for Rabbi Ifargan said his charitable institutions and received donations are above board.

At the end of the feast, adherents followed Rabbi Ifargan up a hill to pray at the hulking stone pyramid that houses his father's grave. Ifargan emerged from the tomb surrounded by paparazzi, bodyguards and a host of followers shouting out requests for the rabbi to pray for their health and for their children to find a good match.

When an Associated Press reporter asked the rabbi the secret to his success, Ifargan stopped. The 46-year-old rabbi with a pointed jet-black beard and brimmed hat fixed his gaze for a few moments, cocked his head up toward the heavens and shrugged.

Then his bodyguards whisked him into a black Mercedes-Benz, and they sped off.

[Associated Press; By DANIEL ESTRIN]

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