In Israel, since the 1994 Oslo Peace Accords, an unsettling and misguided political logic has materialized – one that implies that discussing ‘sensitive issues’, or merely bringing them to light in a public arena jeopordizes the peace process.  This notion has permeated every corner of modern Israel, giving rise to a society profoundly susceptible to corruption, especially in the economic arena.

Past high ranking government officials in Israel, are now directly involved in lucrative business dealings, particularly in supplying cement for ‘reconstruction’ purposes in both Gaza and the West Bank, areas where they once served.

The current political situation has literally, paved the way, for financial exploitation to thrive. Although not against the law, the question that remains is, are these individual’s immune to the scrutiny that is ethically warranted?

Last month, I sat down and spoke with past head of Coordination of Government Activities in the Territories (COGAT) turned Gaza businessman, Col. (res) Grisha Yakubovich. As the previous Mayor of Gaza City, he was instrumental in establishing the IDF’s connections with the newly established PA in 2005.

Since his retirement last year, Yakubovich has now turned his interest to the private sector, and is directly involved in supplying cement to Gaza.

“I’m trying to gain some business initiatives because of those connections I have with the Palestinians… and am looking for opportunities relating to development in the private sector. I’m in touch with people in Gaza and with people in the West Bank” he nonchalantly tells me.

This type of practice is not uncommon, especially in Israel, with retired IDF personnel becoming involved in business opportunities in areas where they once served.  The ‘peace process’ is a lucrative industry, andIsraeli businesses, such as Yakubovich’s involved in the Gaza reconstruction industry have been reaping enormous profits in the aftermath of the Operation Protective Edge, under a UN-sponsored agreement.

Why? Because since 2006, the Israeli government became the sole authority to dictate which reconstruction materials were permitted to enter the Gaza Strip.

In the aftermath of Operation Protective Edge, also known as the 2014 Gaza War, Israel acknowledged the need for swift reconstruction of civilian infrastructure in the strip. As a result, rebuilding Gaza under the rationale of moving forward with the ‘peace process’ has proven to be a rewarding opportunity for Israeli businesses. The ‘Gaza Reconstruction Mechanism’ or GRM was subsequently developed, to ensure materials supplied to the region, including cement were being used only for the intended purposes.

Officially, the GRM purports to monitor how materials are being entered and being used, allowing Israel to pre-approve materials involved at every stage of construction. The reality, however, is that a thriving black market has emerged.

Hamas now divert up to 80% of materials for their own military infrastructure, including the construction of terror tunnels.

And the reason, according to Yakubovich, is “They are the only ones with enough money”.

A logical conclusion, then, is that Yakubovich, an ex IDF general now involved in private enterprise, is completely aware that the cement he is supplying, is ending up in the hands of terrorists.

“No system can be 100% effective” he tells me, referring to the GRM which he designed, perhaps in a subconscious attempt to rid himself of any accountability.

By doing business in Gaza, Israeli companies, such asYakubovich’s  involved in the reconstruction industry find themselves in a precarious position. We are entering into an area whereby euphemisms of ‘economic peace initiatives’ are allowing individuals, like Yakubovich, to use their status for their own personal financial gain.

The lack of transparency concerning ex IDF official’s involvement in private enterprise in Palestinian ruled territories, is of great concern to Israel.

At the least, they are indirectly complicit in funding Hamas, and at most, they are directly involved in the trade of cement to organizations with known terrorist affiliates.


Q: In Australia, the reports on the Israeli-Palestinian war are always very political, I am here today to talk about the human side of the story.You’ve commented previously in an article that Hamas are a major obstacle in rebuilding Gaza, is this still the case or are things changing? My understanding is that Hamas wants to wipe out Israel, have you seen evidence to the contrary

A: Hamas envisage themselves in the future as the leader of the Palestinian state

They are ruling Gaza, on the other hand they need to bring results, and the results they have bought until today is only suffering and death, and they needed to something different, so they opened fire, the only way to change the policy towards Gaza is by force, on the other hand the achievements are so small, they got some of the money for the Gaza reconstruction and continue to use force

Hamas are a terror organisation and they use civilian platforms to serve terror – it has always been like this and will continue to be.

If we will compare the amount of infrastructure, cement or sand, what they need to build a tunnel, so what tunnel is comparable to a big clinic, say 2 or 3 stories, so if I were to be Hamas, I would prefer to use the same amount of building materials to build the clinic and then ask the donors, whoever it is, to equip this clinic. Instead of this, what they are doing, is they are leaving the problem to the international community, they are leaving the problem to the PLO

The idea is, instead of using their motivation, their money, their forces, to reconstruct Gaza

They continue with their efforts to build tunnels, to develop new weapons – I think we are going to face new surprises, in the next war, and there is going to be a next war

Q: The Gaza Reconstruction Mechanism – can you tell me about this? Does it hinder the process of rebuilding Gaza

A: I wrote the mechanism – We have a computer program, engineers do an underground survey, checking the house, the engineers write exactly the amount of building materials that this house needs, so the guy will be able to rebuild this. Now, it depends if he is a refugee or a regular guy – if he is a refugee, they belong to UNRWA, UNRWA they have the survey, they will conclude the survey with the amount of cement and building materials that they need, then they will have a guy who is buying the building materials for them, this refugee gets a voucher that he can get 2.5 tons of cement, and then he will go to the vendor, and the vendor will give him the products that he needs.

If it’s a private guy, he will buy from the vendor directly

They should use building materials to rehabilitate the house, but what they prefer to do is to sell 50 – 70% on the black market – and they only ones that have enough money  to buy on the black market are Hamas.

That’s why Hamas are a certain obstacle to the Gaza Reconstruction Mechanism. Some of the material gets diverted to Hamas.

The first is via the black market and the second is that there are people, that Hamas is giving them money so they will buy the materials in Israel, but it will actually be for them – that is why in the last few months.

Many traders are creating a certain disguise, and in the end these goods will move to Hamas

Q: You were one of the last officers to leave Gaza, and mentioned that you established connections with the PA, this is something we don’t hear about often, the two ‘opposing’ sides working together, can you go into more detail? What did this involve?

A: In the OSLO accords, in 1994 we had to deliver civilian responsibilities to the new PA, I was in Gaza City, and I left Gaza after giving the new authority the responsibilities and they started to rule Gaza. Simple. Just that

Q: I’ve also seen that you are CEO of a company and mentioned how much Israelis and Palestinians have in common in terms of business dealings, can you elaborate

A: I had a private business, just concluded the contract, being a CEO of a private company selling cement to Gaza – we import cement to Israel, selling cement to both Israeli and Palestinian customers.

Q:Why did you leave?

I didn’t want to do it anymore, simple: A

Q: What are your business plans for the future?

A: “I’m trying to gain some business initiatives because of those connections I have with the Palestinians  and the international community to look for opportunities relating to development in the private sector. So I’m in touch with people in Gaza, with people in the West  Bank.

I’ve been an official in the IDF, I did my job, I need to have one year of not being in touch with anyone, and only after one year, I can start calling people I knew from the past, there is a law and I have to work within the law – I respect the law.

Q: COGAT says that some of the private sector cement for the restoration of the Strip had been taken by Hamas. Can you explain in layman’s terms how materials get diverted?

A: Hamas uses civilian platforms – find anyway to either to push people to build for them, or to convince people to do it for them, or any other way that they will try and be and creative that dual use materials will enter to Gaza – got permits that can enter to Israel – to smuggle materials

The Israeli government needs to be sure that dual use materials are being used for the project and not to build tunnels to invent, I don’t know, another new weapon to kill

Nobody, and I mean nobody can provide a 100% promise that it will never happen, we are trying to do our best under the current circumstances, on one hand a terrorist organisation is ruling Gaza, Israel needs to find the balance between supervision of projects and what to categorize as dual use and what not to.

When a project is authorised, UNRWA will come to COGAT and say this is project number one, Hamas will not deal with the building materials of that project, probably.

Q: Right now there is a big debate in the Australian parliament on whether to condition funds to UNRWA, what are your views on this? Is there a link to Hamas

Look UNRWA is there, it’s impossible to think that there is no connection

I’m sure that the head of UNRWA is not talking to the head of Hamas. But the people who are working at UNRWA, they have brothers, they have sisters involved

The problem is a pragmatic problem, if the budget to UNRWA is stopped, 1.1 million refugees in Gaza have no education, no health services, no food

Somebody should take responsibility for the things UNRWA is responsible for

UNRWA provides 3 layers of support – one is education (schools, teachers, books), one is health and the third is social

So let’s have a 5-year plan, and decide, whoever is there in the West Bank or In Gaza, I don’t care who is there, UNRWA will stop getting the money for children, say for kids from 1st grade to 6th grade and the responsibilities will be given to whoever is ruling Gaza – to the PA, or Hamas in Gaza. A 5, 6 or 7-year planning. UNRWA should be cancelled, but in a process, in a very clever and planned process

One of the major problems is incitement, whether it be Hamas, the PA or the UN, they will see another generation that is seeing another struggle against Israel

There is incitement on both sides – you cannot blame just the Palestinian schools – we need to educate everybody to accept the other side

They are educating 3, 4, 5 year-old kids that we are devils with the tails – and I’ve heard they are also in UNRWA schools