An investment firm headed by Jared Kushner and backed by Saudi Arabia, Qatar and the United Arab Emirates is the largest shareholder in an Israeli company which in turn holds shares in businesses accused by the United Nations of operating in illegal settlements in the occupied Palestinian territories.
Affinity Partners has received several billion dollars in funding from the Persian Gulf Arab states’ sovereign wealth funds since it was launched by Kushner, US President Donald Trump’s son in law and former Middle East advisor, in 2021, Middle East Eye reported.
In January, just weeks after securing further funding from the Qatari Investment Authority (QIA) and an Abu Dhabi-based investment firm, Affinity completed the purchase of a near-10 percent stake in Phoenix Financial.
Phoenix, formerly known as Phoenix Holdings, is an Israeli financial services group that offers insurance and asset management services, and holds shares in other Israeli companies in its own name and through a subsidiary, Phoenix Investment House.
An investigation by Middle East Eye has established that these include 11 public companies and one private company currently named in a database of businesses with links to Israeli settlements in the West Bank, East Jerusalem and the occupied Syrian Golan Heights, compiled by the Office of United Nations High Commissioner for Human Rights (OHCHR).
The businesses include banks and companies involved in telecommunications, transport, energy, engineering, and retail.
According to Tel Aviv Stock Exchange data reviewed by MEE on March 12, Phoenix’s total holdings in the 11 public companies are currently valued at around $4.5bn.
In a statement to MEE, Affinity said: “Affinity is proud to be the largest shareholder of Phoenix, one of the best performing and well regarded Israeli financial institutions.
“Affinity’s investors are passive, meaning they have no role in Affinity’s or Phoenix’s operations.”
At the time of writing, Phoenix’s share price was up more than four percent on Thursday as the company announced its 2024 results, including a comprehensive income of 2.087bn Israeli shekels ($0.57bn).
The money trail linking Persian Gulf Arab states to Israeli firms
Commenting on the results, Phoenix chief executive Eyal Ben Simon described the acquisition of shares in the company by international investors as “a significant vote of confidence in Phoenix and the Israeli economy”.
Ben Simon said: “We are pleased that the group’s results, leading position, and the business opportunity it represents support continued investment by prominent international investors.”
MEE has approached Phoenix for comment.
Kushner, who is considered to be close to Saudi Arabia’s Crown Prince Mohammed bin Salman, was a key architect during Trump’s first term of the so-called Abraham Accords which established diplomatic ties between Israel and several Arab states including the UAE.
He has spoken openly of his support for, and desire to invest in Israel, describing Affinity last year as “long-term bullish” on the country, and his hopes for a future normalization deal between Israel and Saudi Arabia.
Affinity agreed a deal last July to buy an initial 4.95 percent stake in Phoenix for around $470m Israeli shekels ($130m) with an option to double its stake for the same price pending approval by the Capital Market Authority, Israel’s markets regulator.
That purchase was completed on 20 January, with the increase in Phoenix’s share price since Affinity’s initial investment realizing the firm a current profit on paper of around 700m Israeli shekels ($191m), according to Tel Aviv Stock Exchange data.
Commenting in January on Affinity’s investment in Phoenix, Kushner said the deal was “a decision rooted in my belief in Israel’s resiliency”, and described Affinity’s partners as “some of the most sophisticated investors from around the region”.
But MEE’s investigation raises questions as to whether the Gulf states are now indirectly facilitating or profiting from settlement-linked businesses even as Palestinians in the West Bank face an escalating military assault that has displaced tens of thousands of people, and a surge in settler attacks.
The International Court of Justice ruled last July that Israel’s presence and measures in the West Bank, which it has occupied since 1967, were unlawful and should end as soon as possible.
But the following month, Israel attacked Jenin, Tulkarm and Tubas from land and air in a large-scale operation.
Then in January, Israel launched a new major assault on Jenin and Tulkarm which is ongoing and the longest in two decades.
With around 40,000 people displaced in the past seven weeks, UN officials have warned that facts are being created on the ground that align with Israel’s vision to annex the West Bank.
Why are Persian Gulf Arab states backing Affinity?
Organizations monitoring companies which operate in settlements said it was not surprising that an investor of Phoenix’s size had stakes in companies accused of complicity in settlement expansion.
However, the investment of Persian Gulf Arab states in Israel’s occupation, particularly those which have not signed normalization deals, is a new element and stands in contrast to the public stances each state has taken against Israeli activities in the West Bank.
Last October, weeks before the QIA’s investment in Affinity, Qatar’s ruler Sheikh Tamim bin Hamad Al Thani said Israel had deliberately chosen to expand its “aggression” in the occupied West Bank to implement pre-existing plans “because it sees that the space is available for that”.
Israel, he said, was “exploiting the opportunity of the international community’s inaction… to implement dangerous settlement plans in the West Bank”.
A month later, Saudi’s foreign ministry said that calls by Israel’s far-right to annex the West Bank “undermines peace efforts, including the two-state solution, encourages war, fuel extremism and threatens security and stability in the region”.
In January, the Emirati Ministry of Foreign Affairs “strongly condemned and denounced” Israel’s attacks on Jenin, stressing the need for an end to “illegal practices that undermine the two-state solution”.
Al-Haq, the Ramallah-based Palestinian human rights organization, urged the states “to refrain from normalization projects and to exercise extreme due diligence when it comes to their business investments to ensure that they are not complicit in the ongoing genocide and dispossession of the Palestinian people”.
Last year, Kushner’s business ties to the Persian Gulf Arab states through Affinity attracted the scrutiny of members of the US Senate’s Committee on Finance over concerns that their payments of tens of millions of dollars to the firm in management fees were an attempt by Persian Gulf Arab states to buy political influence and circumvent foreign agent registration laws.
Kushner, who holds no position in the current Trump administration, has denied any conflict of interest between his business affairs and political and familial connections, describing calls by some members of the committee for an investigation as “silly political stunts”.
Speaking to a podcast in December, Kushner said Affinity had “pre-emptively tried to avoid any conflicts” by approaching investors about the possibility of them injecting more capital last February when the outcome of Trump’s bid to return to the White House was up in the air.
In a briefing provided to the committee last July, details of which were cited by the committee in related letters and documents, Affinity said that Saudi Arabia’s Public Investment Fund had committed to providing it with $2bn in funds between 2021 and 2026.
QIA and an unnamed Emirati sovereign wealth fund were among a number of other investors who committed a further $1bn, according to the information published by the committee.
In December, it was reported that Affinity had raised a further $1.5bn from QIA and Lunate, an investment fund which is backed by Abu Dhabi’s sovereign wealth fund, ADQ, and overseen by Emirati national security advisor Tahnoon bin Zayed Al Nahyan, the brother of Emirati President Mohammed bin Zayed.
Andreas Krieg, an associate professor at King’s College London’s Defense Studies Department and a strategic risk consultant, told MEE that investing in Affinity has offered “a legal way for Persian Gulf Arab countries to put money into the wider Trump family network” at a time when “US foreign and security policy is for sale to the highest bidder”.
In its statement to MEE, Affinity said: “Partisan politics aside, Affinity Partners is an S.E.C.-registered investment firm that has always acted appropriately and any suggestion to the contrary is false. We are fortunate to have the support of some of the world’s most sophisticated investors and work hard on their behalf every day.”
MEE has contacted the PIF, the QIA, and Lunate for comment but none had responded at the time of publication.
UN tracks businesses backing settlements
The UN’s Human Rights Council tasked OHCHR in 2016 with creating a database of businesses involved in activities in illegal Israeli settlements as a resource to help states take action to prevent companies from “committing or contributing to gross human rights abuses of Palestinians”.
The list is supposed to be updated annually, but the first iteration, which named 112 businesses, was not published until 2020. Fifteen companies were removed and none added when the list was last amended in 2023.
Last year, OHCHR issued a call for input ahead of the next update of the list, but the database is not on the agenda at the current Human Rights Council session in Geneva, which started earlier this month and runs until 4 April.
An OHCHR spokesperson told MEE that the office was currently assessing about 850 submissions relating to more than 650 companies, and that an updated database was expected to be presented at the next HRC session in September.
Al-Haq told MEE it hoped the next iteration would result in a “significant expansion of the list”, but said the database was “only scratching the surface on the number of corporations that are deeply complicit in war crimes and crimes against humanity”.
The database does not include specific details about the businesses it names beyond identifying which of 10 categories of listed activities they are accused of involvement in.
Most of the companies linked to Phoenix are accused of involvement in one or more of the provision of services and utilities to settlements; the provision of banking and financial activities; or the use of natural resources, such as water or land, for business purposes.
The businesses listed in the OHCHR database in which Phoenix is invested are:
Financial: Phoenix is a significant shareholder in Israel Discount Bank (7.65 percent), Bank Leumi (7.39 percent), and Hapoalim Bank (7.35 percent), according to Tel Aviv Stock Exchange data.
According to Who Profits, an Israeli research center which collects information about companies operating in occupied territories, all three banks have helped construction companies involved in settlement building.
Israel Discount Bank and Hapoalim Bank have also supported settlement councils, while Hapoalim Bank has promoted and sponsored tours of the West Bank, East Jerusalem and the Syrian Golan in cooperation with settler groups, according to Who Profits.
Telecoms: Phoenix also holds substantial stakes in Cellcom (6.49 percent) and Partner Communications (8.22 percent).
According to Who Profits, both companies have erected scores of mobile phone masts in occupied territories, and have licenses from Israel’s Ministry of Communications to provide telecoms services to settlements.
Construction: Electra (6.68 percent), an engineering and construction company, has been involved in projects on occupied land including the Jerusalem Light Railway, tunnels linking Jerusalem and the West Bank, and wastewater and sewage treatment facilities.
Shapir Engineering and Industry (8.15 percent) operates a quarry and concrete factories in the West Bank and has also been involved in construction on occupied land.
Energy: Paz Retail and Energy, formerly known as Paz Oil, (6.77 percent) runs petrol stations in settlements and the occupied West Bank.
Retail: ZMH Hammerman (9.92 percent) owns property in the West Bank including shopping centers; Shufersal (8 percent) operates supermarkets and other stores in settlements; and Delta Galil (5.9 percent) is a clothing manufacturer with stores in settlements.
Transport: In 2022 Phoenix was reported by Israel’s Globes newspaper to have bought a 14 percent stake in Mayer Cars & Trucks, a private company that is also on the OHCHR list. Who Profits says it has provided vehicles to Israel’s defense ministry and runs bus routes between settlements through a subsidiary.
Phoenix also owns 3.88 percent of shares in Elbit Systems, Israel’s largest weapons manufacturer. Elbit is not in the UN database but has been accused by pro-Palestinian campaign groups of complicity in Israel’s illegal occupation and alleged war crimes against Palestinians in the West Bank and Gaza.
MEE has contacted all of the companies named in the OHCHR database to ask for comment.
Noam Perry, strategic research coordinator for the US-based American Friends Service Committee, which tracks corporate complicity in state violence, told MEE that it would be virtually impossible for an institutional investor in the Israeli economy, like Phoenix, to avoid exposure to settlement business activities.
“Israeli settlements are integrated into the local economy and Israeli law defines excluding them as an illegal form of discrimination,” Perry said.
“Therefore, it would be impossible for a company like Phoenix to avoid such holdings. The same would be true for all large investors coming into the Israeli market.”
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