The venturing candidate

Erel Margalit, explains why local leadership is not on his agenda and why he believes that now is his time to play on the national field.

By PEGGY CIDOR
Erel Margalit 521 (photo credit: Marc Israel Sellem)
Erel Margalit 521
(photo credit: Marc Israel Sellem)
Jerusalem has always been considered a bastion of religious and right-wing parties, even during the days of mayor Teddy Kollek, who was a member of the Labor Party. The religious residents, who constituted a large majority, and the strong influence of right-wing parties, even in the days of the British Mandate, have made the capital into a stronghold of the right-wing religious, a city where the Labor ideology and supporters are not such an important issue and certainly cannot have much impact.
And yet these days, the national Labor Party primaries have suddenly become a hot issue in Jerusalem due to the fact that a local and influential resident is running for the party leadership. Five candidates are running in these elections, but one of them is a local resident, though his chances of winning are slim not only because he is virtually unknown to many voters but also because he joined the campaign quite late in the game and is not an experienced politician.
Erel Margalit, a successful hi-tech entrepreneur and philanthropist, a man whose name has often been mentioned as a potential contender for mayor, is a candidate for leader of the Labor Party. Last week he appealed to the court to postpone the election (scheduled for September 12), arguing that there had been some irregularities in the roster of party members. But even if his request is approved by the court, his chances remain slight.
There is no question that, by throwing his hat into the ring, Margalit is making a statement – that he is ready to make the move from the relatively comfortable position of businessman-philanthropist into the minefield of politics.
The question that remains is why he chose to jump directly into the national campaign instead of trying first to run for mayor of the largest and most important city in the country – a step that many have been expecting him to take for quite a while.
The candidate from Jerusalem, a talented millionaire and successful hi-tech golden boy who is very involved in local issues and philanthropic projects, says he wants to focus now on national leadership.
In an extensive interview with In Jerusalem, the founder of Jerusalem Venture Partners (JVP), who turned 50 a few months ago, explains why, despite his love for and commitment to the capital, where he lives, local leadership is not on his agenda and why he believes that now is his time to play on the national field.
The fact that his chances of winning the Labor primaries – held following the departure of the former party chairman, Ehud Barak, who split and formed a new party – are less than promising doesn’t seem to bother him at all. Margalit appears to have a lot of self-confidence, and nothing seems to diminish his energy, his vision of what should be done and his sense of a mission.
Whether the primaries are held next week or later, Margalit will have to compete with experienced politicians, two of whom are former leaders of the party. The four other candidates are Amir Peretz, Isaac Herzog, Amram Mitzna and Shelly Yacimovich. Yacimovich is considered by many observers to be the favorite, mostly due to the fact that the current protest stream reflects many of her public statements and positions on the need for a society based on the principles of social justice and with a strong welfare system.
MARGALIT SAYS that for as long as he can remember, he has been active in the Labor Party. Born on Kibbutz Na’an, he grew up in Karmiel and became mayor Teddy Kollek’s closest assistant, upon returning from his studies in the US.
“Following his defeat in the 1993 elections,” recalls Margalit, “Teddy asked me to stay in Jerusalem and to continue to serve the city, and that is what I have done since then,” he says, adding that since he was a child, he knew that one day he would fulfill his mission and become a leader.
What compelled him to announce his candidacy was the realization that while everything in the country had undergone tremendous changes – from technology to the level of restaurants – politics, especially in the Labor Party, remained stagnant.
“I want to bring renewal, imagination, boldness, hard team work, to present a vision and work hard to make it come true, to Israeli politics in general and to the Labor Party in particular. I know I came late, but I came to try to save the party, to rescue it. I believe that I have to do something. The major issue is not who is the candidate but how relevant this party wants to be and can be now.”
Margalit says that for him, the most natural and easiest thing to do would be to create his own party, but, he explains, “My feelings, my emotional ties are there in the Labor movement, and that’s where I belong. Today, the Labor Party doesn’t need a leader with a megaphone but rather a leader with an iPhone. This is what I want to bring to the Labor Party, the movement of the pioneers who built the country, because we need those pioneers today; we just have to bring them up-to-date on today’s needs.”
He uses Plato’s allegory of the cave (chained men who only see reflections of the outside world on one of the cave’s walls) to explain how he sees the present situation in his party. “The whole Labor Party has been in a cave since the assassination of prime minister Yitzhak Rabin [in 1995], and I want to tell them that outside there is light, there is life, real life. There are squares, there are tents, there is protest, there is September [the UN vote on a Palestinian state] awaiting us there outside. I come from within, I know that this party, which has been my life and my ideological home all my life, is probably the toughest place in Israeli politics. It is about fulfillment, pioneering, building for the Galilee, for the Negev. I admit that the Labor Party has always had a problem with Jerusalem, but this must change.”
Margalit declared his candidacy in April, much later than the four other candidates, two of whom have already been party chairmen (Peretz and Mitzna), while he is almost unknown. There is almost no chance that he could win these primaries, but there is also no doubt that he has everything to gain by running, thus becoming a player on the national political playground.
IN 2005, Forbes international business magazine selected Margalit as the top-ranking non-American venture capitalist on its prestigious Midas (The Golden Touch) List, and in 2010 The Marker magazine named him the best venture capitalist in Israel. He is married to Debbie and is the father of three daughters: Tair (21), Eden (19) and Maya (16).
In his office, paintings of his wife are hung on the walls between the large windows, and many art books are displayed on the bookshelves. Margalit is tall, is wearing jeans and a pale purple shirt and speaks loudly as he moves from one armchair to another while animatedly explaining his views and plans for the party, for society and for Jerusalem, which can be summarized as a balanced mixture of technology, art and welfare.
Margalit studied philosophy, logic and English literature at the Hebrew University. In 1985 he moved to Columbia University, where he received his PhD in philosophy.
Upon his return to Israel in 1990, Margalit began to work at the Jerusalem Development Authority, heading up the business development department in the technology sector in Jerusalem, where he worked closely with Teddy Kollek, to bring dozens of technology companies to Jerusalem with the aim of turning the city into the hi-tech capital of Israel. In his three years at the JDA, Margalit succeeded in bringing 70 large hi-tech companies, including Digital and IBM, to Jerusalem.
Following Ehud Olmert’s defeat of Kollek in the Jerusalem mayoral elections of 1993, Margalit left the JDA and embarked on an independent career and founded JVP, which invests approximately $850 million in eight funds. The company specializes in investments in media, Internet, mobile telephones, advertising and gaming industries. He has led 17 successful exits, including the sale of Chromatis Networks to Lucent Technologies in 2000 for $4.82 billion, the highest amount ever paid to an Israel company.
In 2006, Margalit launched the Media Quarter in the old railway station compound in Jerusalem, which includes the Media Quarter, JVP Media Labs, a technological incubator and The Lab, an arts incubator for Jerusalem performing artists with 300 young employees that include engineers, artists, authors, filmmakers and cultural figures.
He is also known for his philanthropy. In 2002, he founded the social organization Bakehila as a means of reducing the socioeconomic gap affecting underprivileged children in Jerusalem. Bakehila runs educational programs in the disadvantaged neighborhoods of Jerusalem with the goal of raising academic achievements and promoting personal and social growth.
Thousands of children from Jerusalem attended the program during its first eight years. Margalit also promoted his vision of economic growth among haredi and Arab populations by training and integrating them into the labor market in Israel, thus taking them out of poverty and alleviating pressure on the middle classes.
In the eyes of many in the city, Margalit has always been a potential candidate for mayor; and while he has never taken any concrete step in that direction, he has never rejected the idea outright. Over the years, there has been talk of some tension between him and Mayor Nir Barkat.
The two have many similarities in their biographies and activities, but in answer to In Jerusalem’s queries, Margalit is very careful to sound fair.
When asked if the Labor Party candidacy is not just a step toward city hall in the next elections, he seems a little embarrassed, and then answers simply that there is already a mayor.
But he admits that since he is so involved in Jerusalem, the question about his personal involvement cannot not be dismissed.
“Jerusalem has a mayor. As for the future, I don’t know. I feel it is the right time for action on the national level. I feel very closely tied to Jerusalem; I feel I have influence here; I feel I help a lot, and I am very atttuned to what is happening in the city. But I also feel that I would like, as a leader, to take what I have experienced in Jerusalem and bring it to the Galilee, to the Negev, to the whole country.”
When asked “What will your conclusions be if you’re not elected?” Margalit is quick to answer, “When? This round?” He says he believes he has the power to make the necessary changes, mentioning the current protest movement, which indicates how deep the need is for those changes.
BUT THE issue of his eventual candidacy for mayor still needs to be clarified, so I ask him what would he do if he was elected as a party member but not as its head. Would he leave everything behind and become an MK tied to a coalition agreement? Would he give up on the large scope of his vision instead of implementing it first in the city he lives in? “Well, as I said, there is a mayor here, whom I respect and support in his efforts to change this city for the better. And I want to give him a chance to do that. I sincerely believe that if someone has decided to go forward, we have to give him a chance.”
As for the relationship between the two, Margalit says, “Yes, we are on friendly terms and, again, I think he deserves a chance.”
When I try to insist that, after all, almost everything important he has done, he has done in and for Jerusalem, Margalit gets up from his armchair, strides over to the sofa and sits restlessly on its side. “You know, I do not belong only to this place. I am also deeply rooted in other places in this country. The periphery, the North and the Negev, I also belong to them. I spent years of my childhood in Karmiel. I am also Karmiel, not only Jerusalem. It is true that this city is the focus of many things, and I believe the city is already changing. Today, Jerusalem has an opportunity; I would like to see a few dramatic things happening here that fit my vision for this city.”
He adds that the drama that is happening between Jerusalem and hi-tech is totally different from anything happening anywhere else. “Take Herzliya. It’s only hi-tech and technology and business, while the whole idea of new media facing the Old City is making the difference in my eyes. Here you have the contradictions, the differences, history facing the future. It is more interesting here than any other place. And the kind of hi-tech we have in Jerusalem is slightly different. In the early 1990s Israel built the infrastructures of world technology, including in the communications field, because we took the military technology developed here and used it to develop civil technology. But today we serve the individual, the human being, so now we need something totally different. We need artists, designers, storytellers; and in that context, Jerusalem’s obvious advantage is its spirituality. And if this happens, then Jerusalem can become relevant. All the hi-tech we brought here will also become more relevant because today it is more than industry. It can become a part of the story of Jerusalem told by Jerusalem itself, from inside. In my vision, this city comes up revived through storytellers, the stories of the city, its artists, its PR, anyone coming from a different discipline – journalists, engineers. Like when an engineer meets a storyteller – something magical happens between them, which comes out in the product they provide. And that’s what Jerusalem can offer.”
ON THE issue of the different communities in Jerusalem and how he sees them getting more involved, Margalit explains that he saw the benefits through his work with haredim who moved to hi-tech.
“I have been involved in this right from the beginning. I talk to important rabbis who want to encourage training, and we help a lot here. It began with women, but now it’s also men. Lots of haredim are now working. We talk with them about ‘parnusseh’ [livelihood] – that’s the most important word in this context.
Once they work, there is no longer any place for discussions, opposition – they become a part of the life of this city; they become my allies. The same can and should be done with Arab residents here,” he says.
But his preferred topic remains his philanthropy. With a big smile and a glimmer of emotion, Margalit recounts how it began.
“I brought investors and businessmen from all over the world to promote projects, and I took them around to see the city. At a distance of 500 – 800 meters from here, from my house, there were kids who didn’t have enough to eat and didn’t have any future. When I realized that, I understood I had to do something.
I became a teacher to help in their schools. I told them, ‘Don’t try to work on all the topics if you can’t. Find one thing – I don’t care if it’s soccer – but stick to it and do the best you can. Once you do that, you’ll see that you can. Those who told you you were incapable were wrong. From then on, you can learn everything.’ That’s how it all started.”
As for his vision for the near future, beyond local politics, Margalit says, “It’s the time for the rise of the creative class, with graduates from the arts high schools who want to live a real artistic life here, not just working, studying and sleeping. People say that hi-tech is not relevant to politics, but I say that hi-tech is what is relevant to politics. It’s team work, it’s a vision to fulfill.
It is also how to overcome problems together as a group, as a team. It’s waging war against the giants around, it’s struggling to penetrate markets that are closed in our faces, and it’s an Israeli thing. It is a big drama.
“We have become the second superpower in this field in the world, and look – that’s the only place where we have succeeded in getting out of the ghetto. We have invented a new language that has allowed us to overcome all the difficulties and barriers. What I wish is that we could do the same in the political arena.”


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