Labor threatens legal action against wealthy activist

Venture capitalist Erel Margalit aims to bring 30,000 new faces to party; Labor MKs convinced he intends to run for party leadership.

March 8, 2011 01:34
2 minute read.
Labor Party

Labor Party 521 (do not publish again). (photo credit: Flash 90)


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Labor Party legal adviser Yigal Shapira sent a threatening letter on Monday to Jerusalem venture capitalist Erel Margalit, asking him not to use the party’s name in his effort to register thousands of new Labor members.

Margalit gained fame for selling the Israeli company Chromatis to Lucent Technologies for $4.8 billion in 2000 – the largest takeover in Israeli history at the time. His latest venture is Labor Now, an effort to bring new life to the struggling party.

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In a press conference at Tel Aviv’s Beit Sokolov, Margalit outlined Labor Now’s goals, which include registering 30,000 new party members in a registration drive set to end in June, impacting the party’s future, and ultimately returning it to power. The movement supports the standard Labor ideology of advancing workers’ rights, restoring clean politics and advocating for two states for two peoples.

Besides Margalit, the movement includes Gaon Holdings chairman Moshe Gaon, who was former Labor chairman Ehud Barak’s strategist when he won the 1999 election; Jerusalem Foundation president Ruth Cheshin; former Israel Police chief investigator Cmdr. (ret.) Moshe Mizrahi; and young venture capitalist Shmuel Chafets, who is the son of Israeli- American journalist Zev Chafets.

“We intend to make a revolution in Labor by making it modern, adventurous, creative, and loyal to its values,” Margalit said at the press conference.

When asked whether he intended to run for the Labor leadership in the September 7 primary, he said it was not currently his plan, but left open the possibility of changing his mind ahead of the race.

Margalit’s venture angered Labor MKs, who are convinced that he intends to run. They said Margalit was breaking the law barring contributions from corporations, by running an advertising campaign using Labor’s name.

“Bringing people into the party is welcome, but what he is doing is illegal,” Labor leadership contender Isaac Herzog said.

Fellow contender Shelly Yacimovich said it was also illegal for candidates to start spending money before the March 24 Labor convention formally initiated the race.

Labor Now spokesman Nadav Gal-On responded that the movement would act in accordance with the law. Officials in the movement said the Labor MKs spoke the way they did because they felt threatened by the thousands of new members Labor Now would bring in.

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