From our archives: Israel's shadow diplomat - Who is Yitzhak Molcho?

A sixth-generation Jerusalemite, a private lawyer, Prime Minister Netanyahu’s closest confidant, criminal suspect – a look at the man intricately linked with Israel’s foreign relations.

Netanyahu shakes hands with member of the Palestinian Parliament Dr. Saeb Erekat in Jerusalem in April 2012. On the far left side, is Attorney Yitzhak Molcho (photo credit: GPO)
Netanyahu shakes hands with member of the Palestinian Parliament Dr. Saeb Erekat in Jerusalem in April 2012. On the far left side, is Attorney Yitzhak Molcho
(photo credit: GPO)
Yitzhak Molcho, considered Prime Minister Benjamin Netanyahu's right hand man and his liaison for the most sensitive issues has been named as a suspect in the police's probe into Case 3000. Molcho is suspected of breach of trust violations for allegedly using his clout with Netanyahu to benefit his business partner and another suspect in the case, Netanyahu's lawyer David Shimron. The following is a profile written earlier this year offering a glimpse into the prime minister's man in the shadows.
It was an extremely significant diplomatic visit that seemingly came out of nowhere, Egyptian Foreign Minister Sameh Shoukry’s unannounced trip to Jerusalem on Sunday, July 10.
It was the highest-level visit by an Egyptian official in almost a decade; it signified that Cairo was willing to move its increasingly strong relationship with Israel from the storeroom to the front shelf; and it indicated something stirring in the diplomatic process behind the scenes.
The secrecy that veiled Shoukry’s visit until the very day he arrived had one man’s fingerprints all over it: Yitzhak (Itzik) Molcho, Prime Minister Benjamin Netanyahu’s special envoy dealing with the Palestinian diplomatic track.
Indeed, as Netanyahu and Shoukry wrapped up brief, public comments to the press before the meeting began, Netanyahu gave Molcho a shout out.
Prime Minister Benjamin Netanyahu welcomes Egyptian Foreign Minister Sameh Shoukry in Israel on July 10 (Marc Israel Sellem)Prime Minister Benjamin Netanyahu welcomes Egyptian Foreign Minister Sameh Shoukry in Israel on July 10 (Marc Israel Sellem)
“Before we go upstairs, I want to thank my trusted special adviser and personal envoy Yitzhak Molcho for all that he does to strengthen Israeli-Egyptian relations, and for his work in preparing today’s important meeting. Thank you, Itzik. I think he’s still moving from the airport, but he’ll get here.”
Of course, Molcho got there and participated in the meeting, which he had a major role in bringing to fruition. Indeed, Molcho has been “there” – at Netanyahu’s side and in the thick of diplomatic activities with the Palestinians and the Arab states – when Netanyahu took power the first time in 1996, and since he won the elections again in 2009.
But unlike others who over the years have had a role in advising, influencing, shaping and carrying out Netanyahu’s foreign policies – people like Uzi Arad, Dore Gold, Yaakov Amidror and Ron Dermer – Molcho is largely unknown to the public.
His name is heard every once in a while on the radio, but unlike the others, he could walk into a restaurant in a place like Ashdod and almost no one would turn their head or elbow their companion to take a look.
Who is Molcho? Why does Netanyahu trust him so much? And how did this Jerusalem corporate and commercial lawyer become the person in the driver’s seat managing Israel’s critical relations with the Palestinians, Egypt and Jordan?
He is arguably Netanyahu’s closest and most trusted adviser, yet his face is pretty much unknown; his voice is never heard on the radio; he doesn’t do the conference circuit; and even though he has been intimately involved in the Palestinian track since 1996, nary a substantive, policy-orientated interview with him has been conducted.
This, indeed, is one of the main criticisms leveled against him. Here is a man with an enormous amount of influence on the prime minister, who leads negotiations on extremely sensitive issues that will have a huge impact on the security of the nation, yet he works entirely in the shadows. Deep, deep in the shadows. The public does not know what he thinks, and it is difficult to conjecture what advice he is giving the prime minister.
Because of lawyer-client confidentiality, the public also doesn’t know the nature of Molcho’s business dealings. Together with David Shimron, Molcho runs a large Jerusalem law firm that has many clients in Israel and around the world. He has also been the Israel-based honorary consul to Austria for the last 35 years, a role that gives at least the appearance of a potential conflict of interest, though people close to Molcho maintain it is a “joke” to think there would be any conflict between that position and his dealings on the Palestinian issue.
Netanyahu shakes hands with member of the Palestinian Parliament Dr. Saeb Erekat in Jerusalem in April 2012. On the far left side, is Attorney Yitzhak Molcho. (GPO)Netanyahu shakes hands with member of the Palestinian Parliament Dr. Saeb Erekat in Jerusalem in April 2012. On the far left side, is Attorney Yitzhak Molcho. (GPO)
Molcho refused requests for an on-the-record interview for this article. One of his close associates said that “one of his advantages is that he is unknown.” His motto, according to this associate, is “the enemy of success is publicity.”
This penchant for secrecy seems to be contagious; of more than a dozen people interviewed for this article who work or have worked with him in the past, only a few agreed to go on the record. The rest were willing to talk on condition they not be named.
ONE OF THOSE willing to go on record was Dennis Ross, the veteran American diplomat who has known Molcho for two decades. He negotiated both the 1997 Hebron Protocol and 1998 Wye River Memorandum with him, a period when Molcho was Netanyahu’s envoy to Yasser Arafat. He also worked with him closely from 2012 to 2014 in the so-called London back channel talks, when Molcho was holding secret discussions with Hussein Agha, an academic and confidant of Palestinian Authority President Mahmoud Abbas. Those talks overlapped for a period of time with a formal negotiating track begun by US Secretary of State John Kerry in 2013, which Molcho was also involved in.
Ross said that Molcho’s secrecy, his complete discretion, is one key element that makes him a credible negotiator. “The last thing he is interested in is any kind of public attention,” he said. “He draws none to himself.”
Michael Herzog concurs. Unlike Ross, who sat for years on the other side of the table when negotiating with Molcho, Herzog has sat alongside him in negotiations for the same period.
Herzog, the brother of opposition leader Isaac Herzog, is a retired brigadier- general who has taken part in all rounds of negotiations with the Palestinians since 1993. He served as chief of staff to Ehud Barak when he was defense minister from 2006 to 2009, and in 2009 to 2010 was a special emissary of Barak and Netanyahu, along with Molcho, in trying to restart negotiations with the Palestinians.
“He is very secretive,” said Herzog of Molcho. “He works below the radar. When you meet him, you know it will not be leaked. You know that if it leaks it is not because of him, it is because of others. People know that they can deal with him without being exposed, because he is so confidential. He doesn’t talk to the press. Whatever you talk to him about remains in a closed room; it does not become public knowledge.”
That characteristic is one not only appreciated by those Molcho is negotiating with, but by the prime minister as well. It is one reason that Netanyahu trusts him completely. And, as Herzog, Ross and others say in a theme that runs through any conversation about the special envoy, Netanyahu trusts him absolutely.
He is not someone who, when his role is over, will write a “tell-all,” detail-laden book, one senior source mentioned.
That trust is not lost on his interlocutors. One official who has witnessed Molcho’s dealing over the years with the Egyptians said that while Molcho does not speak Arabic, his effectiveness in Cairo stems from the fact that “when he speaks to the Egyptians, it is as if the prime minister is speaking through his throat. He does not vary right or left from the message he receives from the prime minister. And when they hear him, it is as if they are listening to the prime minister speaking.”
Ross added, “The fact that he clearly has a close relationship with the prime minister means that whenever he is speaking and conveying a message, you know it is an authoritative message, and when he gives you his word on something, you know you can count on that. If he says that he doesn’t think he can produce something, then usually that is the case. But if he is persuaded of something, he will do his best to get it done.”
Yitzhak Molcho confers with Saeb Erekat in Jerusalem, in January 1997. (Sa'ar Ya'acov/GPO)Yitzhak Molcho confers with Saeb Erekat in Jerusalem, in January 1997. (Sa'ar Ya'acov/GPO)
CRITICS OF both Netanyahu and Molcho say the prime minister trusts him because he is family: his wife is the sister of Shimron, who is Netanyahu’s cousin and a partner in his law office.
Molcho is the managing partner at the Jerusalem law firm E.S. Shimron, I. Molho, Persky & Co., which is one of the leading commercial and corporate law firms in the country. It has represented Netanyahu for years, with David Shimron acting as the family’s private lawyer: the attorney who deals with private cases involving the prime minister or his wife, Sara. One highly critical source said that in all the years that Netanyahu has been in power, both during his first term from 1996 to 1999, and his second go-around that started in 2009, dozens of advisers and ministers have come and gone through his doors. The three who have remained constant are all family: his wife, Shimron and Molcho.
He trusts only family, the source claimed.
“I trust my gardener, but that is not sufficient,” he added, saying that this trust does not make Molcho qualified to be so heavily involved in shaping the country’s foreign policy.
What irks this source and other critics of Molcho is the lack of transparency in an arrangement where a private lawyer, who still works in that capacity and is not a government employee, is delegated with delicate state issues. This, these critics charge, is simply bad governance.
“In a small, backward country, a relative of the ruler conducts the most senior business, but not in a serious country,” the source said, adding that as a private contractor Molcho is not bound by the same rules of transparency that apply to civil servants. “Governments must work according to certain standards and procedures.”
Molcho is not on the government’s payroll, and gets a symbolic payment of one shekel a year for this troubles (Netanyahu has joked that he hasn’t even received that payment yet).
This type of arrangement is not new to Molcho. His father, Rafael Molcho, was one of the founders of Discount Bank, and in the 1960s served Levi Eshkol, then finance minister, for three years in a voluntary capacity as the Finance Ministry’s head of foreign currency and foreign trade, receiving a symbolic dollar a year in compensation.
Molcho’s confidants dismiss the criticism, saying that Israeli leaders – as well as leaders around the world – regularly use personal envoys for diplomatic missions because they trust them implicitly.
Ariel Sharon used Dov Weisglass as a special envoy, even though he too retained an interest in his law firm, they pointed out. Like Weisglass, Molcho has signed a conflict-of-interest agreement. This agreement, approved by the attorney- general, restricts Molcho from dealing as the special envoy with anything having to do with his clients or his firm.
“This creates a wall of China between his practice and his diplomacy,” one of Molcho’s close confidants maintained.
Herzog said that while he is aware of the criticism that Molcho is fulfilling his role even while still involved in his private practice, if the prime minister believes that he cannot find someone inside the system whom he trusts more, he is entitled to bring someone in from the outside.
Herzog, who has traveled with Molcho extensively over the years, said he “never encountered a situation where he prioritized his private practice over state affairs.”
While one can assume that some people are attracted to Molcho’s law firm because of his closeness to the prime minister, Herzog said, “I can tell you that in working with him, I think he neglected his practice because he always prioritized state affairs. I never encountered a situation where he said, ‘I cannot come to a meeting or travel because I have business at my law firm.’ And I never encountered a situation where we were in state meetings that he ever mentioned his own law practice.”
Herzog said that one of the reasons for Netanyahu’s complete trust in Molcho is that “the prime minister works with many people, with politicians, but Molcho does not come with any political agenda.”
He also has no political ambitions, another reason for Netanyahu’s trust.
The envoy’s lack of a clear political agenda, ironically, frustrates some critics. As Netanyahu’s closest adviser on the Palestinian issue, those who do have political agendas – for instance, some on the Right – would like to see him push certain issues, such as settlements, much harder. But that is not Molcho.
In fact, his politics are an enigma. One former associate said he does not think Molcho votes Likud; another close associate said that neither Molcho nor his father were ever members of a political party; and Ross – in his 2004 book on Middle East negotiations called The Missing Peace – wrote that Molcho was “not a Likudnik – his own political instincts were center-left.”
Asked last week whether he still stood by this characterization, Ross said that maybe he wouldn’t say the same thing today,“but he has his own views.”
And, Ross noted, he is willing to express those views to the prime minister. “He was probably the only one around Bibi who could tell him what he did not want to hear,” Ross wrote.
Ross expanded on this to the Magazine, saying that Molcho was by no means a “yes-man.” He said that he has been in the room when – after he and Molcho had “come to a meeting of the minds” on a particular issue that “may not have been where the prime minister was” – Molcho would make the case.
“Sometimes it worked, sometimes it didn’t,” Ross said, adding that Netanyahu clearly valued his envoy’s counsel. He doesn’t always accept it, he said, but he listens to it carefully.
MOLCHO, 72, has known Netanyahu – some five years his junior – since the age of 16, when they grew up in the same Jerusalem neighborhood: Rehavia.
Molcho’s great-grandfather, Yitzhak Yehuda Cohen, was one of the most prominent Jerusalem businessmen in the 1920s and ’30s, and bought the land Rehavia sits on today from the Greek Orthodox Church. His son-in-law was Yitzhak Rafael Molcho, a journalist, translator and historian who was born in Salonika, and was a leader of the Jerusalem Sephardi community. He used to lend books to Benzion Netanyahu, the prime minister’s father, who would often frequent their home.
Yitzhak Rafael Molcho was the “mukhtar” of Rehavia during the British Mandate, and was the person responsible for naming all the streets in the leafy neighborhood – largely populated by the Ashkenazi elite – after historical Sephardi luminaries: Rambam, Ramban, Abrabanel, Mitudela, Ibn Shaprut and others.
Rehavia was not the only land Molcho’s great-grandfather bought. He also bought 128 dunams of land in Gush Etzion in 1935, the land where Neveh Daniel is today situated.
That fact came up in discussions Molcho had soon after US President Barack Obama was elected and dispatched George Mitchell to the region as his special envoy. In one discussion, the claim was made that Jews never owned land in the West Bank or east Jerusalem. Molcho, hearing this, piped up and pointed out that the communities in Gush Etzion sit on land that was purchased by his great-grandfather.
Molcho traces his family’s lineage in Jerusalem back six generations, and this genealogical fact, said former ambassador to the US Michael Oren, is “the key to understanding him. He is Levantine. He understands the mentality. I learned a lot from him.”
Oren said he learned from Molcho that in Middle East negotiations it is important never to give anything for free, because that will stop the negotiations. He saw this clearly when Obama called for a halt to all settlement construction in 2009.
“That doesn’t advance the process, it stops the process, because in the Middle East if you are getting something for free like that, a settlement freeze, then you don’t negotiate for it,” Oren said. “Molcho taught me that.”
Oren described Molcho as someone with “impish charisma” who was “like a character out of a novel.”
“He is urbane, a great tennis player [he was junior Jerusalem champion in his youth], drives a Jaguar, is chairman of the Israel Museum, has an international reputation, and is a connoisseur of art,” he said.
Another source, listing points of added value that he believes Molcho brings to the table, also – like Oren – cited his “likeability.”
“You can put him in front of anybody,” he said. “He is a great raconteur, a natural diplomat. He is far away from the stereotype of the Israeli official who is someone solely mission-oriented.”
He is also, the source said, a “very good commercial lawyer whose talent is in putting together deals of enormous complexity.”
Those commercial lawyer skills are ones he brings to negotiations. He is a classic lawyer who can wear down the other side with details, said one former official who negotiated alongside him.
In his book Ally: My Journey Across the American-Israeli Divide on his experience as ambassador to the US, Oren described a scene where this was evident. It was in November 2010, and the US was trying to get Israel to extend a 10-month settlement freeze it had declared. Netanyahu and then US secretary of state Hillary Clinton, along with top aides – including Molcho and Mitchell – were discussing the matter during one of the premier’s visits to the US.
“...The conversation quickly bogged down in a lawyerly debate between George Mitchell and Yitzhak Molcho over how many housing projects could be ‘grandfathered’ – permitted to continue – in the event of an additional freeze,” Oren wrote. “The rest of us just looked on stultified until, with uncharacteristic thunder, [US Ambassador] Dan Shapiro smacked the table with both fists and shouted, ‘This is stupid! We all know what we want, so let’s just cut a deal.’”
Getting tangled up during negotiations in infinite legal details has even earned a phrase in Washington, according to one official: it is called “to be Molchoed.”
Ross, however, said attention to details is not a negative.
“Yes, he focuses on details,” the veteran Mideast negotiator said. “Maybe that frustrates some people. My view is that in these kinds of negotiations, the details matter. I never viewed that as a problem.”
MOLCHO’S CONFIDANTS say that he views himself not as a strategist, but a tactician. He does not set government policy – though he takes part in security cabinet meetings on issues he is dealing with, and often briefs ministers on policy – rather he implements it.
Still, in that space, there is room for maneuver. One Molcho confidant said that in the Middle East there is a close connection between strategy and tactics, with tactics able to sink or float strategy.
For instance, leaving Gaza in 2005 was a strategic decision. But how it was done – in coordination with the Palestinians, or not; leaving the Philadelphi corridor with Egypt, or not – were all tactical decisions that went a long way toward determining whether the strategy succeeded or failed. And tactics are very much in the purview of the negotiators.
One criticism voiced against Molcho is that if he is such a great tactician, and if he has been involved in Palestinian negotiations for so long – indeed, has led them for the last nine years – then why are things stuck? Molcho is the envoy on the Palestinian dossier, this argument runs, the Palestinian track is blocked, so what does that say about the job he is doing?
Herzog believes that criticism is unfair.
“I think that to the extent that there is a criticism of policy on the Israeli-Palestinian issue – and I also have some criticism – it should be leveled at the prime minister,” he said. “He [Molcho] is not the prime minister; he represents him. But even within that context, Molcho as I know him is a problem solver. He is not an ideologue; he is a practical person.
In October 1997, Netanyahu is seen meeting with US Envoy Dennis Ross, foreign minister David Levy (left), government secretary Danny Naveh (right) and Molcho. (Amos Ben Gershom/GPO)In October 1997, Netanyahu is seen meeting with US Envoy Dennis Ross, foreign minister David Levy (left), government secretary Danny Naveh (right) and Molcho. (Amos Ben Gershom/GPO)
"He believes in a two-state solution.
“The more space you give him, the more results you get,” Herzog continued. “I think the problem is that he has been acting in a very narrow political space, because of the nature of this coalition. That is his space.”
As space with the Palestinians narrows, Molcho is playing a greater role these days in building Israel’s relations with its Arab neighbors, as the Shoukry visit indicated.
“The unprecedented relations we have these days with Egypt, and some of the other Arab states, is also to his credit,” Herzog said.
The overtures with the Arab world are motivated not only by a confluence of interest with countries like Egypt, Jordan, Saudi Arabia and the UAE on issues such as Iran and Islamic extremism, but also an understanding that in the current situation, where Abbas has pretty much lost his constituency, it is unrealistic to think that in the foreseeable future he can make the necessary decisions to lead to a breakthrough.
So instead of focusing efforts on an unrealistic breakthrough, efforts being led now by Molcho are aimed at preparing the way for a future where those decisions might be made. The animating idea is to look for ways to open a window to the moderate Arab countries that Abbas wants to be affiliated with, and get them involved in the Palestinian issue, so that Abbas will not have to be the one to take difficult decisions he does not have the political power to make. That idea helps explain Shoukry’s visit.
Ross, when presented with the argument that Molcho must not be too effective since things are so stymied, added another obvious element: “The Palestinians are a player in this as well,” he said. “In this part of the world you don’t have a lot of people who you can point to their success, so I would take that criticism with a grain of salt.”
Even Molcho’s critics agree that one thing he is very adept at is troubleshooting.
A recent example is the report published this month by the Middle East Quartet – the US, Russia, EU and UN – on the reasons for the diplomatic logjam. For weeks there were reports that the document would relentlessly slam Israel for settlement construction. In the end, a rather mild document emerged that did criticize Israel’s settlement policies, but not before slamming the Palestinians for violence and incitement. Molcho, diplomatic officials said, had a strong hand in moderating the tone of that paper.
What one sees in diplomacy, an old saying goes, is only the tip of the iceberg. Much takes place underneath the water that is unseen, and much of what takes place underneath the water is trying to keep certain things from rising to the surface.
Molcho, his confidants say, continues to have regular dialogue with Palestinian Authority officials when needed, and – a result of having dealt with the issues for so long – has access to everyone he needs to speak to.
The discussions he holds now are less on ways to create a breakthrough, and more on how to create a modicum of stability in an area where stability is not exactly a byword these days.
But even at a time when true diplomatic progress is unexpected, Israel needs to keep up a dialogue with its neighbors and the Palestinians over the Palestinian issue, one of Molcho’s close associates said. And Molcho’s overriding philosophy, he added, is that dialogue must be maintained under all conditions for one simple reason: “In this region if you don’t talk, you shoot.”