On Sunday, Globes disclosed that former president Shimon Peres, who will turn 92 this August, was hired as consultant for the multi-billion dollar Israeli-based generic drug maker Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA). Working through the recently incorporated Peres & Associates, Shimon Peres will be providing consulting services at the rate of $10,000 per month, with options for additional, as hoc earnings.
The revelation was nothing new to followers of the career of Shimon Peres, nicknamed a “tireless schemer” by the late Yitzhak Rabin.
On the eve of his retirement from office last year, the Peres presidential palace had run an annual budget of more than $15 million—the highest since the establishment of the state—and included $1.25 million a year for an unprecedented barrage of international flights, millions more on hosting extravagant events (funded by a murky combination of state funds and private donations), and hundreds of thousands for employee expenses.
The idea behind Peres & Associates came to life two years or so before the end of President Shimon Peres’ term in office, when his team began planning the next phase in his career.
Initially, the Peres team was going to move its operations to the Peres Center for Peace, founded in 1996 to serve as the home base for Israel’s longest serving politician (or, as the official website puts it, to promote peace-building between Israel and its neighbors).
But the center has been plagued by dwindling donations and burgeoning budgets, to the point where it was deemed unfit to serve Shimon Peres’ ambitions.
That’s when the idea was born for Peres & Associates, which was incorporated last July.
According to Calcalist, the new firm developed a polished business model, using the retired president’s contacts around the world to benefit Israeli companies that are active in global markets. Peres would promote these companies’ business abroad—for a fixed retainer—based on a detailed price list.
The sole shareholder and CEO is Chemi Peres, Shimon’s son, whose day jobs include being managing general partner of the Pitango hedge fund, which he co-founded, managing more than $1.6 billion. Chemi Peres is also chairman of the board of the Peres Center for Peace.
An senior Israeli high-tech manager told Calcalist: “Peres & Associates approach high-tech companies and offer them assistance in selling to foreign governments and government agencies, places where the name Peres opens doors. In exchange for opening doors and helping in closing deals, they want retainers in the tens of thousands of dollars, as well as 8 percent of the future transaction.”
After salaries and taxes, most of Peres & Associates’ profits are eventually supposed to be funneled to the Peres Center for Peace. On its face, the plan sounds a lot like a more modest version of former president Bill Clinton’s global charity work, only the Peres venture has been hitting some unfortunate walls.
A week ago, Bank Hapoalim, Israel’s largest bank, hired Peres for $30,000 a month to promote its activities in the U.S. and other international markets. According to YNet, Peres was expected to make speaking appearances at bank events, including, this April, at a ceremony marking Bank Hapoalim’s 40 years in America. But the plan crashed under a backlash of hostile comments in the press, to the point where Peres had to go on Israel’s Channel 2 News to announce he killed the deal.
Peres denied that the money was going to him, personally—it all went to public projects, he insisted. He also denied that his role was that of a lobbyist for the bank.
Israelis, whose average hourly income stands at between $10 and $12 hated the idea of Peres turning his influence and connections into $360,000 a year plus options. So Peres finally gave up the deal.