Three Gulf States Back Company Involved in Settlement Construction Led by Kushner

The British website Middle East Eye revealed that an investment company, led by Jared Kushner, son-in-law of former US President Donald Trump, is receiving support from three Gulf states, despite its involvement in companies contributing to settlement construction in the West Bank.

According to an investigation by Middle East Eye, Saudi Arabia, the UAE, and Qatar are backing Affinity Partners, a company owned by Kushner. Affinity is primarily involved in several companies that the United Nations has explicitly accused of operating in illegal settlements on occupied Palestinian territories.

The website reported that since Kushner launched Affinity in 2021, it has received billions of dollars in support from sovereign wealth funds in these three Gulf countries.

In January, just weeks after securing additional funding from Qatar’s Investment Authority and an Abu Dhabi-based investment company, Affinity completed the purchase of a near 10% stake in Phoenix Financial.

Phoenix, formerly known as Phoenix Holdings, is an Israeli financial services group offering insurance and asset management services. It also holds shares in other Israeli companies through its subsidiary, Phoenix Investment House.

Middle East Eye’s investigation confirmed that these companies include 11 public companies and one private company currently listed in a United Nations database of companies linked to Israeli settlements in the West Bank, occupied East Jerusalem, and the Golan Heights. These companies span various sectors, including banking, telecommunications, transportation, energy, engineering, and retail.

According to data from the Tel Aviv Stock Exchange, Phoenix’s total holdings in these 11 companies are currently valued at around $4.5 billion.

In a statement to Middle East Eye, Affinity said: “We take pride in being the largest shareholder in Phoenix, one of the most respected and high-performing Israeli financial institutions.”

“Affinity investors are passive, meaning they do not play a role in Affinity’s or Phoenix’s operations.”

At the time of writing, Phoenix’s stock had risen by more than 4% on Thursday, following the company’s announcement of its 2024 results, which included comprehensive income of 2.087 billion Israeli shekels ($0.57 billion).

Commenting on the results, Phoenix’s CEO, Eyal Ben Simon, described the international investors’ acquisition of shares as “an important vote of confidence in Phoenix and the Israeli economy.”

Kushner’s Deal with Israel

Kushner, who is closely aligned with Saudi Crown Prince Mohammed bin Salman, played a key role during President Trump’s first term in the so-called “Abraham Accords,” which established diplomatic relations between Israel and several Arab countries, including the UAE.

He has publicly expressed his support for Israel and his desire to invest in the country, describing Affinity last year as “long-term optimistic” about Israel, with hopes for a future normalization deal between Israel and Saudi Arabia.

In July 2023, Affinity agreed to a deal to purchase an initial 4.95% stake in Phoenix for around 470 million Israeli shekels ($130 million), with the option to double their stake at the same price pending approval by the Israeli Capital Market Authority.

This purchase was completed on January 20, and since Affinity’s initial investment, Phoenix’s stock price has risen, giving Affinity a paper profit of about 700 million Israeli shekels ($191 million), according to Tel Aviv Stock Exchange data.

In a January statement on Affinity’s investment in Phoenix, Kushner said the deal was “rooted in my belief in Israel’s resilience,” and described Affinity’s partners as “some of the most sophisticated investors in the region.”

However, Middle East Eye’s investigation raises questions about whether Gulf states are now indirectly facilitating or benefiting from companies linked to settlements, even as Palestinians in the West Bank face escalating military aggression, which has led to the displacement of tens of thousands of people and increased settler attacks.

In July, the International Court of Justice ruled that Israel’s presence and actions in the West Bank, which it has occupied since 1967, are illegal and must end as soon as possible.

But the following month, the Israeli occupation launched wide-scale operations in Jenin, Tulkarem, and Tubas, and in January, Israel launched a new major assault on Jenin and Tulkarem, the longest in two decades. This ongoing operation has displaced about 40,000 people in the last seven weeks, with UN officials warning that the facts on the ground are aligning with Israel’s vision to annex the West Bank.

Why Are Gulf States Supporting Affinity?

Organizations monitoring companies operating in settlements have noted that it is not surprising for an investor as large as Phoenix to hold stakes in companies accused of complicity in expanding settlements.

However, the Gulf’s investment in Israeli occupation, especially from countries that have not signed normalization agreements, represents a new element and contradicts the public stances each country has taken against Israeli activities in the West Bank.

In October, just weeks before Qatar’s Investment Authority invested in Affinity, Qatari Emir Sheikh Tamim bin Hamad Al Thani stated that Israel had deliberately expanded its “aggression” in the occupied West Bank to implement pre-existing plans, “because it sees the space is available for it.”

He added that Israel “is exploiting the international community’s inaction… to implement dangerous settlement plans in the West Bank.”

A month later, the Saudi Ministry of Foreign Affairs stated that calls from Israeli right-wing factions to annex the West Bank “undermine peace efforts, including the two-state solution, encourage war, fuel extremism, and threaten security and stability in the region.”

In January, the UAE Ministry of Foreign Affairs strongly condemned “Israeli attacks on Jenin,” stressing the need to end “illegal practices that undermine the two-state solution.”

The Palestinian human rights organization Al-Haq has urged countries to “avoid normalization projects and exercise the highest degree of due diligence when it comes to their commercial investments to ensure they are not complicit in the ongoing genocide and displacement of the Palestinian people.”

Last year, Kushner’s business ties with Gulf countries through Affinity came under scrutiny by members of the US Senate Finance Committee over concerns that the tens of millions of dollars paid to the company in management fees were an attempt by Gulf states to buy political influence and bypass foreign agent registration laws.

Kushner, who holds no current position in the Trump administration, denied any conflict of interest between his business dealings and political and family affiliations, calling calls from some committee members for an investigation “silly political stunts.”

Speaking on a podcast in December, Kushner said Affinity “proactively tried to avoid any conflicts” by communicating with investors about potentially injecting more capital in February, when the outcome of Trump’s attempt to return to the White House was unclear.

In a briefing provided to the committee in July, which the committee cited in letters and related documents, Affinity stated that Saudi Arabia’s Public Investment Fund had pledged to provide $2 billion in funds between 2021 and 2026.

The Qatar Investment Authority and an undisclosed UAE sovereign wealth fund were among other investors who committed to injecting an additional $1 billion, according to information published by the committee.

In December, reports indicated that Affinity had raised an additional $1.5 billion from the Qatar Investment Authority and Lunit, an investment fund supported by the Abu Dhabi sovereign wealth fund ADQ, and overseen by UAE National Security Advisor Tahnoun bin Zayed Al Nahyan, the brother of UAE President Mohamed bin Zayed.

Andreas Krieg, an associate professor at the Department of Defence Studies at King’s College London and a strategic risk consultant, told Middle East Eye that investing in Affinity provided “a legal way for Gulf states to put money into the wider Trump family network” at a time “when American foreign and security policy is up for sale to the highest bidder.”

In its statement to Middle East Eye, Affinity Partners said: “Regardless of partisan politics, Affinity Partners is a registered investment firm with the US Securities and Exchange Commission, and has always acted appropriately, and any claim to the contrary is false. We are fortunate to have the support of some of the most experienced investors in the world, and we work diligently for them every day.”

Middle East Eye reached out to the Public Investment Fund, Qatar Investment Authority, and Lunit for comment, but none of them responded by the time this report was published.

The United Nations Monitors

In 2016, the UN Human Rights Council tasked the UN Office of the High Commissioner for Human Rights with creating a database of companies involved in activities in illegal Israeli settlements as a resource to help countries take action to prevent companies from “committing or contributing to serious human rights violations against Palestinians.”

The list was meant to be updated annually, but the first edition, which included the names of 112 companies, was not published until 2020. Fifteen companies were removed from the list, and no new companies were added when the list was last updated in 2023.

For a company like Phoenix, it is nearly impossible to avoid such investments in occupied territories. This also applies to all major investors entering the Israeli market, according to Naoum Perry of the American Friends Service Committee.

Last year, the High Commissioner for Human Rights called for input before the next update of the list, but the database is not currently on the agenda for the current session of the UN Human Rights Council in Geneva, which began earlier this month and runs until April 4.

A spokesperson for the High Commissioner for Human Rights told Middle East Eye that the office is currently assessing around 850 submissions related to more than 650 companies, and an updated database is expected at the next Human Rights Council session in September.

Al-Haq told Middle East Eye it hopes the next version will result in a “major expansion of the list,” but noted that the database “is still just a small point on the surface of the number of companies deeply complicit in war crimes and crimes against humanity.”

The database does not include specific details about the companies it names, except for the categories of activities they are accused of being involved in.

Most companies associated with Phoenix are accused of being involved in one or more settlement-related services and facilities; providing banking and financial services; or using natural resources, such as water or land, for commercial purposes.

Companies in Phoenix’s Investment Portfolio Linked to Settlements

• • Banking: Phoenix is a major shareholder in Israel Discount Bank (7.65%), Bank Leumi (7.39%), and Bank Hapoalim (7.35%), according to Tel Aviv Stock Exchange data.

According to Who Profits from Occupation, an Israeli research center tracking companies operating in the occupied territories, the three banks have helped construction companies involved in building settlements.

• • Telecommunications: Phoenix also holds significant stakes in Cellcom (6.49%) and Partner Communications (8.22%).

According to Who Profits from Occupation, both companies have installed dozens of mobile phone towers in the occupied territories and have received licenses from the Israeli Ministry of Communications to provide services to settlements.

• • Construction: Electra (6.68%), an engineering and construction company, has been involved in projects in the occupied territories, including the Jerusalem light rail, tunnels connecting Jerusalem to the West Bank, and wastewater treatment facilities.

Shapir Engineering & Industry (8.15%) runs quarries and concrete factories in the West Bank and has also been involved in construction on occupied land.

• • Energy: Paz Retail & Energy (formerly Paz Oil) (6.77%) operates fuel stations in the settlements and the occupied West Bank.

• • Retail: ZMH Hammerman (9.92%) owns real estate in the West Bank, including shopping centers; Shufersal (8%) operates supermarkets and other stores in settlements; Delta Galil (5.9%) manufactures clothing and has stores in settlements.

• • Transportation: In 2022, Globes reported that Phoenix bought a 14% stake in Meyer Trucks and Cars, a private company also listed in the UN database. Who Profits from Occupation claims it supplied the Israeli Ministry of Defense with vehicles and operates bus lines between settlements through a subsidiary.

Phoenix also owns 3.88% of Elbit Systems, Israel’s largest arms manufacturer. Elbit is not listed in the UN database, but pro-Palestinian lobbying groups have accused it of complicity in Israel’s illegal occupation and alleged war crimes in the West Bank and Gaza.

Middle East Eye contacted all companies named in the UN High Commissioner’s database for comment, but none responded.

Naoum Perry, a strategic research coordinator at the American Friends Service Committee, which monitors corporate complicity in state violence, told Middle East Eye that it is nearly impossible for institutional investors in the Israeli economy, such as Phoenix, to avoid exposure to settlement activities.

“Israeli settlements are integrated into the local economy, and Israeli law treats exclusion from them as a form of illegal discrimination,” Perry said.

As such, it is impossible for a company like Phoenix to avoid these investments. The same applies to all major investors entering the Israeli market, according to Middle East Eye.