Is State Department Lying to Congress on Sale of Ambassador’s Residence in Israel?

Congressional staffers have heard State Department representatives say the government has yet to close on the sale of the United States Ambassador’s residence in Israel—but documents obtained by The Daily Beast reveal that State is misleading Congress on the sale.

Israeli land registry documents, obtained by The Daily Beast, show legal notification that a Delaware-registered company, Bayit by the Sea, has a lien, or legal claim, to the plush federal property as of Wednesday, September 23rd.

The State Department did not respond to a request for comment.

Four sources have confirmed that Bayit by the Sea (bayit means “house” in Hebrew) is a limited liability company owned by Las Vegas casino magnate Sheldon Adelson, who is the top financial backer for both President Trump and his close ally, Israeli Prime Minister Benjamin Netanyahu.

In preliminary briefings held by House Foreign Affairs Committee investigators, State Department representatives have claimed that the deal is not closed—implying it was not being rushed ahead of the November 3rd election, as Democrats fear.

But if the sale is, as it appears, an Israeli real estate transaction, the deal is considered to be closed, with only the legal transfer of title still to be completed. Two attorneys familiar with Israeli and American real estate law explained that the title documents “confirm a commitment in writing to execute a real estate transaction.”

“There's a difference between U.S. and Israeli law,” one said. “In Israel, a contract closes when the contract is signed. What the note says is that a deal has been signed. If the Department of State and the U.S. registered company signed the deal in the U.S. it is not considered closed, but there is a lien on the property. Here, it is a signed commitment to execute a deal.”

“They rushed to sell the residence so as to prevent a Biden administration from changing the policy,” said Daniel Kurtzer, who served as U.S. ambassador to Israel under President George W. Bush. “The reality is that this administration has done so many abnormal things, and broken so many legal and procedural boundaries, that this is not surprising.”

Ahead of the sale, Democratic presidential candidate Joe Biden said he would not reverse the embassy move if elected.

Adelson and his Israeli-born wife, Miriam, are the most generous American political donors of the past twenty years.

The State Department has not publicly confirmed that the buyer is Adelson, but Congressional aides and other persons familiar with the transaction confirmed his identity to the Daily Beast.

The deal was handled by a Tel Aviv-based realtor, Amy Link Givati of Cushman & Wakefield and Inter Israel, and by the Tel Aviv legal firm Hamburger Evron, and is registered with the Israeli Lands Authority.

The U.S. embassy, which referred The Daily Beast to “the Israeli government” when asked about the status of the sale, declined to respond to all questions related to the transaction.

The Israeli financial daily Globes reported that Adelson closed on the U.S. ambassador’s residence in the upmarket town of Herzliya, north of Tel Aviv, for a cool $87 million. It is the highest price ever paid for a residence in Israel. Adelson appeared to be vacationing in balmy Croatia, where his huge private Airbus 345 is parked at Dubrovnik airport and his yacht, the Queen Miri, is cruising off the Adriatic coast.

Following Globes’ revelation of the sale, the State Department issued a terse statement acknowledging that it had “selected the buyer for the sale of the former Chief of Mission Residence in Herzliya, Israel,” just north of Tel Aviv, adding that “the buyer was selected solely on the basis of having submitted the highest and best offer.”

The hefty, unexpected deal is being investigated regarding numerous possible breaches of regulations for the sale of federal property, and is seen by Democrats as an attempt to cement Trump’s 2018 relocation of the United States embassy from Tel Aviv to Jerusalem is Trump loses reelection in the November election.

It is not a vote of confidence in the president, who last month scolded Adelson for not donating even more than the nearly $1.2 million Adelson and his wife have already given to support his re-election.

Federal disclosures made this week revealed that the Adelsons have given an additional $50 million to Senate Majority Leader Mitch McConnell’s Senate Leadership Fund.

For now, there is no alternative residence for the ambassador, David Friedman, Trump’s former lawyer, who currently uses a suite at Jerusalem’s King David Hotel or rooms at the former Jerusalem Consulate General when he spends nights in Jerusalem.

Due to their size and to what a person familiar with State Department security requirements defined as “accessibility issues,” neither facility is suitable as a permanent residence. As a result, the United States appears likely to end up leasing the residence it has owned since 1964 from the GOP-affiliated casino mogul.

“It is very strange that we are now paying Sheldon Adelson,” a congressional aide told The Daily Beast. “It is not above board. We have a number of questions. Did they get two independent appraisals? Was it a sweetheart deal? Was Adelson the highest donor? Was there a reason to sell it now?”

The committee is also investigating the possibility Adelson purposefully overbid, in the expectation of reaping policy favors in the future.

The expansive beachside property should not have been sold “at a fire sale,” Kurtzer said. “There is no particular reason to have moved so quickly. The United States government doesn’t need the $80 million and certainly not in a situation in which we will pay him to rent it back— it’s really a corrupt deal.”

Two persons familiar with the transaction, who were not authorized to discuss the deal publicly, said that “dozens of offers” had been received.

Adelson’s influence on American foreign policy is not limited to the purchase of the residence.

Adelson “and his wife are extraordinarily malign influences on politics in our country,” Kurtzer, now a professor at Princeton, says. “They have used their very substantial wealth to support the most right-wing politics here and in Israel.”

“For those of us who believe the Trump administration has done significant damage to the prospects for peace, the funders and the enablers of that damage are the Adelsons,” he said.

But Hussein Ibish, a scholar at Washington’s Arab Gulf States Institute, said that while Trump is surely “grateful that Adelson came around to supporting and bankrolling him after initially holding back in 2016…his influence on Trump's Middle East and Israel policies is often overstated.”

What really drives Trump, according to Ibish, and may explain both the White House ceremony and the precipitous sale of the luxurious Herzliya property, “is the political power of the massive radical Christian fundamentalist organizations and voting blocks” devoted to a dream of the greater land of Israel “as a necessary prelude to the apocalypse.”