Second Israeli in Space Funds His Trip With Offshore Dollars

An investigation has found the money trail behind Israeli billionaire Eytan Stibbe’s space flight next week ■ Funding comes from his company in the British Virgin Islands, and then registered in the books of the Ramon Foundation ■ Some of the money for experiments to be performed during the flight comes from the Israeli taxpayer ■ An investigation by Shomrim

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Three billionaires and an ex-NASA astronaut: the Ax-1 crew during a Zero-G flight training. Israeli mission specialist Eytan Stibbe is on the left.
Three billionaires and an ex-NASA astronaut: the Ax-1 crew during a Zero-G flight training. Israeli mission specialist Eytan Stibbe is on the left.Credit: - - AFP
Uri Blau
Uri Blau
Uri Blau
Uri Blau

On April 3, Eytan Stibbe is expected to be launched into space, becoming the second Israeli citizen to leave the confines of Planet Earth. The mission has been dubbed “Rakia” (“firmament”). Stibbe will remain on the International Space Station for eight days and will perform scientific experiments. The flight ticket comes with a hefty price tag of $55 million.

The public relations blitz accompanying the space mission has somewhat blurred Rakia’s blending of private space tourism and a national mission. But Rakia, as revealed here, also mixes between Stibbe’s businesses and philanthropy, and is linking an Israeli NGO and a Caribbean tax haven. The State of Israel, we also found, has invested hundreds of thousands of dollars in expenses related to this mission, and payment for the flight comes from a company that is registered in the British Virgin Islands. Funds for other parts of the mission were registered in the books of a nonprofit organization, the Ramon Foundation (which is named after Ilan and Assaf Ramon), something which may save Stibbe substantial tax payments.

Stibbe enjoys the aura surrounding this mission, and has given extensive interviews about it in recent weeks to various TV stations. When the questions become tougher, he apparently doesn’t see the need to explain his conduct, choosing not to respond to this story.

Israeli businessman Eytan Stibbe. Former partners in Stibbe’s LR company are demanding compensation of more than one billion shekels ($321 million).

A national project’

Stibbe’s road to space passed through several stations, chiefly the Ramon Foundation. The foundation was established after the death of Ilan Ramon in the Space Shuttle Columbia disaster in 2003. Among its goals is the “bolstering of space education.” Stibbe, who was Ramon’s friend in the Israel Air Force, was a member of the NGO from its establishment.

A person familiar with the foundation explained that back in the days when it was managed by Rona Ramon, the late widow of Ilan Ramon, there was the intention to send a female Israeli astronaut to space, but the required funds were never found. According to this person, years later there was a merging of interests between Stibbe’s desire to fly to space and the foundation’s need to find its way forward after Rona Ramon’s death in 2018. The Rakia mission, says this source, was a booster shot for the NGO and its activities.

For most of the years it has been operating, the foundation’s annual turnover was a few million shekels, coming mainly from donations. The last public financial report (in 2020) showed a spike, with the turnover climbing from 10 million to 130 million shekels ($40.4 million). The report says that 120 million shekels were donated as a “monetary equivalent” for the Rakia mission by the Tyros International Group, registered in the British Virgin Islands. It should be noted that the costs of the mission are much higher, and the difference is expected to appear in the foundation’s financial reports in the coming years.

Scenic aerial view of capital Tortola of British Virgin Islands.Credit: i7pu3pak/Shutterstock

    The agreement between Tyros and the foundation was signed in October 2020. The purpose was for Tyros to donate money directly to the Ramon Foundation, or, in its name, to Axiom, the company that launches and manages the flight, for the purpose of sending a second Israeli to space. This agreement, as reported to the registrar of nonprofit organizations by the foundation, “enables the Ramon Foundation to manage the space mission, in order to maximize the foundation’s efficiency.” The Ramon Foundation denied a request by Shomrim, the Center for Media and Democracy, to view the agreement.

    Tyros is a company Stibbe uses for some of his businesses. Through it, for example, he invested millions of dollars in a company called Kvasir Education, founded in 2014 for the purpose of providing online academic science education. A prospectus submitted to the stock exchange by Kvasir says that “Tyros is a private company incorporated in the British Virgin Islands, indirectly and totally held by Mr. Eytan Stibbe.”

    The International Space Station. The public relations blitz accompanying the mission has somewhat blurred Rakia’s blending of private space tourism and national mission.Credit: NASA/Roscosmos / HANDOUT/Reuters

    What does Stibbe gain by carrying out this mission through the Ramon Foundation? Different people have noted the symbolic value of a flight that’s presented as a national project (in contrast to private space tourism by millionaires), as well as the emotional impact of the friendship between Stibbe and Ilan Ramon.

    Nevertheless, donating the mission to the foundation may have financial significance as well. Accountants explain that any benefits a salaried employee or company owner gets from a company are taxable. This includes gift vouchers for holidays or a ticket to space, both of which are considered taxable income. They add that the donation of the Rakia mission to the Ramon Foundation may resolve this problem, ostensibly saving Stibbe millions of dollars in taxes. That would not likely be the case if Tyros would have purchased the ticket for him. That said, we should emphasize that it’s not known whether the value of the ticket will be counted as part of Stibbe’s income, or whether he will be taxed on it. According to earlier publications, the second Israeli astronaut has, ironically, claimed in the past that he is a British resident. He refused to answer questions sent to him about this issue.

    A sign congratulating Stibbe in seen in the upper class city of Savyon. Stibbe is identified in one of the documents as an Israeli citizen from Savyon.Credit: Moti Milrod

    Ran Livne, the Ramon Foundation’s director general, said in a written response that “the details of this donation have been published and are available to the general public. The entire financing of this mission was reported to the Tax Authority by the foundation and by Stibbe. Moreover, the foundation’s reports are available on the internet for anyone interested in seeing them. The foundation abides by all the rules of correct administration, and any attempt to present this as a sophisticated attempt to conceal income is baseless. The manner in which the donation was registered was determined by legal and tax advisers at the foundation in a totally transparent manner, in order to abide by the regulations of the registrar of nonprofit organizations and the Tax Authority.”

    Livne added that “neither Stibbe nor anyone acting on his behalf have ever asked for documentation of the donation for tax benefit purposes. We’ve learned that neither he nor anyone associated with him are seeking tax benefits relating to the Rakia mission.”

    Livne noted the professional team at the foundation is the group that approved the way the donation was registered. In this context, it is noteworthy that Shaul Zipris’ accounting firm is registered as the comptroller of the Ramon Foundation. This firm knows the future astronaut. Stibbe and Zipris are Tyros’ representatives in the management team of a company called Sintra Griffin 2021, a limited liability company recently established in Florida. The headquarters of this company, like those of Tyros and other businesses owned by Stibbe, are located in Cyprus.

    ‘An educational initiative’

    At least in one interview, Stibbe has spoken proudly about the Israeli flag sewn onto his astronaut’s suit. Stibbe’s company is paying for the flight, but the flag is not just an ornament. It turns out that the Israeli taxpayer is participating in the financing of an experiment to be conducted in space.

    In a meeting held last June, a bidding committee at the Science and Technology Ministry approved an exemption of up to 930,000 shekels for the purpose of taking part in the Rakia mission. “Israel’s Space Agency at the ministry wishes to be a partner to a historic step having an immense impact on Israel’s future generation,” the minutes of this meeting state. “The mission will enable entrepreneurs, scientists and researchers in Israel to promote innovative ideas, providing a rare opportunity to examine their initiatives in a unique research environment, thereby contributing to science and the space industry in Israel and overseas.”

    The Science Ministry issued a call for proposals for experiments in microgravity, with funding set at 1.5 million shekels. Four experiments were selected and budgeted for. One of these will be taken to the space station by Stibbe. Furthermore, the ministry has budgeted for an “educational initiative” relating to Rakia to the tune of 400,000 shekels. This is a paltry sum in comparison to the mission’s total costs, but the national intervention contributes to the blurring of boundaries between Stibbe the businessman, who is going to space at his own expense, and Stibbe the astronaut, a role model for Israel’s children. Can the two even be separated?

    A man drives a motorcycle as Haitians protest along the streets against their country's unstable economic, political and social situation in Port-au-Prince, Haiti, last month.Credit: RALPH TEDY EROL/ REUTERS

    A search in the archives reveals business activities that could be perceived as less favorable. For example, former partners in Stibbe’s LR company are demanding compensation of more than 1 billion shekels, claiming that he deceived them during the dissolution of their partnership. Stibbe’s lawyers told a court that their arguments were baseless.

    There is also a secretive mediation process underway between Stibbe and another partner, Avi Buzaglo-Yoresh, who claims that Stibbe owes him anything from tens to hundreds of millions of shekels for some business operations in Africa. Stibbe said in response to reports on this issue that his connection to the affair is minuscule. Deals with the government of Angola as part of LR’s business, including the sale of two Soviet-era Sukhoi 27 fighter jets, will also be hard to present as a model of emulation to the country’s youth.

    When Eytan Stibbe is asked about his current business ventures, he chooses to focus on projects related to agriculture, and on “impact investments” in developing countries.

    “We have sewage purification projects in Africa, an oncological hospital in Ukraine, green energy projects in India, modern green neighborhoods, and a dairy in Uganda. We only deal with investments that have social returns, which we measure using hundreds of different criteria, in order to choose which one will have the highest impact,” he said in an interview he gave last year to Gali Weinreb for the Israeli financial newspaper Globes. Documents revealed here for the first time show that along with these business activities, Stibbe conducted, at least until recent years, other businesses as well.

    A re-examination of the Panama Papers, uncovered by the International Consortium of Investigative Journalists (ICIJ), brought up the name of a company called HLS International, from the Seychelles Islands. The leaks contained hundreds of documents relating to this company and Stibbe features in only a few of these. They reveal an unknown aspect of his businesses: In 2017, after the dissolution of LR, when Stibbe was already involved in impact investments, a letter was sent to the Mossack Fonseca law firm, the origin of the Panama Papers leak. The letter notes that the final beneficiaries of the company are Eytan Stibbe and his then-partner Haim Taib (from whom he separated in 2019) Stibbe is identified in this document as an Israeli citizen from Savyon. The company’s business, said the letter, was Homeland Security in Angola and Haiti. Stibbe’s signature can be seen in his own handwriting. It should be noted that holding a trust or other company in a tax haven is not a violation of Israeli law.

    A general view Luanda, Angola's capital, in 2015.Credit: Stringer ./ REUTERS

    Other documents relating to this company show that in 2016, the authority charged with fighting money laundering in Seychelles paid a visit to the offices of Mossack Fonseca in order to examine documents. Before this inspection, Stibbe’s company was requested to provide Mossack Fonseca with various documents, including some that exposed its owner.

    Stibbe, as noted, chose not to respond to this story.

    It turns out that the Israeli taxpayer is participating in the financing of an experiment to be conducted in space.Credit: NASA

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