Super-rich Israelis no longer ashamed to flaunt their wealth

Reporting from Tel Aviv — 

Israel’s hottest new TV show may be making many viewers feel guilty. But they can’t stop watching it.

It’s a “Real Housewives” reality-based knockoff about six rich, materialistic women bouncing from personal training sessions in their mansions to Botox appointments to champagne-fueled shopping binges, dishing dirt about one another and generally reveling in their own fabulousness.

Hardly scandalous stuff to American TV viewers. But in the land of the kibbutz — a nation founded on egalitarian ideals, where lawmakers still wear jeans in the Knesset, or parliament, and the flaunting of wealth was once considered taboo — this unapologetic celebration of the lifestyles of the rich and Israeli is hitting a raw nerve.

“The show is just terrible,” said Sharon Dushnitsky Etzioni, a Tel Aviv event planner. “It’s not the real Israel.” Then she adds, sheepishly, “But as much as I hate it, I can’t miss it. I’m so angry at myself.”

What “The Riches” depicts, though, may be more accurate than many here would care to admit. In 20 years, Israel has whiplashed from being essentially a socialist state to a place with one of the world’s biggest gaps between rich and poor.

That’s partly because Israel’s poor are getting poorer, but also largely because incomes of the super-rich have soared to new levels, bolstered by tax cuts, deregulation and an influx of Russian entrepreneurs who brought money with them when they immigrated.

The number of Israeli billionaires doubled over the last two years to 16 while their combined wealth tripled to $45 billion, according to Forbes magazine. Recently deceased shipping magnate Sammy Ofer led his countrymen with $10.3 billion, followed by diamond mine mogul Benny Steinmetz and Carnival Cruise heiress Shari Arison.

While much of the world struggles with recession, Israel’s economy is going strong and is minting new millionaires at a faster rate than just about any other country. The number of Israeli millionaires nearly doubled to 10,153 from 2008 to 2010, according to the Merrill Lynch-Capgemini World Wealth Report.

Those who are super-rich are no longer squeamish about displaying their wealth. One tycoon is building a 60,000-square-foot estate in the ancient city of Caesarea, along the coast between Tel Aviv and Haifa. Plans are underway for a special terminal at Ben-Gurion airport to handle the bustling traffic in private planes and helicopters. The national motor vehicle department said recently that it had to draft new regulations to allow for the import of Rolls-Royces, Lamborghinis and Aston Martins.

“Before, people in Israel were ashamed to be rich,” said luxury real estate broker Meir Menahem, sipping a latte at his oceanfront office. “Even if you had money, you lived simply. Today, people are not ashamed. If they are making money, they want to live better.”

His firm, Neot Shiran, is helping the super-rich find new places to spend their money by promoting exclusive residential communities along the Mediterranean Sea north of Tel Aviv, where former kibbutz-owned farmlands are being transformed into the Hamptons of Israel.

One of the most desirable spots is tiny, seaside and gated (naturally) Arsuf, where the price of one vacant lot tops $15 million, Menahem said.

If you’re looking for that Malibu ranch atmosphere and need space for tennis courts and stables, there’s sprawling Bnei Zion, where all you can see from the roads are intercoms and driveways. Land is zoned agricultural, so it won’t cost as much to fill the pool or water the putting green.

But Herzliya Pituach, nestled on the seaside bluffs of the north Tel Aviv district, remains the standard-bearer for those seeking the ultimate address. This year the sale of a $36-million home, next door to the U.S. ambassador’s house, broke Israel’s record for a residential transaction.

It’s a high-end, all-cash market that didn’t exist when Menahem started in the mid-1990s. Back then, a 2,000-square-foot house was considered big and sales topping $1 million were rare.

Israel began shifting from its socialist roots in the 1980s and 1990s. Deregulation, privatization and tax cuts — which peaked when current Prime Minister Benjamin Netanyahu served as finance minister a decade ago — opened opportunities for a handful of the nation’s richest families and recently immigrated Russian oligarchs to take over former state-run businesses. Today, Israel’s economy is one of the most concentrated in the world, with about a dozen tycoons controlling a large portion of the country’s banks, manufacturers, real estate firms, food producers, media outlets and retailers.

State-owned “corporations were sold off to very wealthy families and this provided opportunities to accumulate a lot of wealth,” Hebrew University professor Michael Shalev said.

He said the growing income gap became one of the rallying cries of this summer’s large social justice protests, when hundreds of thousands of middle-class Israelis took to the streets over the rising cost of housing and food.

“It reflected a feeling of the people that these tycoons are robbing us,” Shalev said.

But despite their resentment, many middle-class Israelis also aspire to emulate the rich lifestyles they see. “Israelis have largely embraced the idea, with vigor, that if you’ve got it, flaunt it,” Shalev said.

That explains the success of the all-female reality show “The Riches,” or “Meusharot” in Hebrew, which debuted in October and is already Israeli Channel 10’s top-rated show.

“People in the middle want to see how the rich live, to open the door and look inside,” Nicol Raidman, 25, one of the show’s stars, said in her glittering clothing boutique along Tel Aviv’s fanciest shopping avenue. Outside, throngs of excited teenage girls peered through a window on a recent afternoon, hoping for a peek at or picture of the stylish Ukrainian-born entrepreneur.

Fingering a bejeweled cellphone with black-enameled fingernails, Raidman says the influx of more than 1 million Russian immigrants in the 1990s helped give Israel a stronger appreciation for flash and style.

“This is the only place in the world where men wear Crocs [plastic sandals] to a restaurant,” she said in mock horror. “When I come back from a visit to Moscow, I think Israel is still a village. But it is starting to change. Russians are showing Israelis how to enjoy life and how to enjoy money.”

She credited her success to hard work, though fans note that having a much older, rich Russian boyfriend didn’t hurt either.

The growing interest in keeping up with the Cohens is apparent in Israel’s social scene. Real estate billionaire and New York’s Plaza Hotel owner Yitzhak Tshuva reportedly spent nearly $2 million on his son’s wedding this year, an “Alice in Wonderland”-themed bash held on 150 acres of borrowed national parkland. Singer Paul Anka, who serenaded the happy couple, was said to have commented that the soiree put Las Vegas to shame.

Not to be outdone, a wealthy grandmother threw a Harry Potter-themed bar mitzvah during which her grandson flew in on a broom.

“People want to spend money,” said Zohar Mieli Ravel, co-owner of Private Productions, the party-planning firm that produced the wedding. “You can feel it.” (Her partner is Etzioni, the reluctant fan of “The Riches.”)

Yet at the same time, this summer’s protest may have had an impact. Ravel and Etzioni’s clients, including many new high-tech millionaires who sold their ventures to U.S. corporations, have begun to apply the brakes, scaling back or canceling some events. “People don’t think now is the best time to be showing off,” Ravel said. “But I don’t think it’s permanent.”

Many of the summer protesters called for the government to crack down on Israel’s super-rich by hiking taxes, controlling prices for food and housing or breaking up private conglomerates. So far, such steps have found little support in the Knesset, although lawmakers did vote this month to raise the top income tax bracket from 45% to 48% as a gesture to demonstrators.

“The direction that the social protesters want to take the economy is a grave mistake,” said Raidman, the new reality TV star. “They should be inspiring everyone to reach a higher level, rather than drag down those who already have.”

Yet her show underscores the growing divide. During a recent episode, fellow cast member Eti Dudai decided to drive her Mercedes to a tent city in Tel Aviv to better understand the demonstrators’ complaints. Channeling Marie Antoinette, she brought cake for them to eat.

But then, when a skeptical tent-dweller asked whether she knew the price of tomatoes at the supermarket, she acknowledged she was stumped.

“Unbelievable,” muttered one protester in disgust, as the others drifted away.

edmund.sanders@latimes.com

News assistant Batsheva Sobelman in The Times’ Jerusalem bureau contributed to this report.