This story was co-published with ProPublica.
A top aide to the U.S. ambassador to Israel has financial ties to entities involved in Israel policy or that could have business with the government, according to newly released disclosure forms.
One of the groups, an anonymously funded nonprofit called Shining City Community that has been involved in U.S. and Israeli politics, owes perhaps as much as $50,000 to Aryeh Lightstone, a senior adviser to U.S. Ambassador to Israel David Friedman, according to his financial disclosure forms.
Lightstone, a Long Island businessman and rabbi, reported he is also retaining three positions outside his government job. Separately, he reported receiving outside income from two firms after he was hired in July 2017 by the State Department.
Lightstone pledged to recuse himself for one year from matters related to Shining City. “The Ethics Agreement that Mr. Lightstone signed is very clear that he will not participate in any matter in which he has a direct financial interest,” a State Department spokesperson said. “His government position does not obligate him to divest from all of his investments, and every investment was declared to and cleared by the U.S. Department of State ethics lawyers.”
But an ethics expert who reviewed Lightstone’s filings criticized his ethics agreement, particularly his relationship with Shining City.
Virginia Canter, a lawyer at Citizens for Responsibility and Ethics in Washington, said because he is still owed money by the nonprofit, an anonymous donor could funnel money to him through the group without any disclosure. “It makes him very susceptible to undue influence,” Canter said.
Overall “the ethics agreement is flawed because it didn’t sufficiently address the potential conflicts up front,” she said. There are a host of potential conflicts when an official is owed money from political groups, gets outside income while in government, and keeps positions in businesses.
The ethics practices of the Trump administration have attracted widespread criticism. At least 188 Trump political appointees have been federal lobbyists, according to data compiled by ProPublica. Many now oversee the industries for which they once lobbied. Others, including President Trump and Jared Kushner, have retained stakes in their own businesses, creating a host of actual and potential conflicts.
In the case of the Virginia-based Shining City Community, Lightstone served for a period as its executive director and says he was focused on “developing education for state and federal officials regarding the dangers” of boycotts of Israel.
The Israeli newspaper Haaretz reported last year that Shining City had given about $1 million to Im Tirtzu, an Israeli organization best known for a controversial campaign attacking various writers and artists in the country as “foreign agents” for their liberal political views. James Frinzi, a Texas lobbyist who worked for Shining City, told ProPublica Lightstone had directed him to lobby in favor of a Texas law that bars state agencies from doing business with entities that boycott Israel.
Lightstone’s disclosure forms say that Shining City paid him $53,500 in 2017 and owes him an additional $15,001 to $50,000. The group has “agreed to pay as funds are available. $ comes in sporadically.” Canter said that this could create a conflict of interest. It is exacerbated because Shining City does not disclose its donors.
A State Department spokesperson said, “Lightstone now believes [the owed money] will never be paid as the entity is apparently shut down/no longer operating.” But Shining City’s Facebook page is regularly updated, as recently as a few days ago with a post stating “New 2018 DNC slogan: ‘Vote Democrat: We’ll ensure MS-13 is treated respectfully.’” The president of the board of the group, New York attorney Andrew Albstein, did not immediately respond to a request for comment.
The State Department spokesperson said: “Since entering government service, Mr. Lightstone has not performed any work for any outside entity. Any income that Mr. Lightstone has collected since beginning government service in 2017 has been in connection with services/work he performed before joining the government, but which had not yet been paid out as of the date on which he began government service.”
Shining City’s budget has ranged from $100,000 to as high as $3 million in recent years. It received a $100,000 grant sometime between April 2016 and March 2017 from 45Committee, a political nonprofit that backed Donald Trump’s presidential campaign. That group, according to the New York Times, was “heavily funded” by Sheldon Adelson, the GOP donor known for his hardline views on Israel policy. (An Adelson spokesman didn’t immediately respond to a request for comment.)
After starting in his government job, according to the State Department spokesperson, Lightstone received up to $15,000 each from real estate investment firm L3C Capital Partners and a political intelligence firm called ACG Analytics, which “advises its clients on how anticipated policy actions will impact their portfolios.” Those payments were “part of a previously agreed upon payment plan allowing the companies to pay by the end of the third quarter of 2017. All work was completed at least 30 days prior to Lightstone becoming an employee,” the State spokesperson said.
“Aryeh consulted to ACG Analytics for business development which included taking meetings in NYC,” a spokesman for the firm said. “He completed all work by June 15th 2017 and was paid out as cash flow became available. ACGA has had no further professional contact with Aryeh Lightstone.”
Lightstone’s ethics agreement does not address his relationship with ACG Analytics.
Shortly before joining the State Department last year, Lightstone went into business with two Texas state legislators who sponsored a bill countering boycotts of Israel that Shining City successful lobbied for in the state. The bill was signed into law in 2017. Lightstone’s disclosure forms show he owns a stake in a Magnolia, Texas-based business, called Etsah, or Select Mat, which produces crane mats, or temporary platforms used in heavy construction. Lightstone’s partners in Etsah are Cecil Bell Jr. and Phil King, two Texas state legislators known for their arch-conservative politics. Asked about the origins of the company, a person answering the phone at Etsah last week said, “It was a group of guys that came together and just saw the opportunity in the market.” King and Bell didn’t immediately respond to requests for comment.
Lightstone also disclosed a stake in a firm founded by beleaguered Trump associate Elliott Broidy called Threat Deterrence Capital LLC as well as a $60,000 payment for work combatting Israel boycotts from the Legacy Foundation, another political nonprofit that doesn’t disclose donors.
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