George Allen's Israeli business ties arise as new campaign issue.

Sep. 24/25, 2006 -- While Virginia Republican Senator George Allen continues to express surprise about his "recently discovered" Jewish background of his mother, he developed very close business deals with Israeli companies while Governor of Virginia and after leaving Richmond. In 1995, then-Governor Allen created the Virginia-Israel Partnership to promote trade between Virginia-based and Israeli companies. After leaving office in 1998, Allen joined the board of Xybernaut Corp., which maintained offices in northern Virginia. The firm's chairman, Edward Newman, was a former CIA agent. However, Xybernaut, which was eventually shrouded in controversy after a major stock fraud scandal involving the firm was investigated by the Securities and Exchange Commission, was a contrivance with connections to dubious Israeli players, according to sources familiar with Allen's past with the firm. Xybernaut, whose actual owners remain largely unknown, received most of its revenue from off-shore entities in Israel, Liechtenstein, Turks and Caicos Islands, Cayman Islands, British Virgin Islands, and the Bahamas. Xybernaut, now involved in wireless mobile communications, was a major beneficiary of Virginia Israel Advisory Board contracts promoted by Allen as Governor and while a member of its board and later, as U.S. Senator.

George Allen's Israeli business ties arise as new campaign issue.

The Allen-Xybernaut relationship is of major interest to the Jim Webb campaign.

Wayne Madsen Report