A Bank of Montreal (BMO) subsidiary loaned an estimated US$90 million in 2021 to a defence-tech company that makes weapons and surveillance equipment used by the Israeli military, The Breach has learned.
The bank joined five other creditors who provided a total half-billion-dollar loan to Elbit Systems of America, according to a document that was found on a global financial database and reviewed by The Breach.
Elbit’s equipment includes armed drones—one of which was involved in the killing of four Palestinian children playing on a beach during the 2014 Gaza war—and surveillance tech marketed as “field proven” in the West Bank and Gaza Strip that has been used at the U.S.-Mexico border.
BMO Harris, the American branch of the Montreal-based bank, joined Wells Fargo, Bank of America, BNP Paribas, Capital One and Regions Bank in the loan to Elbit’s U.S. subsidiary.
The loan is out of step with other banks around the world, which have bowed to public pressure to stop investing in the company for its human rights violations.
British bank HSBC divested from Elbit in 2018, and funds in Australia and Norway have banned investments in the company for producing cluster munitions, which Elbit denies.
But the BMO loan is part of increasing support from Canadian banks, after Scotiabank became Elbit’s largest foreign shareholder last year. More than 10,000 people have signed a SumOfUs petition calling on Scotiabank to divest.
SumOfUs requested meetings with BMO twice in November and both requests went unanswered, senior campaign manager Angus Wong told The Breach.
“It’s definitely appalling to hear that more Canadian banks are lining up to invest in this company,” said Michael Bueckert, vice president of Canadians for Justice and Peace in the Middle East.
As a BMO customer himself, Bueckert said he was “disgusted” to learn the news.
Canada’s ‘bad example’
“The Canadian government hasn’t exactly been setting a good example” for the banks, Bueckert told The Breach. The federal Liberal government is spending more than CAD$44 million on contracts with Elbit for a surveillance drone and a “battle management” system.
“Canada is demonstrating to Canadians that Elbit is a legitimate company and that it’s OK to do business with them,” Bueckert said. “We need to be putting pressure on banks, but we need to be putting pressure on the Canadian government as well—there should be absolutely no business dealings with a company that is so deeply committed and complicit in war crimes.”
Elbit also manufactured surveillance technology used along Israel’s illegal border wall that encircles and encroaches on the West Bank, according to the organization Al-Haq.
“Elbit Systems works closely with the Israeli military to tailor its products for the needs of the military, whose main job in recent years is suppressing Palestinian rights in the occupied territories,” said Noam Perry, the coordinator of economic activism with the American Friends Service Committee and a creator of the online investment research tool Investigate.
Investigate’s research notes that after developing surveillance systems for the occupied territories, Elbit and its subsidiaries brought their products to North America.
Weapons maker hailed Trump’s ‘new vibe’
In 2017, the head of the company cheered Donald Trump’s inauguration as president of the United States.
“Trump’s election is creating a new vibe in the defence arena,” Elbit president and CEO Bezhalel Machlis said.
Marketing its technologies as “field proven” on the world’s “most challenging borders,” Elbit won contracts to build watchtowers on the U.S.-Mexico border. They were outfitted with day and night cameras and radar that identifies people as far away as 12 kilometres, according to Investigate.
Elbit became one of the top profiteers of the border’s militarization, according to the Transnational Institute.
Total loan topped half a billion dollars
The loan that BMO Harris participated in, which has not previously been reported, was discovered by financial researchers last year, who provided documentation to The Breach.
The total loan from all six creditors was given out in two portions worth US$100 million and US$454 million, Ward Warmerdam, a senior financial researcher with the Amsterdam non-profit Profundo, told The Breach.
Warmerdam estimated that BMO Harris contributed US$90 million by dividing Elbit’s total loan by the number of creditors, a methodology chosen based on details in the loan’s documentation.
Representatives for BMO Harris did not respond to questions sent by email. The company’s media phone line is out of service.
American Friends Service Committee’s Perry says that there is no meaningful difference between Elbit’s Israeli branch and its American subsidiary.
“We treat them as the same company,” he said.
Elbit’s Texas subsidiary even allows it to receive a portion of U.S. foreign aid to Israel, Perry said, because Israel is required to spend some of the military funding it receives with American companies.
Investigate recommends investors take their money out of any company that consistently, directly and knowingly enables state violence, Perry said.
‘Blood on its hands’
When Scotiabank became Elbit’s largest foreign shareholder last year, SumOfUs highlighted the company’s role in Israel’s attacks on Gaza in 2021.
“Elbit weapons were heavily used during Israel’s 11-day onslaught against Gaza in May 2021 which left 248 people dead,” SumOfUs said in an announcement in October 2022.
“Becoming Elbit Systems’ largest foreign shareholder means Scotiabank has the most blood on its hands from the murder of thousands of people.”
Scotiabank owns about US$440 million worth of shares in Elbit, which make up 5 per cent of the company.
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