First week of Netanyahu corruption trial paints grim picture of Israeli media

The evidentiary stage of Prime Minister Benjamin Netanyahu’s corruption trial kicked off this week with witnesses painting a dour picture of a leading Israeli media outlet, controlled and manipulated by the premier.

During nearly three full days of testimony by one of the prosecution’s key witnesses, the former CEO of the Walla news site, Ilan Yeshua detailed the favorable treatment he said he was directed to give the premier in exchange for regulatory favors for the website’s owners, Shaul and Iris Elovitch, who also owned the telcom giant Bezeq, which allegedly earned them upwards of NIS 1.8 billion ($548 million).

The picture Yeshua painted in his first week of testimony is not a flattering one for one of Israel’s leading news outlets, telling the court that the website’s coverage was driven by selfish, political considerations and petty grievances, that top positions required direct approval from the Prime Minister’s Office before they could be hired and that Walla’s own editor-in-chief at the time described the situation as “an abomination.”

According to Yeshua, the prime minister effectively had total editorial control over the website’s political coverage, getting negative articles about himself and his family removed, desirable ones remaining on the homepage for hours longer than they otherwise would have, and having “hit piece” stories written about his political opponents — including in the lead-up to a national election in 2015, which Netanyahu won.

Yeshua told the court on Wednesday morning that after the election, Elovitch’s son Or sent him a WhatsApp message: “Congratulations, you gave [Netanyahu] the elections, now [he] will do what Bezeq expects him to do.”

A composite image of Prime Minister Benjamin Netanyahu (R) and Bezeq controlling shareholder, Shaul Elovitch. (Flash90: Ohad Zwigenberg/POOL)

Later in the trial, the prosecution will attempt to prove that Netanyahu did in fact do what the Bezeq telecommunications conglomerate wanted him to do in order to receive that favorable coverage, notably approving a highly suspect and allegedly corrupt merger with the Yes satellite television service in 2015 and blocking efforts to open the country’s wired internet market to Bezeq’s competitors.

A politician seeking positive coverage or maintaining a friendly relationship with a news outlet is not out of the ordinary, but the prosecution hopes to prove that this was not the case here, that the premier received his favorable treatment through an illicit quid pro quo beginning in late 2012 and continuing until 2016, when the Elovitches became concerned that a criminal investigation into the matter was being opened, at which point Yeshua told Walla’s editors “the skewed coverage ends now and don’t ask me why or how.”

These allegations against the prime minister make up one of the three cases against him — Case 4000 — in which he is charged with bribery, fraud and breach of trust. Shaul and Iris Elovitch were also indicted for bribery in this case, as well as obstruction of justice for allegedly attempting to destroy evidence.

The ‘thousands’ cases

In addition to Case 4000, Netanyahu faces charges of fraud and breach of trust both in Case 1000 — for allegedly accepting more than NIS 700,000 ($200,000) in gifts from two billionaires — and in Case 2000 — for attempting to reach a quid pro quo with Yedioth Ahronoth publisher Arnon Mozes for positive media coverage in exchange for legislation weakening rival newspaper Israel Hayom. Mozes was also charged with offering a bribe.

Netanyahu has denied all charges and alleged that the cases against him are a “witch hunt” and an attempted coup by the prosecution and the country’s judiciary. In the past, he has scoffed at the allegations of favorable coverage by Walla, repeatedly saying he was being indicted for bribery because of “two and a half news articles” about him, a claim that was emphatically contradicted by Yeshua’s testimony.

Prime Minister Benjamin Netanyahu sits with his lawyers at a hearing in his corruption trial at Jerusalem District Court, April 5, 2021. (POOL / AFP)

As Tuesday’s session opened, Yeshua told the court that he had received “unpleasant messages” — some of which have been described as threatening — over his testimony, which the presiding judge, Rivka Friedman-Feldman, said was a worrying development as it could “influence his behavior” on the stand. Netanyahu has repeatedly been accused by legal figures, as well as political opponents, of inciting violence against his prosecutors and accusers.

Case 4000 is widely considered the most severe of the three, based on the charges against him, the fact that the alleged quid pro quo actually occurred (unlike in Case 2000 where it was allegedly only discussed), and because the purported exchange resulted in direct harm to the Israeli public, primarily — but not only — in the form of slower and more expensive internet service.

Liat Ben-Ari, prosecutor in the trial against Prime Minister Benjamin Netanyahu, arrives at the Jerusalem District Court for a hearing in Prime Minister Benjamin Netanyahu’s corruption trial, April 7, 2021. (Yonatan Sindel/FLASH90)

Though this is Netanyahu’s trial — he is officially identified as “Defendant 1” in the indictment — the premier has only appeared in court for roughly 30 minutes of the roughly 20 hours of hearings that have been held so far, after he willingly forfeited his right to hear his accusers’ testimonies. He was, however, required to appear in court for lead prosecutor Liat Ben-Ari’s opening remarks on Monday, in which she accused him of a “severe case of governmental corruption” by making “forbidden use of the great governmental power in his hands.”

The first day of this evidentiary stage of the trial, which is expected to last several years if it proceeds as scheduled, coincidentally kicked off on the same day as President Reuven Rivlin began meeting with the country’s political parties to hear who they would recommend for the task of attempting to form a government. This resulted in surreal news coverage, with outlets switching between the prime minister’s corruption trial and his attempts to retain the premiership. Outside the courthouse on Monday, pro- and anti-Netanyahu demonstrators held dueling protests with loudspeakers and bullhorns, occasionally drowning out the proceedings.

Inside the Jerusalem District Court, on Salah ad-Din Street in East Jerusalem, the atmosphere has been far tamer, though the trial saw one outburst on Monday by Iris Elovitch, who interrupted Yeshua’s testimony, calling him a liar.

Due to coronavirus restrictions, the hearings are being held in a tiny courtroom, with just enough room for the defendants, their legal teams, the prosecution and the judges — all wearing face masks and separated from one another by clear plexiglass barriers. Journalists must watch the trial through a Skype-powered closed-circuit television screen in adjacent rooms.

The alleged quid pro quo

Yeshua’s testimony went to the heart of the allegation, to the favorable news coverage that the prosecution says Netanyahu and his family received from Walla news, particularly in the period before the 2015 election.

Though the overall prosecution in the case is being led by Ben-Ari, over the past week Yehudit Tirosh, who specializes in financial crimes and took the lead on Case 4000, has been tasked with questioning Yeshua.

Ilan Yeshua at the Jerusalem District Court for a court hearing in the corruption case against Prime Minister Benjamin Netanyahu, April 7, 2021. (Yonatan Sindel/FLASH90)

The defense — in this case, Netanyahu’s and the Elovitches’ legal teams — will only be able to cross-examine Yeshua once the prosecution has completed its questioning of him. But that has not prevented the defense teams from objecting to various aspects of Yeshua’s testimony on procedural grounds, arguing unsuccessfully that some of the evidence was collected improperly and shouldn’t be accepted and that the witness had been told things by the prosecution during a “refresh” session that he hadn’t known from his questioning by police.

These objections have occasionally resulted in small but heated quarrels between Tirosh and the defense. In one such incident, Judge Friedman-Feldman told Tirosh to “bring down the temperature” and the prosecutor joked that she “has a bit of a temperament.”

Yeshua’s testimony has largely been supported by emails, WhatsApp messages and text messages between himself and Shaul Elovitch, in which the latter explicitly stated in some cases that positive coverage of the Netanyahus was needed to ensure that the prime minister would approve the hugely lucrative merger between Elovitch’s Bezeq telecommunications conglomerate and the Yes satellite television provider, in which he also owned the majority shares.

Israeli businessman Shaul Elovitch and his wife Iris at the District Court in Jerusalem, April 6, 2021. (Yonatan Sindel / Flash90)

“Take [the article] down now. It’ll prevent me from getting permission for Yes. I’ll kill you,” Elovitch wrote in one such exchange presented by the prosecution on Wednesday.

The article in question dealt with a scandal involving the prime minister’s wife, Sara Netanyahu, in which she was accused of illegally pocketing the money from refunds for bottles and cans purchased by the state for official events at the Prime Minister’s Residence.

On Monday, Yeshua explained that Walla was also barred from negative coverage of Sara.

“If she gets upset, he’ll get upset, and if he gets upset, he’ll cause damage. They would say things like that, that she is the most important thing to him,” Yeshua said.

In another instance, Elovitch instructed Yeshua to remove an article ahead of an election that had a headline with a quote from Netanyahu’s opponent, Tzipi Livni, in which she said the prime minister spent more each month on alcohol than the monthly minimum wage.

“You don’t think we overdid it with Tzipi [Livni]?” Elovitch asked.

“No, we can’t not quote party leaders,” Yeshua answered.

In response, Elovitch told Yeshua that he was interested only in pleasing Netanyahus, that the rest was less important.

Zionist Union party co-leaders Isaac Herzog, right, and Tzipi Livni greet supporters at the party’s election headquarters in Tel Aviv, Israel, Wednesday, March 18, 2015. (Photo credit: AP/Ariel Schalit)

“I don’t need Tzipi’s signature this week. It’s worth distinguishing between the most important thing and what is secondary. The really important things can be harmed by ego, self-righteousness and stupidity,” Elovitch said in a message shown to the court on Wednesday.

The Yes deal in question was considered highly irregular as it effectively involved Elovitch purchasing the majority stake in Yes from himself, with the money coming from the coffers of Bezeq, a public company. (Though Elovitch held the controlling interest of Bezeq, this was done through a series of holding companies; he personally only owned 14% of the company’s stock at the time of the merger.)

Such an unusual deal, which also gave the already massive Bezeq yet further control over the country’s communications market, required special approval from the communications minister, a position that Netanyahu held from 2014 to 2017. That approval was granted on June 23, 2015, a few months after the election that year, which Netanyahu won, with Bezeq purchasing the controlling shares of Yes from Elovitch for upwards of NIS 1 billion ($303 million), a valuation roughly five times higher than it was given by an external auditor.

(The shady Bezeq-Yes merger has prompted a number of other related but distinct criminal investigations, resulting in a number of indictments.)

What’s next?

Yeshua’s testimony, which he’s delivered in a calm, even tone, has not yet implicated the prime minister in a crime — the former Walla CEO had no direct contact with Netanyahu. Instead, Yeshua has described how he was instructed to alter the website’s coverage at the direction of Shaul Elovitch and, to a lesser extent, Iris Elovitch, as well as the prime minister’s associates, notably his former media adviser Nir Hefetz, who turned state’s witness and is due to appear in court later in the trial.

On the second day of the trial, Yeshua also testified in connection with the other charges against his former employers, obstruction of justice, telling the court that the Elovitches had directed him to delete the contents of his phone and destroy the device in 2016 as they feared an investigation against them was imminent.

Retired head of the economic crimes department in the state prosecutor’s office, Avia Alef (Courtesy)

Avia Alef, the former head of the economic crimes department in the Israeli state prosecutor’s office, told The Times of Israel on Thursday that the prosecution will likely not wade deeply into the regulatory favors that Netanyahu allegedly gave the Elovitches — the “quid,” in the quid pro quo — but will instead keep its focus on the “quo,” the news coverage. This is because the exact nature of what was allegedly given does not need to be proven for a bribery conviction.

“The coverage is what was requested. The compensation to Elovitch with the regulatory favors is not part of the legal foundation of bribery, of the ‘give-and-take.’ It is often a good indication that a crime was committed, but it’s not a part of that crime,” she said.

As the testimony and evidence have so far focused on the actions of the Elovitches, going forward the prosecution will have to connect Netanyahu directly to the alleged quid pro quo, according to Alef, who led the corruption probe against the Yisrael Beytenu political party from 2005 to 2012.

“The logical process is to first show what is the infrastructure, what is at the end of the chain, what did [Netanyahu] ask, and then — as far as I understand — they will bring the witnesses who will testify on the connection, on the awareness that Netanyahu had, that the requests came from him,” Alef said.