Investigation of Gantz’s former company further muddies election’s swampy waters

Announcement of a probe into a firm once headed by Netanyahu’s chief rival is a major irritant for Blue and White, and raises new questions about state prosecution’s independence

Raoul Wootliff

Raoul Wootliff is a former Times of Israel political correspondent and Daily Briefing podcast producer.

Blue and White party leader Benny Gantz at his party headquarters, in Tel Aviv, September 12, 2019. (AP Photo/Oded Balilty)
Blue and White party leader Benny Gantz at his party headquarters, in Tel Aviv, September 12, 2019. (AP Photo/Oded Balilty)

Following a 38-year career in the army, former chief of staff Benny Gantz in 2015 became the chairman of a Tel Aviv-based cybersecurity company called Fifth Dimension, which developed artificial intelligence solutions for law enforcement agencies. In December 2018, after just three years, the company went bankrupt, having burned through millions of dollars from investors.

“I can’t consider the Fifth Dimension to be a success story,” Gantz admitted in an interview last year, in the face of harsh criticism from Benjamin Netanyahu. The prime minister sniped that the Blue and White chairman, his chief political rival, could not be trusted to manage the State of Israel, having failed in his very first business venture.

“It was only one of eight or nine business activities I had. I’m not some tycoon and I don’t consider myself a businessman,” Gantz said in the interview, to the Ynet news site. “I propose we remember that this happens to nine out of 10 high-tech companies. So let’s look at this with the proper perspective.”

On Thursday, the question of the appropriate perspective with which to look at Gantz’s failed company became one of the most pressing of the current election campaign — the third in a year — when Acting State Attorney Dan Eldad ordered a criminal probe into Fifth Dimension over allegations of impropriety in its efforts to secure a lucrative contract with the Israel Police.

Netanyahu, who is due to appear in court as a criminal defendant over charges of bribery, fraud, and breach of trust just two weeks after the national vote, said in response to the announcement, “The public must know the truth, here and now, and before the elections.”

Announced just 11 days before the election, the investigation further muddies the already swampy political waters, with the timing blurring a clear view of the company, the allegations against it, and the “truth” that Netanyahu is demanding.

The mud

The suspicions against Fifth Dimension focus, first, on a NIS 4 million ($1.1 million) grant given to the firm by the police for a pilot project using the firm’s ostensible tech capabilities, after company executives allegedly provided law enforcement officials with misleading information. The preliminary grant was intended to become part of a NIS 50 million ($14.6 million) contract. That contract was not finalized.

According to a State Comptroller’s report released shortly before the April 2019 election, the Israel Police negotiated the NIS 4 million grant with the cybersecurity company without issuing a tender, in violation of acquisition regulations.

Fifth Dimension, the report found, told the Israel Police’s acquisition committee in 2016 that it was founded four years earlier, instead of three; said it had an already-developed product, when it did not; and said that it had five clients — all security organizations — when it did not have any at the time.

The report, which focused on alleged police impropriety rather than suspicions against the company itself, faulted the force for approving the Fifth Dimension pilot project without a tender, and for later entering into negotiations with the firm for the NIS 50 million contract without taking offers from any other companies.

“Police should have reached out to other technology companies, whether start-ups or veteran firms, and informed them of its intention” to sign a contract for technology services worth NIS 50 million, then-comptroller Yosef Shapira wrote.

The report also faulted police for including Gantz and the CEO of Fifth Dimension, Doron Cohen, in a meeting early in their deliberations, as well as for giving the firm access to extensive information on its operations as part of the pilot project.

It said then-police commissioner Roni Alsheich was the driving force behind the project and that he ordered negotiations be held with Fifth Dimension, whose executives also included several former Israel Police brass.

After the pilot was determined to have been successfully completed in September 2017, police earmarked NIS 50 million for the project in its 2017-2018 budget. But the negotiations fell through when Finance Ministry officials said police would need to conduct a “thorough market review” in order for it to recommend that the contract be exempted from a public tender process.

Soon after, Fifth Dimension declared bankruptcy when its largest investor Viktor Vekselberg, a Russian businessman with ties to Russian President Vladimir Putin, was sanctioned by the United States for his connection to “malign activity” by the Russian government around the globe.

The swamp

While Gantz has not been named as a suspect in the affair, Thursday’s announcement of the probe — coming so close to the election and during a campaign by Blue and White that has tried to focus attention on Netanyahu’s indictment for corruption charges — has raised a number of questions about the acting state prosecutor’s timing and potential political motivation. Gantz himself, while insisting he has nothing to hide and will fully cooperate with the investigation, has claimed that a “political aroma” hangs over the affair.

Law enforcement and state prosecution officials have directed severe criticism at Eldad for his speedy decision to order the criminal probe — he was only named to the post this month — with several officials, speaking anonymously, accusing the interim head of Israel’s state prosecution of being a lackey of the ruling Likud party.

One senior state prosecution official told the Haaretz daily that Eldad was behaving as “the justice minister’s lackey” and a “consigliere” — an adviser to a mafia boss.

Another said: “We’ve become Turkey. Eldad is turning the prosecution political.”

At the same time, Blue and White officials have accused Eldad and Justice Minister Amir Ohana — an ally of Netanyahu’s and the force behind the appointment of Eldad (a move that angered other top justice officials and was initially opposed by Attorney General Avichai Mandelblit) — of leaking reports of the investigation before it became public. Ohana has said the probe should have been opened months ago.

Mandelblit’s office on Thursday said that it had given the green light to Eldad to open the investigation, but that the attorney general himself was not involved in the case or the decision, implying a possible rift within Israel’s legal echelon.

By staying out of the investigation, Mandelblit, who oversaw the probes that led to Netanyahu’s prosecution, is widely reported to be signaling that he does not regard the case as highly significant and does not see Gantz as a likely suspect.

Appointed to the position of attorney general by Netanyahu, it was Mandelblit who announced draft charges against the premier shortly before the April 2019 elections, and a full indictment shortly after September’s round two.

The case, and the timing of the prosecution, made him a target of anger for many Netanyahu supporters.

Announcing the first ever decision to charge a sitting prime minister in November, Mandelblit said it was a “hard and sad day” for Israel to indict its leader. “The citizens of Israel, all of us, and myself, look up to the elected officials, and first and foremost to the prime minister,” Mandelblit said. “Law enforcement is not a choice. It is not a matter of right or left. It’s not a matter of politics.”

Netanyahu — who claims the indictment against him is politically motivated, and blames the opposition, media, police and prosecutors of pressuring a “weak” attorney general, Mandelblit — denies any wrongdoing.

It is not clear if the probe into Fifth Dimension will move the needle in any way in the latest closely fought election. The months leading up to March 2’s polling day have been marked by other bombshells, including the unveiling of US President Donald Trump’s Mideast peace plan and the setting of a date for the beginning of Netanyahu’s corruption trial, which have not dramatically affected opinion polls. As things stand, surveys predict neither Netanyahu nor Gantz will have a clear path to a majority after next week’s vote either.

But it is certainly an embarrassment and a major political irritant for Gantz, who has made ousting Netanyahu his main message and has sought to present a squeaky clean image in the face of the long-serving premier’s graft charges. The attractions of lucrative chairmanships are clear, but evidently such roles can come with a political cost.

Given the controversy around both the allegations and the timing of the investigation, the affair also risks further undermining the image of Israel’s already battered legal authorities. Until this month, they were accused of anti-Netanyahu bias; now, it is Gantz who is claiming that they are politicized.

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