Netanyahu’s illicit dealings benefited tycoon by $500 million, AG alleges

Netanyahu’s illicit dealings benefited tycoon by $500 million, AG alleges

PM booted a minister, ousted a director general, halted a major internet reform, the state claims, all to satisfy Bezeq chief Elovitch, who was ensuring favorable media coverage

A composite image of Prime Minister Benjamin Netanyahu (R) and Bezeq controlling shareholder Shaul Elovitch. (Flash90; Ohad Zwigenberg/POOL)
AP Photo/Sebastian Scheiner and iStock by Getty Images

Detailing the alleged behavior that led him to recommend bribery, fraud and breach of trust charges against Benjamin Netanyahu in what is known as Case 4000, Israel’s attorney general on Thursday accused the prime minister of intervening in regulatory and other business decisions that benefited an Israeli tycoon to the tune of NIS 1.8 billion — some $500 million.

Attorney General Avichai Mandelblit’s lengthy description of Netanyahu’s alleged illicit dealings with Shaul Elovich — the majority shareholder in Israel’s biggest telecom firm Bezeq, and the owner of the Walla website — took up the majority of the 57-page document released Thursday in which Mandelblit set out the allegations that prompted him to announce a criminal indictment against the prime minister, pending a hearing.

While other officials in the state prosecution hierarchy reportedly recommended that Netanyahu be indicted for bribery in all three of the cases against him, Mandelblit settled for lesser charges in Case 1000 and Case 2000, reserving the graver bribery charge for the Bezeq-Walla Case 4000.

In the document, sent to Netanyahu’s lawyers, Mandeblit spelled out what he said was an illicit quid pro quo relationship between Netanyahu and Elovitch that continued for about four years until early 2017, under which Elovitch ensured favorable coverage of Netanyahu at Walla, Israel’s second largest news site, and critical coverage of Netanyahu’s rivals, especially in the 2013 and 2015 election periods. Netanyahu also himself intervened regarding the material published by Walla, “sometimes even daily,” Mandelblit charged.

Walla’s coverage was subverted on Netanyahu’s instructions, Mandelblit alleges, citing numerous examples including the “censoring” of an interview with Netanyahu which the prime minister did not feel had gone well.

And in return, the prime minister ensured that Elovitch’s business needs were met, to what the document states was Elovitch’s “extremely considerable economic” advantage.

Related story. Slowed-down nation: How Netanyahu’s alleged Bezeq graft stalled Israeli internet

Specifically, the attorney general alleges that in late 2014 Netanyahu moved out a communications minister, Gilad Erdan, whose approach Elovitch found unsatisfactory, and installed himself as communications minister instead. Immediately after the 2015 elections, Netanyahu then allegedly fired the director general of the ministry, Avi Berger, who was advancing a radical reform of Israeli telecommunications industry that would have opened the Israeli internet market, overwhelmingly controlled by Bezeq, to vibrant competition, and that aimed to ensure the efficient and speedy rollout of cutting edge internet infrastructure.

Screen capture of Attorney General Avichai Mandelblit speaking with Channel 12 news, in footage broadcast on January 18, 2019. (Hadashot news)

Elovitch wanted to get rid of Berger, the attorney general alleged, and Netanyahu did his bidding.

In place of Berger, who was fired in a phone call, Netanyahu installed a reliable long-time aide, Shlomo Filber, even though Filber lacked the requisite expertise for the job. The prime minister then summoned Filber to his office, informed him Elovitch was unhappy about the ministry’s policies, and told Filber to ensure the magnate was satisfied from here on, Mandelblit alleges. Filber set about remaking ministry policy to Elovitch’s benefit, opening a “secret channel of communications” to Bezeq, and agreeing with Elovitch on the stalling of the telecom reform. Following Netanyahu’s orders, Filber acted in a “radical departure” from the manner in which a ministry director general ought to behave, writes Mandeblit, and led to the “extreme skewing” of ministry policy regarding Bezeq.

Then-director general of the Communications Ministry Avi Berger, on January 06, 2014. (Miriam Alster/FLASH90)

The relationship between Netanyahu and Elovitch marked a blatant conflict of interest, the attorney general writes, in which Elovitch’s intervened “crudely” on Netanyahu’s behalf at Walla, in the expectation, which bore fruit, of business benefit. Netanyahu indeed used his “power and authority” to advance Elovitch’s interests, to the extent that Elovitch “directly or indirectly” made 1.8 billion shekels as a consequence of Netanyahu’s regulatory and other decisions: NIS 800 million from the sale of the Yad2 internet sales website, and some NIS 1 billion from the merger of Bezeq and the Yes satellite TV company.

It was a give-and-take relationship, Mandelbit alleges, and it was illegal. Hence the bribery charges, against both Netanyahu and Elovitch.

In return for the illicit benefit of skewed media coverage on the Walla site, writes Mandelblit, Netanyahu acted to advance Elovitch’s business interests. “Mr. Netanyahu used his power and authority as a senior public servant to advance issues related to Mr. Elovitch’s business and his and the Bezeq group’s economic interests, including by instructing officials who reported to him to act in a radical departure from the norm,” sums up Mandelblit. “Mr. Netanyahu’s actions were carried out amid a conflict of interests, the weighing of outside interests relating to his own and his family’s interests, and involved the corrupting of the public servants reporting to him.”

Shlomo Filber, director of the Communication Ministry, speaks at the Knesset in Jerusalem on July 24, 2016. (Yonatan Sindel/Flash90)

Addressing Israelis by live TV hours after Mandelblit announced his intention to indict, Netanyahu promised he would refute all the charges against him.

Far from obtaining favorable coverage from Walla, there had been 2.5 favorable articles in an “ocean” of hostile coverage, Netanyahu said.

He accused Filber and two other state’s witnesses in the cases against him of giving “false testimony to save their own skin.”

Prime Minister Benjamin Netanyahu gives a statement to the media, February 28, 2019.(screenshot)

And he lamented that the attorney general, who is “only flesh and blood,” had caved to the “almost inhuman pressure” from the left to advance charges based on “ridiculous and evil” allegations against him.

“I’ll bring dozens of witnesses who, astonishingly, were not questioned,” Netanyahu promised. He would also produce the documents and protocols “to show my actions were beyond reproach.”

The “house of cards will collapse,” he predicted, and added with a smile, in a reference to Case 4000, “I’m 4000% sure.”

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