State watchdog: PM didn’t disclose conflict of interest with Bezeq owner
Yosef Shapira finds that Communications Ministry, when led by PM, acted in interests of his personal friend, telecom owner Shaul Elovitch
A damning report by Israel’s state watchdog found that Prime Minister Benjamin Netanyahu acted improperly when he was holding the portfolio of communications minister regarding involvement in the Bezeq telecom giant, headed by his close friend Shaul Elovitz.
Netanyahu dismissed the report as a “futile” attempt to manufacture a scandal.
State Comptroller Yosef Shapira said that Netanyahu did not originally report his personal connection to Elovitz in a conflict of interest declaration, casting a shadow over the way the Communicatons Ministry treated Bezeq, Israel’s largest telecommunications firm.
“The promotion of Bezeq’s interests, without a professional examination of the implications, was likely to cause real damage to competition and the public interest,” the report read.
Shapira wrote that there was a lack of transparency over decisions made by Netanyahu regarding Bezeq before he was barred from involvement with the company and handed over decision-making to the director general of the Communications Ministry, Shlomo Filber.
The watchdog also said that Filber may have acted in ways that benefited Bezeq, citing several cases.
Shapira questioned whether it was possible for Filber to make unbiased decisions against Elovitch in light of the prime minister’s close connection with the Bezeq head.
The report found that Filber acted in ways that benefited Bezeq numerous times.
Filber was interrogated by the Israel Securities Authority on Wednesday on suspicion of ethics violations and securities fraud.
The ombudsman also found that the Justice Ministry was not, but should have been, involved in examining the implications of telecommunications decisions that benefited Elovitch and Bezeq.
After the media uncovered a possible conflict of interest between Netanyahu and Elovitch in October 2015, the prime minister was instructed by the Attorney General Avichai Mandelblit not to involve himself in any decisions about Bezeq in light of his close friendship with Elovitz.
In June 2016, Mandelblit told Netanyahu that “given the background of the friendship between the prime minister and Mr. Elovitch, will the prime minister refrain from dealing with matters relating to companies controlled by Mr. Elovitch, in order to avoid allegations of conflict of interest?”
In a statement, Netanyahu’s office called the comptroller report “another futile attempt to create a scandal against the prime minister out of thin air,” according to Channel 10.
Netanyahu and Elovitch “are on friendly terms but nothing more,” and “all the decisions he made regarding the communications market were for the benefit of the public alone,” the statement read.
The report in the latest legal imbroglio to entangle Netanyahu, who is currently under investigation in two cases in which he he is suspected of taking gifts from wealthy businessmen and entering into a quid pro quo with a publisher, respectively.
Other State Comptroller reports have also found issues with Netanyahu’s use of public money.
Bezeq, the nation’s largest fixed-line provider, dominates the local communications market and has in recent months been pushing for regulatory permission to merge its mobile, fixed-line, satellite TV and internet subsidiaries, which currently operate as separate business entities as required by the regulator.
But the company has been embroiled in its own legal saga in recent weeks over suspicions of fraud, breach of trust, corporate officers’ offenses, and obstruction of legal proceedings from the Israel Securities Authority.
In June the Tel Aviv Magistrate’s Court issued travel bans of six months to Elovitch, director of the YES television cable company Ron Ayalon, and the YES financial director Michal Neeman.
The restrictions were requested by the Israel Securities Authority as it continued an investigation focused on a major acquisition by Bezeq, the nation’s largest telecommunications operator, of shares in the YES satellite television company.
Elovitch was banished from the offices of his Eurocom Group and Bezeq and prohibited from contacting members of the directorate or other controlling figures in the companies until June 23. He was ordered to deposit a NIS 5 million ($1.4 million) bail bond.
