Top officials, executives revealed as arrested suspects in Bezeq graft probe
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Gag order on Case 4000 lifted

Top officials, executives revealed as arrested suspects in Bezeq graft probe

Among those held are tycoon Shaul Elovitch, his wife and son; former Netanyahu spokesperson Nir Hefetz, Communications Ministry head Shlomo Filber and Bezeq CEO Stella Handler

Prime Minister Benjamin Netanyahu and Nir Hefetz (L) as Head of the National Information Directorate arrive at the weekly cabinet meeting held in the Prime Minister's Office in Jerusalem. Sunday, Dec 27, 2009. (Yossi Zamir/Flash 90)
Prime Minister Benjamin Netanyahu and Nir Hefetz (L) as Head of the National Information Directorate arrive at the weekly cabinet meeting held in the Prime Minister's Office in Jerusalem. Sunday, Dec 27, 2009. (Yossi Zamir/Flash 90)

Police on Tuesday lifted a gag order on the Bezeq fraud case, the latest corruption probe involving Prime Minister Benjamin Netanyahu, revealing the names of seven people who were arrested earlier this week.

Among those arrested and ordered held for five days were Shaul Elovitch, the owner of the Walla news website and the controlling shareholder of Israel’s largest telecom company Bezeq, his wife Iris, and his son Or.

Shaul Elovitch, Bezeq’s controlling shareholder (Calcalist screenshot)

Also held were the director general of the Communications Ministry Shlomo Filber, former Netanyahu family spokesman Nir Hefetz, Bezeq CEO Stella Handler and senior Bezeq executive Amikam Shorer.

Netanayhu and his wife Sara are also expected to be questioned in the probe. Known as Case 4000, it revolves around a suspected quid pro quo deal between Elovitch and Netanyahu that would have seen the prime minister granted positive media coverage in exchange for financial benefits for Bezeq.

Earlier on Monday Elovitch “categorically” denied allegations leveled against him, saying that “no offense has been committed.”

“Shaul Elovitch categorically denies the suspicions against him,” a statement said. “We urge patience and not to rush to conclusions.”

“We are confident that when things become clear, it will be possible to see that no offense has been committed,” it said.

Stella Handler, chairwoman of cable company HOT (photo credit: Moshe Shai/Flash90)
Stella Handler ( Moshe Shai/Flash90)

According to law enforcement sources, Elovitch swayed the Walla news site’s coverage of Netanyahu and his family in exchange for the Communications Ministry enacting policies potentially worth hundreds of millions of shekels for Elovitch.

Netanyahu, who has also been said by Israeli media to be a suspect in the case, is suspected of furthering that deal. Netanyahu also denies any wrongdoing.

Netanyahu was acting communications minister at the time of several alleged illicit deals made with Elovitch, one of which included helping Bezeq buy the satellite cable provider Yes, overriding any antitrust issues raised by ministry officials.

On Sunday, after the case was transferred from the Israel Securities Authority to the Israel Police, reports were allowed to state only that two “very close” associates of Netanyahu were arrested, along with three senior officials in the Bezeq phone company, and two relatives of one of the officials.

Investigators have uncovered strong evidence that Elovitch directed Walla to drastically change its coverage of both Netanyahu and his wife Sara, and believe that it is “only a matter of time” before one of the current suspects agrees to testify that Netanyahu was behind the decision, Hadashot news reported on Sunday.

That report also said investigators had transcripts of messages between Sara Netanyahu and Elovitch’s wife Iris.

On Sunday, Netanyahu decried the investigation as “baseless” and part of a “media witch hunt.”

“Another baseless investigation under pressure from the media,” a statement from Netanyahu said. “The media witch hunt continues in full force.

Former Prime Minister’s spokesman Nir Hefetz at the Herzliya Magistrate’s Court for a libel suit against him and other associates of the Prime Minister
on December 26, 2017. ( Flash90)

Channel 10 news on Sunday aired recordings of Hefetz, a longtime confidant of the prime minister and his former spokesperson, saying, “I can ask anything of Elovitch: Pelephone, Yes, Bezeq, Bezeq Benleumi.”

In another section of the tape, which the report said police believe provides a direct link between Netanyahu and the positive coverage he received from Walla, Hefetz can be heard saying that he had met with “senior global media figures” who had given him a “green light” to go ahead with Bezeq’s purchase of Yes.

Last year, it was announced that Filber, the director-general of the Communications Ministry, is suspected of illicitly allowing Bezeq to buy shares of Yes. Filber was appointed by Netanyahu in 2015, after the prime minister installed himself as communications minister.

Bezeq is a diversified telecoms operator active in a variety of sectors in the Israeli market: Bezeq Fixed-Line provides internet and telephony services; Bezeq International provides international call services; Pelephone provides cellular services; Yes provides pay TV services; Walla runs an internet news portal service, and there is also an online call center. All of these units are fully owned by Bezeq, but because the firm was historically a monopoly, and because it is still a dominant player in the market, regulatory curbs compel these units to operate as separate businesses, leading to higher costs for Bezeq.

Shlomo Filber, director general of the Communications Ministry, during a court hearing in the Supreme Court regarding the closing of the Israel Broadcasting Authorities. May 15, 2017. (Miriam Alster/Flash90)

Elovitch owns a stake in Bezeq via a pyramidal company structure: His firm Eurocom Communications Ltd. controls Internet Gold-Golden Lines Ltd. which in turns controls B Communications Ltd. B Communications holds a 26 percent stake in Bezeq, and the rest of Bezeq, 74%, is held by the public via shares traded on the Tel Aviv Stock Exchange.

The Elovitch sale of Eurocom’s stake in Yes to Bezeq started off at the center of an Israeli Securities Authority probe that then broadened to include Yes dealings with Spacecom and the dealings of Bezeq officials and Elovitch with Filber.

Last week, police recommended that Netanyahu be indicted for fraud, breach of trust and bribery in two other cases.

In Case 1000, Netanyahu and his wife are alleged to have received illicit gifts from billionaire benefactors, most notably the Israeli-born Hollywood producer Arnon Milchan, totaling NIS 1 million ($282,000). In return, Netanyahu is alleged by police to have intervened on Milchan’s behalf in matters relating to legislation, business dealings, and visa arrangements.

Case 2000 involves a suspected illicit quid-pro-quo deal between Netanyahu and Yedioth Ahronoth publisher Arnon Mozes that would have seen the prime minister weaken a rival daily, the Sheldon Adelson-backed Israel Hayom, in return for more favorable coverage from Yedioth.

The prime minister has also been linked indirectly to Case 3000, a large investigation into suspected corruption surrounding the multi-billion shekel purchase of naval vessels and submarines from a German shipbuilder. While Netanyahu has not been named as a suspect, close associates of his, including two personal aides, have been arrested or questioned.

Netanyahu has denied any wrongdoing in all the cases.

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