New Revelations

Hollywood Producer Arnon Milchan, the Cigars and Frequent Funding of Netanyahu's Lifestyle

Milchan, who also has shares in Israeli Channel 10, is allegedly one of the main figures in graft case under investigation. According to source close to one of businesspeople involved, liquors and cigars were delivered to Netanyahu's home.

Prime Minister Benjamin Netanyahu and business magnate Arnon Milchan in 2005.
Prime Minister Benjamin Netanyahu and business magnate Arnon Milchan: Why are only 'leftist' journalists investigating this affair? David Silverman/Getty Image

The purchase of alcoholic beverages, cigar boxes worth thousands of shekels, a regular and frequent practice funding the prime minister’s lifestyle – and the involvement of a key figure, in the person of businessman and movie producer Arnon Milchan.

These are new details that have been obtained by Haaretz about the police investigation of Prime Minister Benjamin Netanyahu over perks that he is alleged to have received in the secondary of the two cases that the police are pursuing against him.

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PM Benjamin Netanyahu, wife Sara, and son Yair with actress Kate Hudson and producer Arnon Milchan in 2014.
Avi Ohayon/GPO

Haaretz has learned that Milchan, who is one of Hollywood’s most prominent producers and a man who owns a 9.8-percent stake in Israeli Channel 10 television, is allegedly one of the main individuals who purportedly bestowed the prime minister with gifts and other perks. Milchan has produced a large number of films, from “Dizengoff 99” in the late 1970s to “Pretty Woman” in 1990.

Over the years, he has remained in touch with the Israeli establishment and has provided assistance with military transactions. Milchan's name has been linked to weapons trading and security deals. According to media reports, he once served as an agent in the scientific liaison bureau of the Defense Ministry and assisted with the purchase of equipment for Israel's nuclear program.

Milchan is also a partner and acquaintance of Australian billionaire James Packer, whose name has also been linked to the case involving the perks. Milchan has given his testimony to police, and his office refused to provide a response for this article.

Netanyahu and Herzog visit Milchan's house

Netanyahu was questioned by police for a second time this week over the suspicions of graft on Thursday evening.

Milchan with Yair Lapid and Einat Saruf, 2004
Moti Kimche

Milchan also has a good relationship with a number of top Israeli politicians, including the leader of the Yesh Atid party, Yair Lapid. Lapid was once a director at a company owned by Milchan. 

A year-and-a-half ago, Haaretz reported that in the course of a few weeks, Netanyahu had visited Milchan’s home in Herzliya four times and that on one of the visits, Isaac Herzog, the Knesset opposition leader and head of the Labor Party, was also present.

Sources in Herzog’s office said at the time that it was an event attended by a large number of people, but footage from the security camera at the home did not show the arrival of additional guests.

 In the investigation of Netanyahu, the names of several major business figures came up who are suspected of providing the prime minister with valuable gifts. It is suspected that on more than one occasion, the prime minister’s lifestyle was funded at his own explicit request or at the request of his wife, Sara.

 A close associate of one of these business figures recounted a regular practice in which the businessman was frequently asked to buy valuable items for Netanyahu, notably cigar boxes worth thousands of shekels each, as well as alcoholic beverages.

The perks were not allegedly necessary provided at social gatherings at which the business people were in the company of the prime minister and his wife. They were said to have been delivered in some instances by messenger on behalf of the business people. Last week, Haaretz disclosed that the police suspect that perks worth hundreds of thousands of shekels were provided in this manner.

Additional interrogation of prime minister

Netanyahu is expected to be interrogated a second time on Thursday evening or Friday. He was questioned for the first time on Monday by investigators from the national fraud unit.

At the beginning of Monday’s session, which was conducted at the Prime Minister’s Residence in Jerusalem and lasted about three hours, the investigators informed Netanyahu that he was being questioned under caution, on suspicion that he had received perks from major business figures.

The case involving the alleged perks will come up in the scheduled interrogation session as well. An additional matter that is being worked on by the team of investigators under the command of fraud unit head Brig. Gen. Koresh Barnur has not yet been presented to the prime minister and was not mentioned in a statement released this week by Attorney General Avichai Mendelblit.

Another individual who is a public figure is allegedly involved in the main case, and sources who have had access to its details say it has the potential to be earthshattering.

In a statement released after the first interrogation of Netanyahu, Mendelblit said the police had collected testimony from dozens of those involved in the case, in Israel and abroad, and has taken possession of relevant documents.

The attorney general noted that an evidentiary foundation had been developed, justifying a shift from a less formal inquiry to a criminal investigation.  The developments relate in part to testimony received from major business figures allegedly involved in the case and which strengthened suspicions against the prime minister.

 “The claims that ultimately led to a decision to conduct an interrogation under caution arose in the context of the [informal] inquiry only about three months ago, as preliminary suspicions, and since then, concerted work has carried out by the Israel Police to ascertain their nature and to support them with evidence,” Mendelblit said in his statement.