Lawmakers to AG: Adelson Ties Preclude Netanyahu From Deciding on Gas Deal

Billionaire Sheldon Adelson had advised Netanyahu to to streamline regulations in Israel’s gas industry.

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Sheldon Adelson, left, with Prime Minister Benjamin Netanyahu. Credit: Tess Scheflan

The head of the Meretz party and a veteran Knesset member on Friday asked Attorney General Yehuda Weinstein to disqualify Prime Minister Benjamin Netanyahu from being part of the decision-making process in the government's emerging compromise agreement with two commercial companies operating the countries’ offshore natural gas fields.

MK Zehava Galon (Meretz) and MK Dov Khenin (Joint Arab List) made the request following revelations by Haaretz earlier Friday that billionaire businessman Sheldon Adelson wrote to Netanyahu last July, calling on the prime minister to streamline regulations in Israel’s gas industry.

Galon said “the close ties between the prime minister and Adelson, and the fact that Adelson openly supports the prime minister, publishing a newspaper which is identified with him, raise concerns that the prime minister has a direct stake in advancing Adelson’s interests and in acceding to his requests.”

Adelson’s letter – written on behalf of the U.S. Chamber of Commerce and U.S.-Israel Business Initiative, which he chairs – mentioned many topics, but the gas industry is the only one specifically mentioned, Galon states.

"Adelson proposed 'treamlining the regulation,' an expression that often means relaxing it," She adds, noting that the billionaire also suggested launching a campaign to inform the Israeli public of the "benefits" of the gas industry.

MK Dov Khenin (Joint Arab List) also appealed to Weinstein, asking him to instruct the prime minister to desist from handling the subject due to a potential conflict of interest. “Adelson appealed to Netanyahu as the head of a group [U.S.-Israel Business Initiative] that includes Noble Energy, the company that obtained most of the control over the gas fields along Israel’s coastline. Adelson’s close ties with Netanyahu are well known,” wrote Khenin.

“In view of these circumstances, there is a conflict of interests that precludes the prime minister from continuing to lead attempts to settle the gas issue. I ask you to instruct the prime minister to immediately desist from dealing with this area.”

The Prime Minister's Office said in response that Netanyahu never discussed policies related to natural gas with Sheldon Adelson, either directly or indirectly.

"The only consideration guiding him in this matter is the wellbeing of the people of Israel," the PMO said.

As Haaretz reporter Uri Blau revealed on Friday, in a three-page letter written to Netanyahu on July 17 last year, Adelson laid out the details of an initiative to strengthen ties with Israel. Among the points he raised was a suggestion to update the Free Trade Agreement between the United States and Israel, to open a Chamber of Commerce office in Jerusalem, encourage visits by U.S. congressmen to Israel, and to strengthen ties in research and development. He also proposed streamlining the regulation of natural gas and to launch a campaign that would underscore the advantages of this industry.

The regulation of natural gas is critical for Noble Energy. Together with the Delek Group, the U.S. firm is the controlling shareholder in the Tamar and Leviathan gas fields. Both companies are currently holding negotiations with the state over the terms of regulation applying to these and other, smaller gas fields (Karish, Tanin) in which they are partners.

On August 14, about a month after Adelson’s letter, the then-director general of the Prime Minister’s office, Harel Locker, wrote back. “Dear Mr. Adelson,” he wrote, “Prime Minister Benjamin Netanyahu has forwarded me your letter and has asked that I spearhead the effort to advance our common goals. Please be assured that the Prime Minister appreciates and shares your desire to continue to further strengthen the already robust economic ties between our countries.

“We look forward to working with the Chamber of Commerce to advance the initiatives detailed in your letter. We have already begun laying the groundwork for a strategic economic dialogue our governments, which I expect to begin in the near future. This dialogue will help to promote economic partnerships and cooperation between our two countries in both the public and the private sectors,” wrote Locker.

The Prime Minister’s Office denied the assertion that Netanyahu was involved in promoting Adelson’s affairs in any way.

“Contrary to your assertion, the U.S.-Israel Business Initiative operates under the U.S. Chamber of Commerce to advance investments and mutual trade ties between Israel and the United States. It has recently hosted a number of events intended to encourage investments in Israel, including events in the cyber field,” the PMO’s statement said.

“Contrary to your assertion, the discussion dealt with several issues and plans that were launched a long time before that letter was received. This includes a work plan based on a memo of understandings signed between Prime Minister Netanyahu and the Governor of California in March 2014. The gas issue was not raised in that discussion.”

An adviser to Sheldon Adelson responded on Adelson’s behalf, saying, “The U.S. Chamber of Commerce, like all other Chambers of Commerce throughout the world, generally advocates for business relationships between countries or states, but does not advocate for any one company within an industry so as to avoid favoritism and conflicts. I lent the association my name as honorary chairman and I don’t get involved whatsoever with any specific company – not even my own. I am only interested in enhancing and advocating for a robust, commercial relationship between the United States and Israel. I am not aware of the companies that are part of the U.S.-Israel Business Initiative, including those several [the writer] lists here. I have no recollection of the specifics of the letter that he refers to.

“I never discussed that letter or any other message regarding any other company with the prime minister. I have never spoken to any person from Noble Energy.”