Just before the 2016 election in Israel, Communications Ministry Director General Shlomo Filber was pushing to revoke the structural separation within the telecom giant Bezeq, which would have been extremely beneficial its controlling shareholder, Shaul Elovitch. But then Israeli-American billionaire Haim Saban, a major contributor to the Hillary Clinton campaign who had just then bought Bezeq’s competitor Partner, called Minister Tzachi Hanegbi, then in charge of communications, and Filber halted the move until after the 2016 U.S. presidential election.
Last November Netanyahu was charged with fraud, breach of trust and taking bribes in the case revolving around an alleged quid-pro-quo deal between him and Elovich to give the Netanyahu family good coverage on Bezeq’s popular news website Walla in exchange for regulation benefitting Bezeq. Details of the connection between the graft case, known as Case 4000, and the U.S. election were revealed in Hanegbi’s testimony to the Israel Securities Authority during the investigation.
“If you want a short break, just say so,” the Israel Securities Authority investigator told the witness after several hours of grilling. “If you want to, fine. I have no problem,” replied Hanegbi coolly. “I’m a graduate of 28 nine-hour grill sessions.”
In 2016 Netanyahu asked Hanegbi to be the minister in charge of regulation for Bezeq and other matters pertaining to Elovitch. This followed the attorney general’s instructions to Netanyahu not to deal with these matters as communications minister due to his close ties to the telecom giant’s owners Iris and Shaul Elovitch, as Haaretz reported.
“Other ministers refused to do it,” Hanegbi said in his testimony. “Three ministers I think. I was the fourth who agreed to take this matter on.”
Hanegbi revealed a surprising link between key events in the Bezeq-Walla graft case and the U.S. 2016 presidential election. He also added a new figure to the plot: Saban, whose name hadn’t been mentioned in connection to the case before. The billionaire was very close with senior Israeli administration officials as well as the Clintons, and contributed millions of dollars to Hillary Clinton’s campaign. He sold Elovitch the controlling share in Bezeq in 2009. Four years later he became Bezeq’s competitor when he bought the controlling share in Partner Communications Company.
When Hanegbi took charge of Bezeq’s affairs (“it was one-eighth of a position,” he testified), the dominant figure in the Communications Ministry was Netanyahu’s right-hand man, Filber, the ministry’s director general. Later Filber would testify that he advanced Elovitch’s interests at Netanyahu’s orders, including a revocation of the company’s structural separation, a move that would yield the monopoly huge profits.
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“In fact, there wasn’t a single executive who supported this move in Bezeq,” Hanegbi told the investigators. He himself was fond of Filber. When he learned about the hidden ties between Filber and Bezeq heads, he responded with one word: “nightmare.”
When Hanegbi took office, Filber briefed him of his plan to end the structural separation. If the ministry cooperates with Bezeq, he said, the company would be more willing to invest in infrastructure that would serve its competitors. Hanegbi did not object, but then he received a phone call and an invitation to meet Saban, who had arrived in Israel.
“I know him from the Saban Forum,” Hanegbi said, referring to the annual gathering the billionaire organizes in the United States. “I was there a few times, never at his expense, because the state won’t let him, but he’s the inviter. If he doesn’t want you, you don’t come. I more or less do him a favor by coming.”
At the September 2016 meeting, Saban expressed to Hanegbi his discontent with Filber’s policy. He spoke passionately, the minister testified: “He laid out how grimly he saw the whole story, with giving the monopoly more benefits and strengthening it. He spoke about ending the structural separation, he said, ‘I spoke to the prime minister and I have ways of explaining to him that it’s a bad mistake, I’m going to fight in the media and go to the High Court of Justice, we won’t allow it and we’ll demand dismantling Bezeq.’”
Hanegbi testified that he didn’t feel obligated to Saban, but when he left the meeting, he called Filber. “I told him, ‘Listen, what I suggest is, suspend this story until after the U.S. election.’”
He also explained to Filber how the Partner-Bezeq face-off is tied to the contest between Clinton, who at the time was seen as the leading presidential candidate, and Donald Trump. “Saban was very connected to Hillary Clinton, and she was the likely candidate. I said, this guy may be the most important person in Israel’s ties to the elected president… We have a friend of Israel here, he’s the presidential candidate’s number one supporter. Let’s see what happens on November 8. I don’t think we should do anything before we know what happens in the White House.”
Filber gritted his teeth and stopped the move. Then Trump shocked the world by winning the presidency, to the glee of the Elovitches, Saban’s competitors. “Good morning Iris. Good night Haim Saban,” Walla CEO Ilan Yeshua wrote in the Whatsapp group he shared with Iris and Shaul Elovitch as the election results were emerging.
“Nice,” Shaul Elovitch responded. His wife remained reserved: “Let’s wait to the end of the count.”
When the triumph was a certainty, Yeshua and Iris Elovitch spoke on the phone. “It’s incredible that he won,” Yeshua said.
“Saban was walking around the Communications Ministry like a peacock,” Elovitch replied, adding, “let’s start betting on the right horse.”
Months earlier, Elovitch said in correspondence with Yeshua that if Clinton won, “Saban will be king of Israel.” Shaul Elovitch also felt his competitor was using his ties in the corridors of power to act against Bezeq, as reflected in this anecdote: At the end of 2015, Walla carried a report by diplomatic correspondent Amir Tibon that wasn’t flattering to Netanyahu. “I hope there’s a speedy deterioration,” Elovitch wrote to Yeshua, calling Tibon “an incorrigible man.”
Later he added: “I hope he [Netanyahu] continues to back who I’m supposed to meet tomorrow [probably Filber]. Saban is exerting heavy pressure on him.”
After the election Filber vigorously renewed his efforts to end the structural separation. The indictment against Netanyahu and Elovitch says he did it “to benefit the defendant Elovitch and following the covert instruction of the defendant Netanyahu, while cooperating with Bezeq, against the ministry’s senior legal and professional experts’ position and without consulting them.”
The efforts peaked on December 22, when the Communications Ministry sent Bezeq a letter headed: “Revoking the structural separation obligation in the Bezeq group.” The indictment says, “in this letter Filber included misleading details and omitted essential details regarding the obligation of holding a hearing before making a decision, which the legal advisors believed was vital to include in the letter.”
The document raised a storm. The Finance Ministry responded with a harsh letter, warning that the move could seriously damage competition in the media market. The Justice Ministry suspected Filber’s timing – before the end of the tax year – wasn’t accidental but intended to serve Bezeq.
A few weeks later, the Finance Ministry’s director general held a discussion about revoking the separation with senior Justice Ministry officials. Justice Ministry official Elidor Blittner met Filber at the entrance to the building. “We were the only ones who came on time,” she testified to the Securities Authority. “He told me he wanted to talk to me… and then he told me, ‘I think you’re experienced enough to hear mob stories about the government or the public sector.’ I don’t remember the exact terms. I was stunned.”
Her testimony continued: “And then he said, ‘Look… I was instructed by the ministers or Tzachi Hanegbi,’ I don’t remember exactly who but Hanegbi’s name came up. He said, ‘I wanted to issue [the letter] in October, but got messages that Haim Saban would prevent Bibi [Benjamin Netanyahu] from seeing Hillary Clinton if this letter is sent to Bezeq.’ I didn’t understand what the connection to Saban was, and he said, ‘Saban is Partner’s owner.’ I told him to write it down, but he said he clearly couldn’t do that because there could be something criminal here, there may be extortion and threats here.”
Filber testified that he was afraid that Clinton wouldn’t meet Netanyahu, but it wasn’t because of Hanegbi but rather “rumors” in the communications market from Partner’s direction. However, he confirmed Hanegbi’s theory about their conversation. “Tzachi told me, ‘Let’s wait until after the election in the United States, it’s very sensitive.’ My understanding was that the prime minister is very stressed about the election, and doesn’t know what would happen the day after Hillary wins. He’d have to build a relationship with a new administration and we shouldn’t be the ones making difficulties for him now. Since it was known Saban was very close to Hillary, and in Israel too, he’d meet the prime minister as the contact man, so I understood the meaning as we don’t want to anger Haim Saban.”
Saban and his associates were indeed furious with Filber. “[Partner Chairman] Adam Chesnoff told me, ‘Momo [Filber’s nickname] works for Bezeq, he’s corrupt, we’ll prove he gets money from them,’” Hanegbi recalled. “I thought this was exaggerated. I forced him to apologize once because he said it to Momo’s face at one of the meetings.”
Filber described his first meeting with Saban in February 2016: “Partner relaunched their brand, they invited me… so I tell him jokingly, ‘I’m the man causing you trouble,’ and when he understands who I am, he makes a movement like he’s going to punch me. We smiled.”
At that meeting Saban asked to meet Netanyahu at his residence. Filber waited outside (“Judging by how cold it was on the patio, it was in winter”) and when the personal talk between the billionaire and Netanyahu ended, he was called into the room. He described the meeting of the three as businesslike.
Hanegbi was later appointed as acting communications minister. He was soon replaced by Ayoub Kara, who was subsequently replaced by David Amsalem. Filber was questioned by the police about his ties with Bezeq and turned state’s evidence. Saban sold his holdings in Partner in September. Netanyahu and Elovitch are expected to go on trial for bribery and fraud in the Bezeq-Walla corruption case.