Attorney General Avichai Mendelblit informed the High Court of Justice on Wednesday as to why he changed his mind and now regards it as illegal for Prime Minister Benjamin Netanyahu’s criminal legal defense to be funded by his cousin Nathan Milikowsky.
Mendelblit wrote that he now believes such funding would be a breach of the law banning gifts to public officials, and that he bases his opinion on new information regarding Milikowsky’s version of events and the business ties between him and the prime minister.
However, according to information obtained by Haaretz, the authorities had this information as far back as 2017, the year before Mendelblit gave his initial permission for the funding. Mendelblit reportedly did not have this information at the time, the reason being that he did not request a comprehensive survey of the ties between Netanyahu and Milikowsky from law enforcement sources.
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The prime minister had sought permission to allow Milikowsky to fund his legal defense in three pending criminal matters on charges of bribery, fraud and breach of trust. Those cases involve allegations that he improperly received lavish gifts and that in two other cases he engaged in illegal contacts to obtain favorable press coverage. He denies any wrongdoing.
He was also questioned in connection with an investigation of Israel's purchase of submarines and other naval vessels from Germany but has not been charged in the case.
Mendelblit wrote in his statement to the High Court that in 2018 he had assumed Milikowsky gave Netanyahu money because of their family ties. It was only when the affair involving Netanyahu’s ownership of stock surfaced that “additional light was shed” on Milikowsky paying Netanyahu’s legal fees.
The state comptroller's permits committee found that from 2007 to 2010, Netanyahu held shares in Seadrift Coke, a company controlled by Milikowsky that makes products for the steel industry.
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“While at the time of the initial examination, the discussion focused on the claimed concrete need to receive money from a relative to fund legal fees in a criminal case, to this was added the realization that the financial relationship between the two had additional layers,” Mendelblit informed the court. When the stock affair became known, Mendelblit wrote, “it indicated that the relationship has an additional component besides family assistance at a time of need.”
However, Haaretz has learned that the information in question was known to law enforcement even before Mendelblit formed his initial opinion in favor of the gift in 2018. For example, Milikowsky testified in 2017 as part of the investigation into the submarine affair, that he was giving gifts to Netanyahu because of his public position, not only because of their family ties. Milikowsky laid out this version over dozens of pages of testimony, and gave similar testimony in the so-called lavish gifts affair, where he told investigators he was giving Netanyahu gifts because Netanyahu represented Israel.
Business ties between Milikowsky and Netanyahu did not start with the stock affair. As far back as 2009, the permit committee in the State Comptroller's Office, which oversees the business affairs of public figures, noted that Netanyahu and Milikowsky had joint holdings in “considerable portions of an industrial corporation dealing with steel.” Netanyahu’s request at the time was that he be allowed to borrow a significant sum from Milikowsky so he could meet tax payments related to those holdings.