Analysis

Charges Against Netanyahu Reveal: Tycoon Ended a Cabinet Minister's Term

Gilad Erdan wanted to remain communications minister to enact reforms that would have broken telecom giant Bezeq's monopoly, but Netanyahu refused

Public Security Minister Gilad Erdan with Benjamin Netanyahu in the Knesset, November 21, 2018.
Olivier Fitoussi

Benjamin Netanyahu claimed Thursday that the bribery accusations against him in the Bezeq case will fall “like a house of cards.”

According to the prime minister, the accusation that he provided regulatory concessions to the telecommunication giant’s controlling shareholder in exchange for favorable media coverage relies on the testimony of prosecution witnesses Nir Hefetz and Shlomo Filber, who “invented lies” to avoid indictment. One wonders what Netanyahu thinks of the statements given by Public Security Minister Gilad Erdan, who according to the draft indictment seems to be a key witness in the case.

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The draft indictment states that at the height of the period in which Netanyahu and his wife Sara allegedly influenced hundreds of reports on the Bezeq-owned Walla news site, Netanyahu asked Erdan, the communications minister at the time, to pay special attention to Bezeq’s complaints about the reform being carried out in the country’s telecommunications market. Shaul Elovitch was Bezeq’s controlling shareholder at the time.

"The Communications Ministry advanced the reform over despite Bezeq’s objections,” Attorney General Avichai Mendelblit wrote in the draft indictment. Erdan and ministry professionals pushed for the reform. It would have broken Bezeq’s monopoly on landlines and internet infrastructure, creating competition and pushing down prices for consumers.

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Mendelblit would not have included Netanyahu’s directive on Elovitch had it not clearly emerged from Erdan’s statements.

The draft indictment describes another instance where Netanyahu turned to Erdan. In May 2014, Bezeq agreed to sell the ad site Yad2 to German publisher Axel Springer for $220 million. Both Erdan and Netanyahu had to sign off on the deal.

“On May 14, after you and your wife had for a year and a half conveyed numerous demands for coverage to the Elovitch couple, you signed the permit to move control of Walla’s subsidiary that operated the site Yad2" Mendelblit wrote. "Elovitch was in contact with you and officials around you to ensure that Minister Erdan’s signature would be expedited. The expedited approval was of great importance to Elovitch and Bezeq, because a delay in granting regulatory approval would have led the German buyer to withdraw from the deal.”

Although the source of that information could in this case have been Elovitch, or “officials around” Netanyahu, it may be assumed that Mendelblit would not have mentioned the claim unless Erdan had confirmed it.

Netanyahu took the opportunity of former cabinet minister Gideon Saar’s departure from politics in November 2014 to appoint Erdan public security minister. This meant the end of Erdan’s troublesome (from Elovitch’s point of view) term as communications minister.

Erdan probably did not object to receiving a senior cabinet position, but Mendelblit says Erdan asked Netanyahu to stay on as communications minister as well, apparently until the end of the term (the election was held in 2015), to see through the reform in the telecommunications market. Netanyahu refused, and appointed himself communications minister.

This is the way Mendelblit described it: “Your decision not to extend Erdan’s term in the communications ministry was made despite Erdan’s request to remain in office, at least until ... the completion of the reform, which would have hurt Bezeq and Elovitch.”

The attorney general said messages on this matter were conveyed to the prime minister by Nir Hefetz. According to these statements “Elovitch is against Erdan continuing as communications minister.”

This matches reports by the Kan news corporation in June that one of the witnesses in this case told investigators that he had met Elovitch in late 2014 after Erdan had left the Communications Ministry and that Elovitch had boasted to him that the prime minister’s son Yair was already tweeting a new theory that Erdan had been pressured by the police to incriminate Netanyahu by means of intelligence information it had collected in the so-called Yitzhaki document, which contains intelligence on Knesset members and cabinet ministers in the outgoing Knesset, compiled on orders of the head of the police investigations and intelligence division at the time.