Netanyahu Tried to Aid Hollywood Producer Milchan’s Purchase of Israel’s Ch. 2 - While Receiving Gifts From Him

Netanyahu allegedly sought to advance a deal that would help Milchan, who has admitted giving the Netanyahus some $100,000 in gifts

Israeli-American movie producer Arnon Milchan (L) is flanked by then-Finance Minister Benjamin Netanyahu as he announces his donation of $100 million to establish a new Israeli university, at a press conference on March 28, 2005 in Jerusalem.
David Silverman/Getty Images

Toward the end of 2015, after Israeli-bred Hollywood producer Arnon Milchan had sold most of his shares in the failing Channel 10, his friend Prime Minister Benjamin Netanyahu, who was also communications minister, allegedly tried to help Milchan obtain an interest in Channel 2, Haaretz has learned.

The idea that was meant to help Milchan get back into the Israeli TV market was a partnership between him and businessman Udi Angel, a shareholder in the Channel 2 franchisee Reshet. The next step was to try to merge Reshet with the competing franchisee, Keshet. These ideas were discussed at various meetings attended by Milchan, Netanyahu, Milchan’s business manager in Israel, Zev Feldman, and Shlomo Filber, the Communications Ministry director general and Netanyahu’s close associate. One of the meetings attended by Netanyahu took place in Milchan’s home.

According to someone in the know about these contacts, Milchan needed the help of the communications minister and the ministry director-general because merging the franchisees would probably have required regulatory changes.

The plan fell through in the end, according to another source familiar with the details, because the late Moshe “Mosi” Wertheim, one of the owners of Keshet, opposed the merger of the franchisees. But the very fact that Netanyahu was involved with the clear business interests of a close friend who was plying him with expensive gifts would at the very least constitute a serious conflict of interest.

The main thrust of Case 1000, in which Netanyahu is suspected of receiving such gifts from Milchan, is ascertaining what Netanyahu may have allegedly done to advance Milchan’s interests in return. If the TV franchisee plan had gone ahead, it would have been good for Milchan and for Netanyahu. From Milchan’s perspective it would have been a successful investment that would have compensated him for the aggravation he’d suffered at Channel 10, which led him to sell most of his shares to another tycoon, Len Blavatnik. Netanyahu, for his part, would have potentially bought influence in an important media outlet, namely Channel 2 News.

PM, Milchan claim there was no quid pro quo for gifts

Both Netanyahu and Milchan have told Case 1000 investigators that the gifts Milchan gave the Netanyahus – which included cigars, Champagne and jewelry – were not given to obtain favors from the prime minister. But both confirmed to detectives that Milchan had asked Netanyahu for help in getting his extended visa to the United State renewed. There are also suspicions that Netanyahu intervened on Milchan’s behalf when he sold his Channel 10 shares.

Three weeks ago Milchan was questioned under caution – that is, as a suspect – on suspicion that he had bribed Netanyahu. Haaretz has learned that the National Fraud Squad made these allegations against the judgment of Attorney General Avichai Mendelblit, who believes Milchan should have been questioned on less serious allegations. The decision by the investigators to allege bribery despite the position of the attorney general and others in the Justice Ministry reflects a dispute over what Netanyahu may be charged with in the future. Police clearly think there is an evidentiary basis to accuse Netanyahu of having accepted bribes, while Mendelblit believes that at this stage the evidence points to fraud and breach of trust.

It remains to be seen what allegations will be made against Netanyahu when he is questioned next. Since he was questioned in March, police have obtained a considerable amount of information that Netanyahu has yet to be confronted with, both in Case 1000 and Case 2000, in which Netanyahu is suspected of trying to make a deal with Yedioth Ahronoth publisher Arnon Mozes for more favorable coverage in return for weakening Yedioth’s rival paper, Israel Hayom.

Both cases have the common denominator of the prime minister seeking influence in the media. Several other aspects relating to Netanyahu’s intervention in the sale of and appointments in Channel 10 are also being looked into as part of the Case 1000 probe. For example, there are suspicions that Netanyahu promoted Blavatnik’s purchase of Channel 10 over a rival because Blavatnik was offering Milchan better terms.

To Haaretz’s question of whether the prime minister had intervened in any of Milchan’s media business dealings or had worked to make sure Blavatnik would buy Channel 10, the Prime Minister’s Office said, “Your claims are baseless and aimed solely at exerting improper pressure on the law enforcement authorities to harm Prime Minister Netanyahu. The prime minister has always acted in the state’s best interests. We repeat – there will be nothing, because there is nothing.”

Associates of Milchan said that reports about compensation that the Hollywood producer allegedly received from Netanyahu are "baseless."

"Mr. Milchan had occasionally received offers to get involved in business initiatives in various fields, including the media, and did not need the assistance of any elected official. The end result – huge losses at Channel 10 and an exit from business activity in Israel – prove that the 'compensation' thesis is unfounded."

"Mr. Milchan, who had worked for Israel's security on sensitive issues for many years, didn't receive anything," the associates added.