Netanyahu May Be Banned From Dealing With TV Station Due to Milchan Ties

Channel 10 shareholder is key figure in graft investigation against prime minister, who is also communications minister. Prohibition may also apply to rival Channel 2.

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Arnon Milchan and Benjamin Netanyahu in Jerusalem in 2005.
Apparent conflict of interest: Arnon Milchan and Benjamin Netanyahu in Jerusalem in 2005.Credit: David Silverman/Getty Images
Sharon Pulwer
Sharon Pulwer

Senior Justice Ministry officials have in recent days been deliberating the possibility of forbidding Prime Minister Benjamin Netanyahu from dealing with matters pertaining to TV Channel 10, due to his connections with billionaire Arnon Milchan, a shareholder in the channel. At issue is whether a conflict of interest should be determined due to Netanyahu’s role as communications minister.

Milchan is the main figure involved in “Case 1000,” in which Netanyahu is suspected of receiving unlawful gifts from the businessman. The Justice Ministry’s deliberations are part of the state’s preparations for rebutting two High Court of Justice petitions submitted in this matter by the Zionist Union party and the Movement for Quality Government, calling for disqualifying Netanyahu from serving as communications minister. It is possible that a prohibition on his dealing with Channel 10 affairs will also include its competitor, Channel 2.

TheMarker reported earlier this week that at no stage did Netanyahu report his close relationship with Milchan, who currently holds 9.8 percent of Channel 10’s shares, making him an interested party. Milchan, who held 24% of these shares until 2015, has invested $50 million in the channel since 2000. At the end of 2014, when the channel was in crisis and faced closure, Netanyahu met with relevant figures and held numerous discussions on its fate.

This is not the first time Netanyahu is being asked to relinquish significant authority as communications minister due to his ties with tycoons. Last June Attorney General Avichai Mendelblit submitted his legal opinion regarding a conflict of interest arising from Netanyahu’s ties with businessman Shaul Elovitch, the controlling shareholder at the Bezeq telecommunications group and owner of the Walla! website.

The legal brief, prepared following an investigative report by Haaretz journalist Gidi Weitz, stated that the close relationship between Netanyahu and Elovitch precludes the former, as communications minister, from dealing with matters relating to companies owned by the latter. This included Bezeq, Yes, Pelephone, Bezeq International, Walla! and the Eurocom communications equipment company.

The brief clarified that Netanyahu must refrain from dealing with these companies individually, as well as from making decisions relating to the communications market which could substantially impact these companies. In this regard, it was necessary to distinguish between areas in which there is competition between Bezeq and other companies and areas in which some kind of monopoly exists, such as relations between cable providers Yes and Hot, which Netanyahu can also not deal with.

“The obvious areas in which more intervention by the minister is needed, including regulatory steps to encourage competition, are those in which competition is limited, with only a small number of players,” wrote Mendelblit, adding that “when the minister has ties to a controlling shareholder in one of the communications providers, in a limited sphere with only two competitors, the conflict of interest would be blatantly obvious.”

The brief also noted that “decisions about Hot, Bezeq’s main competitor, will raise concerns about a conflict of interest if such decisions have significant impact on Hot’s profitability or ability to compete, which indirectly affects Bezeq.”

The brief also prohibited Netanyahu from taking decisions on infrastructure for land lines, in which Bezeq holds an official monopoly.

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