Pocket Money, Loans and Millions for Legal Advice: Has Netanyahu's Wallet Finally Been Found?

Everything we know about the one-way money trail between Nathan Milikowsky and his cousin, Prime Minister Benjamin Netanyahu

Nathan Milikowsky, Benjamin Netanyahu
Michael Falco/The New York Times, Gali Tibbon/AP

Before diving into the alleged ties among Benjamin Netanyahu, Nathan Milikowsky and the German company ThyssenKrupp in regard to the so-called submarine affair, there are important questions to be asked about the prime minister’s relations with his cousin and taxes.

Milikowsky has for decades given Netanyahu large amounts of cash, in addition to six-figure contributions to the prime minister’s legal defense fund and loans amounting to hundreds of thousands of dollars. The two men were also in business together, co-owning a manufacturing company until Milikowsky purchased Netanyahu’s stake for 16 million shekels ($4.440 million).

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Here’s what we know about the one-way money trail between Milikowsky and Netanyahu:

Milikowsky has been supporting Netanyahu for years, giving him several thousand dollars in cash every few weeks. Netanyahu told this to investigators for the so-called Case 1000, involving allegations that he accepted unlawful gifts from wealthy businessmen. By way of explaining how he paid for some of the cigars allegedly supplied by Hollywood producer Arnon Milchan, Netanyahu said he used cash that his generous cousin Nathan gave him. The prime minister told detectives it was part of a family tradition that began when Milikowsky’s father helped to support his own father. Milikowsky confirmed the story.

As reported recently, Netanyahu and Melikowsky had joint ownership of stock in SeaDrift Coke, a Texas-based manufacturer of petroleum needle coke. If Netanyahu’s version is credible, he acquired the shares in 2007, when he was the chairman of the opposition in the Knesset, and sold them to his cousin in November 2010.

Only in Netanyahu’s lexicon can someone who does business with him to the tune of 16 million shekels be characterized as a relative who provides him with cash as part of “financial support.” Anyone who can see straight would be aware that Netanyahu isn’t needy, and Milikowsky is no philanthropist. Netanyahu is a prime minister and Milikowsky is a capitalist — and they are business partners.

In 2009 Netanyahu asked, and received, permission from a committee in the State Comptroller’s Office to accept a loan from Milikowsky for a tax debt. The scope of the debt, and of the loan, are not known. Netanyahu refuses to publicly disclose these figures.

Israel Channel 13 News reported this week that when Milikowsky purchased Netanyahu’s stake in Sea Drift Coke in November 2010, $175,000 was deducted from the payment to Netanyahu. Associates of the prime minister said this was to repay the loan that was approved by the State Comptroller’s Office in 2009, and that the tax debt was owed on a dividend issued by SeaDrift to shareholders, including Netanyahu. There is cause to question this account, but there is no question that Netanyahu borrowed at least $175,000 from Milikowsky.

Before Netanyahu approached the approvals committee in the State Comptroller’s Office, Milikowsky had already given the prime minister’s lawyers $300,000 toward Netanyahu’s legal fees. Netanyahu wants to raise this amount to $1 million. There is cause to question Milikowsky’s largesse. Why would he give so much to the prime minister? How can we be sure that these funds, ostensibly for Netanyahu’s legal fees, are in fact a donation and not part of the two men’s business relationship?

The approvals committee has in effect determined that it cannot distinguish between Milikowsky the donor and Milikowsky the business partner. The committee didn’t just say this, it basically shouted it out in a decision that was like an alarm bell aimed at the police, the attorney general’s office, the government — and the tax authorities. Are the tax authorities not interested when business partners, one of which is the prime minister, explicitly admit to passing cash, defined as donations or as “allowance money,” between them for years?

The most suspicious aspect of the Netanyahu-Milikowsky relationship is the prime minister’s dissemination of false information, in a clear and blatant attempt to hide this relationship from the public. Perhaps this has to do with Netanyahu and Milikowsky’s business relationship with the ThyssenKrupp supplier GrafTech. The efforts to conceal the full nature of these relations is another fact that ought to be setting off red warning bells to the tax authorities.

When it was first published, in 2017, that Milikowsky was the owner of one of ThyssenKrupp’s suppliers, Netanyahu said he had nothing to do with the business dealings of his relative and that he had never discussed this with him. Netanyahu’s first version turned out to be untrue when the approvals committee exposed about a month ago that he had stock in Milikowsky’s firm. Netanyahu’s advocates have now supplied version No. 2, according to which he purchased the stock when he was a private citizen, that is prior to 2002.

This version also doesn’t hold up. The Marker reported on Friday that the company in which Netanyahu held stock was founded in 2005 — when he was the finance minister. Netanyahu adhered to this version for three days, until Monday. Then, in response to a video distributed by Kahol Lavan, the electoral alliance of Benny Gantz and Yair Lapid, he issued a third version. In it, he said he bought the shares in 2007, when he was head of the opposition.

The frequent changes to the story of the stock ownership shows that he knows something is fishy. The contradictions are apparently not only in statements to the media but also in the various versions given to the approvals committee. When Netanyahu asked for permission to receive funds from Milikowsky, he presented him as simply a relative, a donor motivated by generosity. The committee should have investigated the history of Netanyahu’s previous requests, which had described their relationship in entirely different terms.

So who is Nathan Milikowsky to Netanyahu? A donor or a business partner? Cousin or deep pocket? These are the questions that ought to concern the tax authorities.

“Nathan Milikowsky and the prime minister never did any accounting between them, and the attempt to create the appearance as though any business accounting was done between them is false and ridiculous,” Amit Hadad, an attorney for Netanyahu, said in a response.

Sara Netanyahu, the prime minister’s wife, said she and her husband are not in the habit of carrying credit cards.