Investigating Netanyahu's Steel Shares Would Only Delay Indictment, Attorney General Believes

Only a clear sign of criminality would persuade Mendelblit to open a probe. Still, the PM's chances of remaining in office at the start of 2020 are slim

Netanyahu delivers a speech in his home in Jerusalem, April 1, 2019.
Olivier Fitoussi

Only a clear indication of a crime is likely to persuade the attorney general to open yet another investigation against Prime Minister Benjamin Netanyahu on the matter of the steel shares, an issue to be taken up after the election.

In Attorney General Avichai Mendelblit’s view, the draft indictment he sent to Netanyahu in three corruption affairs describes criminal acts by a person unworthy of being prime minister.

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Any additional investigation or pre-investigation probe would only delay final indictments against Netanyahu in the first cases. This would defeat the purpose of removing him from power, in Mendelblit’s view.

The Tax Authority prosecutors are soon to submit their legal opinion of Netanyahu’s holding shares in the steel company to Mendelblit. These shares brought Netanyahu a profit of millions of shekels at the end of 2010. Only if they find a substantial suspicion of a connection between the profits and Netanyahu’s hyperactive involvement in the submarines case, is Mendelblit likely to instruct on launching another investigation.

If it transpires that the prime minister’s cousin and sponsor Nathan Milikowsky was an unmistakable interested party in the deals between ThyssenKrupp and the Israeli government, and that Netanyahu had been aware of this, the entire picture will change. In this case, Netanyahu’s decision to advance the purchase of the seventh, eighth and ninth submarines and to retract his objection to sell submarines to Egypt will be seen as egregious. But at present this seems a remote scenario.

The question is what will happen if after the election, the prosecution will conclude that the shares case alone merits opening another investigation. At this point Mendelblit appears to lean against it, and unless he finds suspicions of highly incriminating material, similar to that of the other cases against the prime minister, another investigation is unlikely.

This did not make headlines due to the election turmoil, but last week Mendelblit asserted that Netanyahu had deceived the public when he stated that he had told the attorney general the secret reason for agreeing to sell the advanced submarine to Egypt, behind the backs of Defense Minister Moshe Ya’alon and Chief of Staff Benny Gantz. Mendelblit issued a public letter stating that he was not privy to the secret.

Netanyahu, he stressed, maintained in his testimony about the submarines that there was a secret reason to removing the objection regarding Egypt, but said he would agree to share it only with Mendelblit.

When he received Netanyahu’s testimony, Mendelblit held a consultation in his office to decide whether to agree to hear Netanyahu out, and ultimately decided to pass. He didn’t want to become a witness in the submarines case, as this would have prevented him from continuing to handle it.

But Netanyahu then revealed the secret to the investigators who came to his Balfour official residence to get his version of the affair, albeit indirectly, but with pretty transparent give-away clues. The information he kept from Ya’alon and Gantz in 2014, he gave the police investigators in 2018.

Mendelblit and his people describe the submarines case very differently than do the retired generals in Kahol Lavan and Netanyahu’s other critics. Nobody disputes the filth and ugliness surrounding the purchases or the public importance to expose them. But some see it as a case of a state witness who paid small to medium sums of money as bribes to a few public officials.

“Despite the stench rising from the submarines case, from the evidentiary point of view you cannot compare its criminal gravity to the Yisrael Beiteinu case,” one of them said this week.

Michael Ganor, a central figure in the submarines affair, is seen in the Justice Ministry as a “crook,” whose detention after he withdrew from the state witness agreement was required. To arguments that it seemed vindictive and aggressive, one of those involved said one detail in the case showed that Ganor intended to obstruct the investigation and justified the detention. But the source refused to say what that detail was.

Since the submarines case broke out, Mendelblit and State Prosecutor Shai Nitzan have been accused of making a mistake when they hastened to announce at the beginning of the investigation that Netanyahu wasn’t a suspect in the case. Some argued that Mendleblit knowingly decided not to involve Netanyahu in a criminal case due to national security considerations, namely the fear that the Germans would cancel the deal. The Justice Ministry firmly rejected these claims, saying that even the police didn’t ask to question Netanyahu under caution.

In 2017 two investigations were conducted against Netanyahu’s confidants – one in the submarines case and the other in the Bezeq-Walla corruption case. Netanyahu wasn’t classified as a suspect in either. “In the Bezeq case, before it became the Bezeq-Walla case, we detected criminal activity on the part of Communications Ministry director general Shlomo Filber in Bezeq’s favor, but we couldn’t find a motive,” a source familiar with the cases said.

“The Tax Authority prosecutors, who investigated the case, scanned Filber and his family’s bank accounts and found no signs of his receiving benefits from Shaul Elovitch or any of his people. Already then they began to suspect that Filber is a puppet, and that the desire to advance Bezeq’s interests in a way that will give it a profit of millions of dollars was his boss’.”

In the submarines case, on the other hand, it turned out that each of the suspects, even if they were related to Netanyahu, had a motive to advance the deal: attorney David Shimron, who received hundreds of thousands of shekels from Ganor; Avriel Ben Yosef, who was a friend of Ganor’s and is suspected of advancing the deals for bribes; and of course the prime minister’s former bureau chief David Sharan, who allegedly received cash bribes from Ganor.

“When the Bezeq case blew open, Filber quickly turned state’s evidence and said that Netanyahu was the one who ordered him to help Elovitch. None of the suspects in the submarines case said something like that about Netanyahu,” the source said.

Sharan plays a key role in both cases. When the Bezeq-Walla case became public, the police summoned the former bureau chief to testify. He gave the investigators dramatic details about the event that would become the vantage point in the draft indictment against Netanyahu: the meeting in mid-2015, in which Netanyahu instructed the new director general Filber, with a gesture that couldn’t be mistaken, to advance Elovitch’s interests.

When Filber was confronted with Sharan’s testimony, he was convinced the former bureau chief had turned state’s evidence and would be treated leniently for the serious suspicions against him in the submarines case, in exchange for the incriminating testimony against Netanyahu. This drove Filber to cross the line himself and sign a state’s evidence agreement.

Barring a dramatic turn of events, Netanyahu will remain in office and the confrontation between him and Mendelblit and the prosecution will be raised a notch. This will happen if Netanyahu sets up a narrow right-wing government and casts a hostile justice minister, who will appoint a soft state prosecutor and strive to mobilize the coalition to legislate a law giving him immunity from indictment.

In the next few weeks additional episodes in the saga of Netanyahu’s cases will surface. Then we’ll find out about testimony by ministers and senior politicians, like Yair Lapid, who told the police that the only two times Netanyahu approached him in a certain matter when he was finance minister in his government were in a bid to persuade him to support extending the “Milchan Law,” which would have been very helpful to the Hollywood producer.

Then too we’ll learn why the law enforcement system sees Public Security Minister Gilad Erdan as a significant witness in the Bezeq-Walla case, and find out from the WhatsApp messages sent by the prime minister’s adviser, Perah Lerner, about Noni Mozes’ control on the components of Netanyahu’s third coalition. We will also be exposed to the way Netanyahu cajoled Milchan to buy his wife Sara an expensive piece of Jewelry, and find out how Iris Elovitch demanded in November 2016 to bury the exciting submarines case in the Walla news site.

“Netanyahu is going to stay for a long time,” she predicted at the time, laying out her philosophy about the links between money and government. “If you have only one communications channel without business, you can get away with anything,” she said.

At the same time he’s setting up a government, Netanyahu will be called to a hearing. The prime minister will try to get money for his new defense team, which to this day hasn’t seen a penny. Recently Netanyahu told the High Court of Justice that he would ask the permits committee to take out large loans from his cousin Milikowsky and from his secondary Santa Claus, the billionaire Spencer Partridge.

But since the steel shares affair became public, Netanyahu seems to be keeping his distance from his cousin’s pockets. Haaretz has learned that he is expecting a loan only from Partridge.

Over all this, the scenario drafted by Netanyahu’s deceased lawyer Jacob Weinroth will hover: a deal that would banish Netanyahu from public life and spare him a possible jail sentence. Even if Netanyahu wins the elections on Tuesday, the chance of him sitting on the prime minister’s seat at the beginning of 2020 now appears very slim.