Watchdog Panel Reveals Netanyahu Had Business Ties With Cousin Asked to Cover His Legal Fees

PM held shares jointly in a business with his cousin and others at least until 2009. Netanyahu has now asked to let Nathan Milikowsky cover his legal fees

Israeli Prime Minister Benjamin Netanyahu chairs the weekly cabinet meeting at his Jerusalem office, Sunday, Feb. 10, 2019.
Gali Tibbon,AP

The state comptroller’s committee that on Sunday rejected Prime Minister Benjamin Netanyahu’s request to have his legal fees covered by two wealthy associates also revealed something else: that Netanyahu has previously unreported business dealings with his cousin, Nathan Milikowsky.

The ruling noted that at least until a decade ago, Netanyahu, with Milikowsky and other family members, were partners holding shares in a publicly traded company in the steel industry.

One of the Milikowsky companies was a supplier to Thyssenkrupp, the German shipbuilder at the center of the Case 3000 submarine affair.

“In a previous decision of the committee (from August 18, 2009), it emerges that the prime minister in 2009 had holdings in a partnership, the rest of which was held by Mr. Milikowsky and his immediate family, and that this partnership had a major holding in an industrial corporation that deals in steel additives,” the state comptroller’s committee said on Sunday.

“Mr. Milikovsky made a loan to [then-] Finance Minister Netanyahu, with the approval of the committee, so that he could meet the tax liability owned on the corporation’s profits due to his holdings. The loan was supposed to be repaid from [Netanyahu’s] share of the corporation’s profits. It was thus shown that the two have, or at least had, business relations, beyond mere family ties.”

The comment came in Sunday’s ruling that Netanyahu must pay back $300,000 he accepted from Milikowsky without the committee’s approval, and refrain from taking any more assistance from him or another wealthy associate, Spencer Partrich.

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The state comptroller didn’t reveal any further information on the partnership and a spokesman denied TheMarker’s request to see the original documents, citing rules that were in effect at the time Netanyahu submitted the information that barred them from being released to the public.

A spokesman for the prime minister dismissed any concerns about Netanyahu’s connection with Milikowsky’s business as “fake news.”

“The prime minister was the owner of shares in his cousin’s company while he was a private citizen. A year after he was elected prime minister [in 2009] he sold the stock in his cousin’s company with full approval of the authorities., For a decade, the prime minster has had no connection with the company and he at no time knew whether it did or did not have any connection with Thyssenkrupp,” the spokesman said.

Nevertheless, the response raises questions about why Netanyahu never disclosed his holdings before 2009. He was a private citizen from the time he lost the 1999 election to Ehud Barak until he joined Ariel Sharon’s government in 2002.

From that time on, he again became an elected official, serving as foreign and then finance minister and later as head of the opposition in the Knesset.

Even today, it is not known to whom Netanyahu sold the shares, how much he was paid or whether he still has business interests with the Milikowsky family.

Nathan Milikowsky and his brother Dan inherited a family steel business from their father Matityahu upon his death in 1969. The elder Milikowsky had founded Jordan International in the 1940s as a trading company. Among other things it imported steel to Israel and represented the company British Steel in the United States,

The brothers expanded the business to include manufacturing after they took control. Among other things, they acquired a maker of steel additives called SeaDrift Coke in 2003. Between 2008 and 2010, the family merged SeaDrift and another company they controled called Carbide Graphite into a publicly traded company called GrafTech International.

According to stock exchange filings at the time, they received stocks and bonds worth $450 million and another $260 million in cash. Other stock exchange filings show that “immediate family” members of Nathan Milikowsky were due additional money from the SeaDrift sale.

In any event, the sales of the two companies made the brothers major shareholders in GrafTech, and on and off during the years 2010 to 2015 Nathan served as a director. The stock was held through a variety of ways, including personally, via companies and through family foundations.

During those same years, GrafTech reported that Thyssenkrupp was one of its four main customers, although it didn’t quantify sales. In 2015, control of GrafTech was sold to Brookfield Asset Management, although the company continues to be traded on the New York Stock Exchange.

Nathan Milikowsky, meanwhile, has a connection to the Shimron, Molcho, Persky & Company law office and to attorney David Shimron himself, who is related to Netanyahu and the Milikowsky family. He inherited the family as clients from his father.

In Case 3000, which revolves around a deal for the Israeli Navy to buy submarines and missile boats from Thyssenkrupp, Israel Police last November recommended that Shimron be among six people indicted in the affair.

Shimron began representing Michael Ganor, the German company’s Israel representative, in 2009. Police say Ganor used that family connection to Netanyahu to advance Thyssenkrupp’s interests in what became a deal worth nearly $2 billion for the company