When it comes to the possibility of launching an investigation against Prime Minister Benjamin Netanyahu into the affair involving the buying and selling of shares in a company owned by his American cousin – there's good and bad news.
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The good news, as reported by Haaretz's Gidi Weitz last week, is that Israeli law enforcement officials submitted a request to their U.S. counterparts for information relevant to this affair months ago, which likely stopped the clock from running out before the statute of limitations kicks in (assuming an official inquiry eventually takes place). The bad news: Israel's Justice Ministry claims that the information the U.S. Department of Justice has yet to supply must be received and reviewed by Attorney General Avichai Mendelblit before determining whether to investigate the affair.
Actually, Mendelblit had enough information at his disposal to order an investigation when the affair first came to light 16 months ago, but the public was informed that he delayed his decision so as not to influence the country's three rounds of elections. When the sell-by date of that explanation passed, however, the Justice Ministry started blaming the Americans for dragging their feet.
To launch an official investigation, there must be reasonable grounds to suspect that a law has been violated. The issue of which offense will be examined is critical. The Justice Ministry has chosen to examine whether bribery was involved in the Netanyahu stocks affair – a suspicion that is much harder to substantiate at this stage. If the investigation were focused on fraud under aggravated circumstances, for example, there would already be enough evidence to warrant the opening of an investigation.
At the center of affair in question is American industrialist Nathan Milikowsky, Netanyahu’s cousin, who in various mysterious ways showered the prime minister's family with almost 18 million shekels ($5.2 million) between 2007 and 2019. These benefits, in some cases, ostensibly took the form of shares in SeaDrift, a company owned by Milikowsky, which were purchased at one-tenth or less of their real value, and later sold for 16 million shekels. Moreover, there was also the $200,000 to help Netanyahu’s daughter Noa (from a previous marriage) purchase an apartment; $300,000 illegally transferred to help Netanyahu finance his legal defense; and ongoing allowances of untold thousands of dollars, in the form of envelopes stuffed with cash, over a period of many years. This is an incomplete list.
In terms of a charge of bribery, finding a substantial reason for suspicion will be difficult because there is no evidence of any real benefit that Milikowsky received or expected to receive in exchange for his actions, in light of his cousin's status as the top elected official in Israel.
The two cousins have explained on different occasions that the generous assistance stemmed from the close family ties the two have, and is part of a tradition that started with Milikowsky’s father, who offered financial support to Netanyahu’s father.
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Milikowsky probably has other cousins whose financial situation may not be as good as Netanyahu’s, but they didn’t enjoy even a millionth of what the prime minister received. The claim that a multi-millionaire like Netanyahu needs financial help from an American cousin sounds unconvincing and puzzling – and yet, the familial closeness poses an obstacle to a hypothesis of bribery, as long as no evidence is found of something given by Netanyahu in return to Milikowsky or someone associated with him.
The chances that evidence that turns this into a bribery case will arise from information or an examination in the United States at this stage – almost a year and a half after the affair was made public – are close to zero. Thus, the idea of looking at the whole affair on the basis of suspected bribery indicates that Mendelblit is looking mainly for excuses in the United States.
The original case of "cash-filled envelopes" (the Talansky case) – in which former Prime Minister Ehud Olmert was convicted in 2015 on charges of fraud, aggravated fraud and breach of trust – is amazingly similar to the affair involving Netanyahu and the shares. Olmert received frequent deliveries of cash from American businessman Morris Talansky, amounting to hundreds of thousands of dollars over the years in which Olmert served as mayor of Jerusalem and at minister of commerce and industry.
In that affair, the police could not point to a reciprocal benefit, where Olmert gave something in return to Talansky. The most significant finding in this regard were letters of recommendation that Olmert wrote to help Talansky in ventures involving wealthy businessmen including Sheldon Adelson and Yitzhak Tshuva.
The court convicted Olmert of fraud under aggravated circumstances, noting that his offense involved false reporting to the state comptroller: that is, Olmert did not report the money he had received from Talansky.
In the Milikowsky case, Netanyahu received unusual sums of money while, ostensibly, gravely violating reporting requirements and regulations relating to the holding of assets by public officials.
The suspicious sum paid for shares in Milikowsky’s company; the sophisticated financial maneuvering that apparently concealed the transfer of a huge amount of money to Netanyahu; the failure to report the cash deliveries and the $200,000 Milikowsky loaned to Netanyahu’s daughter, which may never have been repaid; and the $300,000 the American cousin paid to help underwrite the prime minister’s legal expenses in violation of the law, which were not returned to Milikowsky to this day – all these appear to be identical to the sort of fraud attributed to Olmert in the Talansky case.
That case is also an excellent basis on which to gauge the possible “aggravated circumstances” surrounding the offense of fraudulent receipt of funds. The aggravated circumstances are a necessary hurdle in the new affair because they would make the distinction between a misdemeanor, with a 5-year statute of limitations, and a felony, for which charges can be brought for 10 years. In the absence of aggravated circumstances, it would not be possible to delve properly into the part of the Netanyahu-Milikowsky relationship relating to the stock transactions, which ended in November 2010, almost 10 years ago.
In the Talansky case involving Prime Minister Olmert, the Jerusalem District Court found three aggravating circumstances – the relatively large sums of money that Olmert received from Talansky; the false reporting to the State Comptroller’s Office over a period of several years; and the high public positions Olmert held at the time that he received the money (as industry, trade and labor minister and as Jerusalem's mayor).
The Milikowsky-Netanyahu case in essence surpasses the Talansky case when it comes to two of the three criteria. The sums of money involved are greater (much greater) and for most of the relevant period, Netanyahu held a higher public office: He was prime minister.
The troublesome stammering of the Justice Ministry – which has said that additional information must be obtained from the Americans before deciding that some 18 million shekels given to the Israeli prime minister by a foreign tycoon is a matter that justifies an investigation – mainly shows that Netanyahu’s violent media assault on Attorney General Mendelblit has produced results.
The damage caused by this lame approach could be widespread. If the affair involving the shares is not investigated, Mendelblit will have essentially given his stamp of approval to a criminal arrangement that will be used from here on by elected officials to obtain funds from various sources under the auspices of the law – an arrangement in which a cousin can serve as a clearinghouse.