'Flush Your iPhone': The Minute This Scandal Became a Netanyahu Bribery Case

Details of the intrigue that led police to recommend indictments against the prime minister and his wife

Prime Minister Benjamin Netanyahu and Bezeq owner Shaul Elovitch
Emil Salman and Eyal Toueg

On December 27, 2016, Nir Hefetz, the media adviser of Prime Minister Benjamin Netanyahu and his wife Sara, arrived at the home of Shaul Elovitch, controlling shareholder of the Israeli telecommunication company Bezeq.

Hefetz's motives for initiating the urgent meeting were dark: To obstruct the undercover investigation against the prime minister and destroy significant evidence. The day before that meeting, Haaretz had reported that Netanyahu was a suspect in two secret cases, without listing the precise allegations.

Does Netanyahu care about anti-Semitism?Haaretz

On the night of the meeting, immediately after Hefetz left Elovitch’s home, Ilan Yeshua, the CEO of the Walla News site of which Elovitch is also a controlling shareholder, was summoned to the house.

Elovitch and his wife Iris were waiting for Yeshua. They looked frightened.

According to the evidence the police had gathered in the case, dubbed Case 4000, Elovitch told Yeshua that the terrified Hefetz had asked to meet with Elovitch urgently, came to his home and told him that at the prime minister’s residence it was believed that the two secret affairs the police were investigating involved Netanyahu’s connections with two wealthy men: Australian billionaire James Packer and Elovitch.

Police recommendations in Case 4000
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Elovitch also told Yeshua that Hefetz had supplied him with a narrative that was cooked up and coordinated with the intent of leading to the failure of the anticipated police investigation.

Elovitch told Yeshua what Netanyahu’s story would be if an investigation were launched, as well as what Hefetz wanted Elovitch and Yeshua’s versions to look like.

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Yeshua had a key role to play in this criminal obstruction. The coordinated version was meant to keep Netanyahu and Elovitch out of criminal range and away from being painted as having a quid pro quo relationship.

Former Walla CEO Ilan Yeshua with his iphone, 2014
Eyal Toueg

Yeshua was to take personal responsibility for slanting coverage on the Walla news site to benefit the Netanyahus and to tell investigators that Elovitch never demanded anything like that of him, nor did Elovitch interfere in journalistic content. Elovitch told Yeshua that he and Hefetz had agreed to destroy the suspicious text messages they had exchanged and that Elovitch then demanded that Yeshua delete all incendiary material from his cellphone right on the spot.

In a scene that seemed taken from a film noire production, Elovitch, according to the evidence the police have, told Yeshua: “Throw your phone down the toilet.”

“Yeshua, who had served Elovitch’s interests for years, realized that he was entering very dangerous territory,” a legal source familiar with the details of the investigation told Haaretz.

“He promised Elovitch that he would delete all the incriminating correspondence between them, but begged Elovitch to allow him not to do it right then and there,” the source told Haaretz. “A real struggle developed and at the end Yeshua managed to get away on the pretext that his phone contained pictures of his family that were very close to his heart. He promised to destroy everything after he copied the photos onto his computer. It was very hard for him to get out of there with the explosive material. The next day, Yeshua met with his lawyers and told them about the incident. The report was written down and is considered very strong evidence.” 

Nir Hefetz at Tel Aviv Court, February 2018
Ofer Vaknin

A week after the nighttime meeting, Elovitch could breathe a little more easily. The two secretive probes against Netanyahu were exposed, and it turned out that they supposedly involved criminal connections between Netanyahu and two other businessmen – Yedioth Ahronoth publisher and managing editor Arnon Mozes and Israeli-American movie producer Arnon Milchan.

Although he had calmed down a little, Elovitch was still on edge, and according to the evidence collected by the police, he asked Yeshua frequently whether the material had been destroyed and whether he remembered what to say if a police investigation ensued. Yeshua assured Elovitch that the material had been swallowed up in a black hole.

“Luckily for Case 4000, Yeshua kept all the material and in fact fooled Elovitch,” a legal source recently told Haaretz. “If he had become part of the obstruction network, it is very doubtful this case would have been born,” he added.

In June 2017, the Israel Securities Authority arrested and questioned Elovitch and numerous senior figures at Bezeq on suspicion of fraud.

Shlomo Filber in Tel Aviv Magistrate's Court, February 18, 2018.
\ Moti Milrod

During the investigation, which dealt with a suspected attempt by Elovitch to defraud investors and wrongful ties between Elovitch and Communications Ministry Director General Shlomo Filber, indications emerged that Elovitch was using the Walla news site as a tool to give benefits to the chief regulator – Communications Minister Benjamin Netanyahu.

But despite these indications, the material was not seriously investigated, and in November the Israel Securities Authority conveyed its recommendations to the State Prosecutor’s Office department in charge of economic and tax crimes without even touching on the core of the affair.

At the same time, senior officials in the Justice Ministry were asked why officials in the prosecutor’s office were not urging the securities authority investigators to follow up on promising leads.

“The prime minister is under two criminal investigations. No one wants to get embroiled now in another investigation the end of which is not known and will put off a decision on Case 1000 and Case 2000 for a long time," a senior legal official told Haaretz at the time, referring to suspicions of bribery in the form of gifts to the prime minister and his wife (Case 1000), and a deal to secure positive coverage in the daily Yedioth Ahronoth (Case 2000).

About a week after the Israel Securities Authority recommendations, Haaretz’s lead headline reported that evidence had been found in the Bezeq case of quid pro quo ties between Netanyahu and Elovitch and that Attorney General Avichai Mendelblit and State Prosecutor Shay Nitzan had not yet instructed the police to investigate.

A few weeks went by before the prosecutor for economic and tax affairs, Liat Ben Ari, informed the securities authority that it would need to do some more investigating and summon Yeshua – who had served as Elovitch’s right-hand man at Walla for many years – to testify. “We had asked to question him before,” a source involved in the investigation said, “but approval was not given.”

Prime Minister Benjamin Netanyahu and Israel Police chief Roni Alsheich, November 2017.
Gil Eliahu

It is very doubtful that any senior official in the prosecution or the securities authority predicted what would happen one cold December day, when Yeshua first came to the authority’s office on Montefiore Street in Tel Aviv. “That was the moment when the glass ceiling was smashed and the Bezeq case became the Netanyahu case,” a person involved in the investigation said.

The testimony was defined by a person who read it as “a desire and need to come clean,” while Yeshua’s iPhone – the one he didn’t destroy, and which he gave to the police –  included hundreds of exchanges and dozens of recorded calls through which one main theme was clear: complete subservience of the Walla news site to the chief regulator as bribery.

Many of the instructions by Elovitch and his wife Iris connected, outright and callously, the need for sympathetic regulation and Netanyahu’s efforts to help (“he'd commit suicide for me,” as Elovitch put it), as well as the need to satisfy the Netanyahus. “I have to wean him off,” Elovitch wrote in one message, while in another, he instructed: “Give her everything possible,” referring to the prime minister’s wife. The wording was that of a bribery deal.

As Yeshua’s testimony was given secretly to the Israel Securities Authority, meetings were being held in the attorney general’s office. Mendelblit, who was sour on the raw material in Case 1000 and Case 2000, and treated them as something “you can’t vomit and you can’t swallow,” changed his tune.

What impressed him mainly were the huge regulatory benefits Netanyahu had allegedly given to Elovitch in his capacity as communications minister: approval of the merger between Bezeq and the satellite TV network Yes, worth a billion shekels, and stopping the reform in the wholesale market, which is believed to have saved Bezeq hundreds of millions of shekels over the years.

“It was clear at that point that the evidence in Case 4000 greatly entangles Elovitch and strengthens the suspicion that he had bribed Netanyahu. There was also the evidence indicating that Netanyahu had intervened to benefit Bezeq and that his director general, Filber, had acted as an agent for Bezeq’s interests within the Communications Ministry.

But there was no one who would testify to the connection between the two axes, a corrupt agreement between Netanyahu and Elovitch, for example, or awareness on Netanyahu’s part that he was promoting Elovitch’s interests in exchange for subordinating Walla,” the source said.

That is the main reason that Filber and Hefetz were drafted as state witnesses with very generous deals. Filber told investigators about Netanyahu’s involvement in promoting Bezeq’s interests. Hefetz told them about the boss’s involvement in slanting coverage on Walla.

Neither of them are considered optimal state witnesses and the information they provided apparently did not come close to the evidence provided by the legendary state witnesses Shula Zaken and Shlomo Dachner (in the Holyland affair) or Moshe Sela (in the Benizri case). But the higher echelons in the prosecutor’s office are certain, even now, that the agreements with them were necessary to crack the case.

The police recommendation reported Sunday reveals the name of a new star in the affair: Zeev Rubinstein, an associate of both Elovitch and Netanyahu, who is suspected of serving as an intermediary between the two senior players. The pieces of the puzzle come together thanks to the state witnesses, Rubinstein – who left allegedly implicating correspondence, as well as additional witnesses from Bezeq and the prime minister’s office inner sanctum.

The police recommendations, which seem to have been formulated quickly on the verge of hastily, a day before Police Commissioner Roni Alsheich puts aside his uniform, are not the final word.

In the coming weeks, marathon meetings will be held in the Justice Ministry before a decision is made whether to summon Netanyahu to a hearing, and about what the particular charges will be. If the attorney general announces that he intends to indict Netanyahu, he will give the prime minister's attorneys many months to study it. Only after he holds the hearing will we finally reach the end of the line.

Until this happens, Netanyahu, his protégés and those on his side will try to reduce Case 4000 to miniature dimensions and tell anyone who wants to hear it that this is a ludicrous case in which the bribery is “a gossip item about Sara,” as Netanyahu has said in private conversations.

This direction is not expected to change, even when the evidence becomes public and the dimensions of Netanyahu's pressure on the poor news website become clear, as well as the evidence on the huge regulatory benefits the prime minister gave Elovitch, benefits that hit the public in its pocketbook.

In response to Sunday's police recommendation, Shaul Elovitch's lawyer, Jacques Chen said: "For an extended period, the police, through their leaks, have been preparing us for this recommendation. The recommendations are a rehash that present nothing new and I hope that those handling the case will look at it from a legal and professional perspective divorced from the huge pressure being exerted on them and that has accompanied this investigation from the beginning and has tainted it. Mr. Elovitch insists that he has not committed any offense."