'No Deal if Netanyahu Doesn't Sign': Tycoon's Statements Shed New Light on Bribery Case

Shaul Elovitch said he felt he had to give PM favorable coverage to get merger approved

Prime Minister Benjamin Netanyahu chairs the weekly cabinet meeting at his office in Jerusalem, Dec. 9, 2018.
AP Photo/Oded Balilty, Pool

In a 2015 statement obtained as part of the criminal investigation of Benjamin Netanyahu, former Bezeq controlling shareholder Shaul Elovitch said he felt the need for the company’s Walla news site to favor the prime minister in order to obtain government approval of the telecommunication company’s merger with Yes, Elovitch’s satellite television firm.

Police have recommended bribery charges against Netanyahu, claiming he sought positive coverage from Walla in exchange for government regulatory policy benefiting Bezeq. In addition to serving as prime minister, Netanyahu was communications minister from November 2014 until February 2017. Writing in 2015 about the damage he would sustain if Netanyahu failed to approve the Bezeq-Yes merger, Elovitch stated: “No harm would be caused to the self-righteous reporters, but I would suffer enormous damage. If [Netanyahu] doesn’t sign, there’s no deal.”

The statement, made in January 2015 ahead of the March 17 general election, was included in thousands of pages of evidence gathered by prosecutors in preparation for the marathon deliberations on the cases. The prime minister denies any wrongdoing. The Bezeq-Walla case, which police have dubbed Case 4000, is one of three criminal investigations pending against Netanyahu. It is ultimately up to Attorney General Avichai Mendelblit to decide whether to indict the prime minister.

Around the time that Elovitch made the January 2015 statement, he sought to tilt Walla’s coverage in favor of Netanyahu, whose approval as communications minister was necessary for Bezeq’s purchase of Yes from Elovitch’s firm Eurocom Communications for around 1 billion shekels (some $270 million). When the mild-mannered Elovitch complained about self-righteous or “destructive” reporters, as he described them on other occasions, the message was clear. He wanted Walla’s reporters to cooperate by downplaying criticism of Netanyahu by opposition leaders over alleged irregularities at the Prime Minister’s Residence in Jerusalem.

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Elovitch’s comment supports the two main suspicions involving the prime minister in the Bezeq-Walla case — receptivity to alleged demands by Netanyahu and his agents that Walla treat the prime minister’s with kid gloves, together with the expectation of substantive regulatory favors from the government. A clear link between the two would implicate Netanyahu and Elovitch in allegations of bribery.

In the period leading up to the 2015 election, Netanyahu wasn’t quick to sign off on the Bezeq-Yes merger and Elovitch began to show signs of nervousness. According to evidence from the investigation, in February 2015 he told Zeev Rubinstein, Elovitch’s main go-between with the Netanyahus, that the gloves would be coming off. Elovitch quickly retracted the comment, but he also reportedly told an associate, referring to Netanyahu, that “he knows how to ask, but usually it’s a one-way [street].”

Those hard feelings would dissipate later, however, when Netanyahu won the election, appointed Shlomo Filber director general of the Communications Ministry and, allegedly, directed a series of government benefits to Bezeq.

Several significant scenes in the Netanyahu investigations took place in the period around that election.

If the allegations against Netanyahu are correct, it might be assumed that the panic that seemed to grip him when polls suggested he would lose the election could have pushed him into proposing a quid-pro-quo arrangement with Yedioth Ahronoth publisher Arnon Mozes. In the so-called Case 2000, Netanyahu allegedly agreed to promote a bill to restrict the circulation of Yedioth’s main competitor, Israel Hayoman, in exchange for favorable coverage. Police have recommended charging Netanyahu with bribery in this case as well.

FILE PHOTO: Shaul Elovitch sits in the Magistrate Court during his remand hearing in Tel Aviv, Israel, February 22, 2018.
REUTERS/Amir Cohen/File Photo

That panic might also have led him, according to police, to pressure Elovitch, directly and through Rubinstein and the Netanyahu family’s publicist, Nir Hefetz, to put Walla’s weight behind the prime minister’s re-election campaign.

It might also be assumed that the euphoria and hubris that seized Netanyahu after his sweeping election victory in March led him to stay on as communications minister, to demand complete obedience in that area from his coalition partners and to continue to aid Elovitch: that, by approving the Bezeq-Yes merger and halting reforms that would have cut costs for consumers while eating into Bezeq’s profits.

Some of the secret meetings between Netanyahu and Mozes took place after the calling of early elections in 2015 and were motivated by that development. The two men spoke before nearly every election. The six and a half hours of recordings of the meetings between the prime minister and the Yedioth publisher provide a few moments recalling those days.

In his conversations with Mozes, Netanyahu asked which scenario would serve him better, one in which a united religious Zionist slate ran or one in which Habayit Hayehudi and the National Union ran separately.

In private conversations, Netanyahu complained that Mozes was protecting his nemesis, Naftali Bennett, and his future finance minister, Moshe Kahlon. “You’re pumping up [Kahlon],” he said, and ridiculed Kahlon’s media image as a “simple man of the simple people.”

Yitzhak Tshuva and Yossi Maiman are also “men of the simple people,” he said, referring to two natural gas magnates, hinting heavily at Kahlon’s connection to the two men. Mozes defended himself and asked Netanyahu to give him an example of favorable coverage of Kahlon over the previous three months. “What’s important are the next three months,” Netanyahu responded. Mozes for his part urged the prime minister to throw all his political weight into crushing Israel Hayom, calling the free daily an “atom bomb.” as he put it. He asked the prime minister to look him in the eye and promised him that if the Knesset passed the law restricting Yisrael Hayom, he would see to it that Netanyahu would stay in office for as long as he wanted. Netanyahu, the only one of the two who knew their conversations were recorded, generally sounded more cautious than Mozes. “There are moments when he speaks to the microphone,” as Mendelblit put it in one of the discussions of the investigation.

In the end, the negotiations went nowhere. Mozes, who saw Netanyahu tumbling in the opinion polls and Zionist Union’s Isaac Herzog and Tzipi Livni gaining strength, presumably thought he could get rid of his rival and use his successors to promote the anti-Israel Hayom bill. Yedioth Ahronoth launched an all-out attack on the prime minister, which together with the failure of his negotiations with its publisher freed Netanyahu of his fear of Mozes and allowed him to mount a head-on assault on him.

When Mozes was questioned in connection to the investigation in 2017, he played the innocent. When he was presented with his incriminating recorded promises to Netanyahu, Mozes claimed he was making fun of Netanyahu and argued that even if he wanted to, he could not place a well-oiled propaganda machine at Netanyahu’s disposal because his control over journalistic content in the group in which he held a controlling share was limited. This line of defense can be crushed by almost anyone who worked at Yedioth Ahronoth in the past two decades. One of the newspaper’s senior journalists, Nir Hefetz, has turned state’s witness.

On the day before the 2015 election, Haaretz published an article by media consultant Orit Galili, who worked with Netanyahu. She said the prime minister had told her in the past that he was afraid of only five people, disclosing two names: Avigdor Lieberman and Mozes. The three others are the Austrian billionaire Martin Schlaff, Haim Ramon and Arye Dery. It seems that Netanyahu is no longer afraid of any of them, certainly not the publisher whom he dubbed in a private conversation in the summer of 2016 “Voldemort” — the villain in the Harry Potter series — and ascribed mafia methods to him.

The man who feared Mozes, and also envied him, was Elovitch. He called his rival by the code name usually reserved for the prime minister, “the big one.” He was careful not to escalate the competition with Mozes and saw to it that Walla did not damage him in any way. Elovitch had trouble understanding how Mozes managed to control his editorial staff so well and maintain such quiet, while his interference in the content at Walla leaked out and turned into a detailed investigation. Like the Yedioth publisher, Elovitch wanted the journalists whose salaries he paid to serve his economic interests. The man who never dreamed of being a publisher and was relatively new to the field found himself going head to head with particularly demanding clients, whose frequent demands to slant coverage who drove him, and particularly the go-betweens, to hysteria on more than one occasion.

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Case 2000 and Case 4000 are some of the most important ever investigated here. If the criminal justice system is meant to protect social values, then these affairs threatened to pulverize some of the most fundamental of these: freedom of expression and journalistic work, and certainly the faith of the public in its servants and the media. In Case 2000 the deal allegedly only partially went through, and Netanyahu’s recordings provide direct evidence against him. In Case 4000, it is suspected that the deal went through completely. Here there are no recordings, but there is a series of pieces of evidence that Netanyahu acted for Bezeq and demanded slanted coverage on Walla.

A prime example of the bubbling pressure cooker of Case 4000 is provided by the panicked correspondence of Zeev Rubinstein, a close associate of the Netanyahus who worked in the past with Elovitch and called him “the boss.” On one occasion, when Walla published a colorless report about the visit of the prime minister and his wife to the United States, Rubinstein demanded that Elovitch change the wording to suit the family’s demands. “Shaul, it’s my balls,” he wrote. “It’s my head. Do you want them to kill me or are you ready to change this and clean it up?”

The item was ironed out, Rubinstein stayed alive and continued to mediate between the prime minister’s residence with Bezeq’s top tier. The second go-between, Hefetz, was sounder. His pressure, in Netanyahu’s name, dealt among other things with the demand to blacken the reputation of Meni Naftali, a former caretaker of the prime minister’s residence, by publicizing a sexual harassment case against him that was closed for lack of evidence.

All of these stories will come out in the weeks to come in meetings in Mendelblit’s office with senior prosecutors and Justice Ministry officials. In the previous election Mendelblit was cabinet secretary, and it was he who wrote and sent the dismissal letters to Yair Lapid and Tzipi Livni. After Netanyahu won, he had the time to turn to another battle, to close the criminal case against him in the Harpaz affair, an alleged 2010 plot by Lt. Col. Boaz Harpaz and others to illegally undermine the choice of former army Chief of Staff Gabi Ashkenazi’s successor. Netanyahu, who supported Mendelblit’s bid, certainly regrets it today. He accuses the attorney general for knuckling under pressure and approving the investigations of the prime minister in three cases.

Over the past two and a half years, Mendelblit has managed the Netanyahu cases without a deadline. Now he wants to reach an interim phase before the election on April 9: an announcement of his intent to indict the prime minister pending a hearing. In a few weeks, if there are no dramatic developments, we will know whether Mendelblit has adopted — at least as a starting point — the position of the tense economics and taxation prosecutors: indictments for bribery in Case 2000 and Case 4000.

Attorney Jacques Chen responded for Elovitch: “It is very regrettable, but no longer surprising that with precise timing with the date when cracks begin to appear in Case 4000 and when disagreements emerge regarding it, pressure is once again put on the attorney general lest he dare close the case. Any intelligent person understands this improper pressure brought to bear at this time. We do not intend to handle this case in the town square and in the newspaper. Suffice it to say that this is a show that is a distortion of reality and we note that the prime minister’s signature [approving the Bezeq-Yes merger] was technical and did not have to be given at that particular time. We also note that the Bezeq-Yes deal was approved by a long series of relevant regulators, a decision that they stand behind to this day.”

Attorneys Navit Negev and Niv Sabag, representing Mozes, declined to respond for this report.

In a statement, the Prime Minister’s Office declined to comment on what it called the baseless claims raised in this article, “but the attempt to depict the basic work of spokesman as something improper is bizarre. Such approaches between politicians, editors and publishers happen all the time, and always have. As for Meni Naftali, the complaint against him for sexual harassment of a female employee at the prime minister’s residence was reported in many media outlets, and may have also been published on the Walla website. The attempt to present a news event that was in any case covered by all the media as one that required 'special effort' to publish is baseless and bizarre, and is more evidence of the collapse of the case. The tendentious and distorted presentation of these things is another part of the improper, timed pressure on the attorney general to declare a hearing at any cost before the election, although it is clear that it will be impossible to conclude it before the election.”