Israeli Watchdog Altered Campaign Financing Report Critical of Netanyahu Confidant

Joseph Shapira ordered removal of criticism of Netanyahu's personal lawyer, who happened to recommend Shapira for the post of state comptroller.

Gidi Weitz
Gidi Weitz
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Netanyahu and State Comptroller Shapira, 2012.
Netanyahu and State Comptroller Shapira, 2012.Credit: Emil Salman
Gidi Weitz
Gidi Weitz

State Comptroller Joseph Shapira ordered the removal of criticism about David Shimron, who is Prime Minister Benjamin Netanyahu’s personal attorney, from a report about campaign financing which questioned the terms of Shimron’s employment by Likud.

It was Shimron who recommended Shapira for the post of state comptroller.

Shimron also coordinated the meeting between Shapira and Netanyahu at the end of which Netanyahu decided to call on the coalition to vote for Shapira as comptroller.

Individuals familiar with the details said Shapira’s intervention in the matter, concerning a person to whom he owes a debt of gratitude, constitutes a serious conflict of interest.

Haaretz has learned that Shapira’s report, which appeared about a month ago, stated that his investigators had discovered that Shimron, who has been legal adviser to Likud in recent years, gave the party extensive discounts for his services. Shimron, who represented Netanyahu on various legal matters for years, also represented Likud in coalition negotiations. Before the last elections, Shimron dealt with a complaint against the NGO V15, which campaigned against the Netanyahu government. Shimron claimed at the time that there was a clear and direct connection between V15 and the opposition parties Zionist Union and Meretz.

According to sources, the state comptroller’s investigators found that by virtue of an agreement with Likud there was a cap on Shimron’s fees, which meant that in certain months his office effectively provided many services for free or at considerable discount. The state comptroller’s investigators included this information in the draft report, in which they also recommended imposing monetary sanctions on Likud, because according to Israeli law political parties must not accept professional services that are not properly remunerated because as such they can be perceived as illegal, unreported contributions.

Haaretz has learned that Shimron told Shapira that he believed this critique should not be included in the final report, because lawyers’ fees are flexible and decided upon between attorney and client and a cap on fees is common. After a conversation between the two, and a hearing on the matter in Shapira’s office, it was decided not to include the criticism of Shimron and not to impose a fine for this matter.

Shapira also excluded from the report criticism of discounts Likud received from advertising firms.

Shapira has been criticized in the past for not recusing himself from matters pertaining to Shimron’s client, Netanyahu. Shapira claimed at the time that he saw no reason to do so.

The state comptroller is the official responsible for examining conflict of interests at senior levels. In 1977, the government set the rules for preventing conflict of interest by ministers and deputy ministers, based on a report by a committee headed by a judge, and determined that the state comptroller would be in charge of uncovering such conflicts.

The state comptroller’s office responded that it is occasionally required to weigh in on the matter of experts’ fees. The office confirmed that the terms of Shimron’s employment by Likud had been examined together with those of other experts employed by the party. An extensive team of experts had examined the matter “in light of court verdicts on fees for legal services as well as in light of the great variation in the setting of fees as explained by representatives of Likud verbally and in writing,” the office said.

“It was decided that under the said circumstances there was no place to determine in the case at hand that the fees actually paid constituted [anything irregular],” the statement by the state comptroller’s office said.

The office said discussion of the matter was held “in the presence of the comptroller and all relevant experts and the decision was made together after an in-depth and professional discussion. This was the case for each and every faction.”

The state comptroller’s office also said that the conflict of interest agreement he had signed when he took up his post made no mention of Shimron.

“More importantly, the state comptroller is obligated only to the Basic Law on the State Comptroller and acts in accordance with it. This is also proven by the state comptroller’s reports published in recent years.” Among these reports, the statement cited one investigating spending at the prime minister’s residences and a report on alleged double billing by Netanyahu for travel expenses, and noted that Shimron represented Netanyahu during those probes.

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