Analysis |

Netanyahu Ignored the Lessons of History Regarding Wealthy Friends

In 2000, an Israeli statesman was forced to resign over the receipt of cash from wealthy businessmen. Will the prime minister suffer a similar fate in the ‘cigars and champagne’ gifts scandal?

Ido Baum
Ido Baum
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Prime Minister Benjamin Netanyahu.
Prime Minister Benjamin Netanyahu.Credit: Olivier Fitoussi
Ido Baum
Ido Baum

Graft doesn’t have to be in cash. Adulatory coverage in one of the most popular newspapers in a country is a perquisite that no politician could refuse without choking.

According to reports Sunday, Prime Minister Benjamin Netanyahu discussed a deal with publisher Arnon Mozes for his Yedioth Ahronoth newspaper to run positive articles on the premier. In exchange, Netanyahu was to push legislation that would weaken Israel Hayom – the main competition to Mozes and his paper. These things create the potential for any number of crimes.

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In recent days, people at the Justice Ministry have been trying to argue that the Mozes-Netanyahu affair may look “juicy” but it probably isn’t criminal.

But if the facts revealed by the press are true, then the potential for criminality here is significant. The question is what Netanyahu was prepared to do, if anything, in exchange for positive coverage.

Even if Netanyahu did not actually lift a finger, even proving that he was prepared to seriously consider the proposal could amount to breach of trust and possibly even an attempt to solicit graft. Or Mozes might be charged with trying to corrupt.

That’s just one affair Netanyahu is involved in. There’s also the gifts affair, which is far from being the nonevent his spinmeisters are trying to suggest.

The hedonistic lifestyle of Netanyahu – and seemingly some of his family – has been supported for years through expensive gifts from wealthy businessmen: this is probably the main point divulged so far from the police inquiry. Only after the details come out can we really assess whether criminal behavior is involved. Before that, though, the question arises of whether the “cigars and champagne scandal” even warrants demanding that Netanyahu vacate the prime minister’s seat.

If we assume that the little known so far is accurate, that’s a categorical yes. A prime minister whose daily life depends on the mercies of business barons befits a banana republic. Israeli law enforcement officials warned politicians about accepting candy from the rich back in May 2000. Netanyahu seems to have forgotten about that call.

According to information leaked so far, one of the cases the prime minister is being questioned about is accepting cigars (for himself) and champagne (for Sara Netanyahu) from the Israeli billionaire Arnon Milchan, worth hundreds of thousands of shekels, if not more, over time. Netanyahu’s lawyer, Jacob Weinroth, hasn’t denied that these gifts were given – just that they were presents between friends that do not transgress the law by so much as a whisker.

Prime Minister Benjamin Netanyahu enjoys a cigar.Credit: Alex Levac

This all begs an analogy to former President Ezer Weizman, which led to his resignation in July 2000.

For years, Weizman received financial support from wealthy Israeli businessman Rami Unger and French entrepreneur Edouard Seroussi, journalist Yoav Yitzhak revealed. Then-Attorney General Elyakim Rubinstein ordered an inquiry into the affair. Ultimately he closed the case, in May 2000, for a number of reasons, chiefly the statute of limitations.

Weizman claimed to have accepted the gifts in the framework of friendship, not wearing the hat of a public servant. Under Israeli law, though, a public servant who receives gifts must not only disclose the present but give it to the state. What Rubinstein wrote about Weizman bears revisiting.

“In this case,” he wrote, “the situation is a unique one. The friendship between Mr. Weizman and Mr. Seroussi did arise from Mr. Weizman being a public servant at certain stages, yet it has been argued and presented that the gift was made primarily based on their special friendship in and of itself. Yet the very uniqueness of the situation would ostensibly have justified, especially for a minister in the Israeli government, to view it as required to report, if only for the sake of appearances.” Now replace Weizman with Netanyahu, and Seroussi with Milchan.

Looking ahead and at other public servants, Rubinstein wrote that, in the event of doubt, effort should be made to prove that the gift was not made to a public servant per se, or that it fell into the category of the permissible irregularities of “a gift of small and reasonable value given as is the norm under the circumstances,” or gifts from colleagues, or a publicly awarded prize. Otherwise, he wrote, an inquiry could ensue.

Based on Rubinstein’s opinion, it is clear why an investigation into Netanyahu’s cigars had to take place. It is also clear that the gift is not of minor value when given over years, on an ongoing basis. The accruing monetary value is high.

It is also clear that the claimed friendship between Milchan and Netanyahu remains to be proven – and in any case does not relieve Netanyahu of the duty of disclosure.

As far as Netanyahu is concerned, the Public Service Law (Gifts) is a snag, but no more. If it turns out that he acted on behalf of Milchan or other benefactors, then Netanyahu could be suspected of graft and conflict of interest; this arouses the potential for breach of trust.

Edna Arbel, who was state prosecutor during the Weizman case, felt in that instance that ministerial duty is reflected, among other things, in not feeding from the hands of businessmen while holding public office, while there are clear rules forbidding them from accepting perks or money beyond their salaries – and if they do accept anything, they have to report it.

As Rubinstein summed up at the time, “I already said that it seems the dominant component in the relations between Mr. Weizman, Mr. Seroussi and Mr. Unger is close friendship. Indeed, most people never see amounts of money like these as gifts (if they see them at all), especially when [the benefactors] are not family. However, one cannot rule out affection and esteem that translate into a real gift from a person of means.” On the other hand, a public official must behave transparently and that had not been done, Rubinstein concluded.

What enforcement officials must ask in such cases is whether the gift is in the gray area or if it clearly contains elements of corruption. The value of the gifts isn’t enough, in and of itself, to answer this question.

Over his years in office, Weizman received a lot of money from Seroussi and Unger. Netanyahu is not known to have accepted any cash. Expensive presents can be in a gray, non-criminal area – but if the prime minister acted, even once, on behalf of the people who gave him gifts, intervening in a way he couldn’t have for other people, this is grave.

The Weizman case set a precedent. The attorney general at the time viewed the former president as someone with enormous “credit,” which needed to be considered when deciding whether or not to indict. The fact Weizman decided to resign from the presidency (citing health reasons) was probably also considered. But even Rubinstein at the time said the Weizman case was a warning sign, stating: In public service, wealth and friendship should be kept apart.

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