Did Milchan and Packer Push Netanyahu to Pick Their Buddy to Head the Mossad?

As Yossi Cohen's ties to Netanyahu's rich friends come to light, shadows lengthen over the night he was tapped to lead Israel's spy agency. If a link could be established, Israel may see both its prime minister and its Mossad chief gone in one fell swoop.

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Arnon Milchan, top left, james packer, top right, PM Benjamin Netanyahu, bottom left, and Mossad chief Yossi Cohen.
Arnon Milchan, top left, James packer, top right, PM Benjamin Netanyahu, bottom left, and Mossad chief Yossi Cohen.Credit: Olivier Fitoussi, AP and Bloomberg
Amir Oren
Amir Oren
Amir Oren
Amir Oren

A few months ago, while Attorney General Avichai Mendelblit was still pondering whether to turn the suspicions against Prime Minister Benjamin Netanyahu into a full-blown criminal investigation, I proposed a hashtag for the relations between the two: #AM:PM – Mendelblit against the PM. But the longer the investigation drags on, the centrality of someone else who shares the attorney general’s initials is becoming ever clearer: Arnon Milchan.

Milchan’s relations with Netanyahu (similar to Netanyahu’s links to Australian billionaire James Packer) are not just pushing Netanyahu down the slippery slope. They are simultaneously pulling the rug from under the feet of Mossad chief Yossi Cohen – a friend of all three.

Earlier this week, Uri Blau and Judy Maltz exposed the business connection – which was discussed, even if ultimately never carried out – between Milchan, Packer and Cohen. Just one more minute and then-National Security Council Director Cohen would have been a partner, or hired hand, of the two gentlemen. Only his appointment as Mossad chief, under peculiar circumstances that are detailed below, put an end to the plan, which Netanyahu says he neither knew of nor approved.

Cohen has been running the Mossad for just over a year. Very few complaints have been heard about his work, and no glaring mistakes on distant shores have made the news.

The late Maj. Gen. Yitzhak Hofi was one of Mossad’s best chiefs in its 65-year history. He used to tell his successors that a wise captain knows how to navigate the ship without dominating the commanders under him – in this case the heads of all the departments and units.

For now, the ship sails on. The only rough waters it has hit are political and diplomatic: Cohen’s journey to Washington to brief President-elect Donald Trump’s transition team. In the eyes of his counterparts at the CIA, this was inexcusable. The administration will change, but the memory will linger.

Before the bad news about Cohen’s business links dominated headlines this week – so much so that it seemed to him that those around Netanyahu were trying to divert the fire his way – Cohen was a convenient Mossad chief for his direct superior, the prime minister. The Mossad gritted its teeth over the past eight years while watching the diplomatic missions carried out by Isaac Molho, without any requirement to take a polygraph test and as a private citizen with business and other affairs that are not subject to civil service regulations.

This was a problematic mix, something Cohen exercised restraint over in favor of keeping the peace with his boss. A very small sacrifice for someone who sucked up to Sara Netanyahu on his way up, and who made an effort to “remain in eye contact” with her – as he said in his previous National Security Council role, when he accompanied her on visits that could somehow be presented as related to security.

The Turkel Committee on senior government appointments approved Cohen’s appointment to head the Mossad because they were convinced he was the right man, was professional and had no special personal connection to Netanyahu.

But the question of mutual friends was never examined. The prime minister cannot appoint a friend to such a sensitive official position, but those who wrote the regulations never thought about a friend of a friend.

Beware cliques bearing gifts

Even before this week’s Haaretz exposé, Raviv Drucker reported on Channel 10 of Cohen’s association with Packer. This included the Australian allegedly providing Cohen with Mariah Carey concert tickets and the use of a luxury hotel suite worth thousands of shekels. When Menachem Begin said that one does not ask a gentleman who he spent the night with, the only person hiding behind his romantic wink was Lebanese leader Bachir Gemayel. But Mossad officers are not always meeting agents.

It is possible that Cohen was simply looking for a comfortable bed at the end of an exhausting day serving his country, and he happened to find a vacant room belonging to the Australian benefactor and there was no deal here. Sometimes, the most innocent explanation is also true. But when the Civil Service Commission and State Prosecutor’s Office have yet to be convinced, and if it turns out that Cohen’s relations with Milchan and/or Packer had other problematic layers, the Mossad could very well lose its head.

According to the law and the instructions of the attorney general, state employees and elected officials are forbidden from accepting gifts – not even tickets to shows, the theater or soccer games – in order to “preserve their integrity and public trust, and to prevent a situation in which a public servant will have a special interest in the person giving the gift or the impression that the gift was given to curry favor.”

Former police chief Rafi Peled was forced to resign after he was given significant discounts, though not free rooms, at a hotel. Another former police commissioner, Shlomo Aharonishki, was only saved from a scandal when he received tickets to basketball games by a combination of immediately paying for them and claiming an operational need for being present at the matches. Cohen’s case appears closer to that of Peled.

Before Peled came Jacob Perry, then the head of the Shin Bet security service (and now a Yesh Atid lawmaker). During his term, doubts emerged over his zealotry for ethics and proper management. A quarter of a century ago, then-Prime Minister Yitzhak Shamir made do with the appointment of a retired investigative officer, Gen. Rafael Vardi. Today, though, such affairs can no longer be buried without a police investigation – even if it only bears the tenuous title of “examination,” not “investigation.”

Of course, the trivial gifts Cohen allegedly received from Packer pale in comparison to what the Netanyahus allegedly received from Milchan. Netanyahu’s version: Mutual friendship. One time they – Milchan and his wife, Amanda Coetzer, a former tennis pro – gave to us; another time we gave to them. The principle remains the principle, like an exchange of prisoners after a war when Israel released 5,000 and the Arab countries five.

It’s easy to check: Who else received similar gifts from Milchan? Does the Netanyahu family have other friends with whom they exchanged presents of such proportions?

The sophistry of Netanyahu’s defense lawyers cannot disguise the documented facts. Milchan, who was originally a business partner with the late Kerry Packer (the Australian tycoon and father of James), had a relationship of extravagant buying compared to nauseating exploitation. He bought; they leeched off him. Milchan funded the Netanyahus’ lifestyle, not just with a regular supply of fragrant tobacco and spirits from local stores, but with expensive boxes of duty-free cigars (about $700 each) from the travels of his colleagues; items of clothing costing thousands of shekels ordered from the finest stores in Tel Aviv’s Kikar Hamedina; and special trips for the lady and her children in the well-appointed taxi of Gavri, the driver who worked regularly for Milchan and submitted the bill to him – which included many hours of waiting time. Waiting is also a gift when the meter is running.

And then Netanyahu had the chutzpah to preach to the public that there’s no such thing as a free lunch.

James Packer (rightmost), Yair Netanyahu and Sara Netanyahu at the UN, 2015.Credit: Mary Altaffer, AP

Cohen, the finely attired intelligence officer, recruiter and controller of spies, stuck with Milchan and made sure to visit and confer with him frequently, even before Netanyahu returned to the premiership in 2009.

It’s possible that this relationship helped him to get ahead in the Mossad. But if it turns out he deviated from civil service regulations or if they had an excessive influence on Netanyahu, they will bring him down, too.

Milchan and Packer established a global security firm called Blue Sky International in 2008, according to Blau and Maltz’s investigative report. The initials BSI – even if it is just a coincidence – remind one of Bibi and Sara. The company operated in Packer’s Australia, too, and also in India. This is a country Cohen particularly likes, after becoming acquainted with many of the most important figures there over the years – especially the partner Milchan won after he courted him so vigorously: Indian businessman Ratan Tata, the head of the enormous family corporation.

The 2008 terror attack in Mumbai led to the security partnership between Tata, Milchan and the Israelis. These included company chairman Ze’ev Feldman, an accountant (Milchan’s, too) and an old friend of Jacob Weinroth – who is also Sara and Benjamin Netanyahu’s lawyer in their criminal investigations.

Cohen, a civil servant for most of his adult life, doesn’t appear on the list of senior BSI executives published on the company website and which boasts Mossad, Shin Bet and IDF veterans. But Cohen had already befriended Milchan by then. And when Ehud Olmert fell and Netanyahu returned to the prime minister’s office, the connection probably didn’t do his promotion any harm.

In 1996, when he was first elected premier, Netanyahu had to put up with Shimon Peres’ appointment of Maj. Gen. Danny Yatom as Mossad chief. A year later, Netanyahu escaped by the skin of his teeth after a botched Mossad assassination he had authorized against Hamas leader Khaled Meshal in Jordan. Netanyahu undermined Yatom in the Mossad and was glad to accept his resignation a year later, following another mishap. In his place, for the first time in the Mossad’s history, he appointed a duo: Ephraim Halevy, with Maj. Gen. (res.) Amiram Levin as his deputy.

But Netanyahu lost the 1999 election the following year and Ehud Barak was satisfied with Halevy’s performance and didn’t want another hasty upheaval in the Mossad. Levin retired and Halevy stayed in office until Ariel Sharon appointed his confidant, Maj. Gen. (res.) Meir Dagan, in 2002. When Netanyahu returned to the prime minister’s office seven years later, Dagan still headed the Mossad. He reportedly prevented Netanyahu from launching an attack on Iran and remained in office for two more years. His deputies were replaced repeatedly: the last was Ram Ben-Barak.

Netanyahu was in no hurry to appoint a Mossad chief after Dagan. He begged Maj. Gen. (res.) Shlomo Yanai to quit Teva and take the job. Shin Bet chief Yuval Diskin believed he was Netanyahu’s candidate. They were both surprised to hear Netanyahu’s announcement at the end of 2010 that he was appointing Tamir Pardo, one of Dagan’s former deputies but by then a complete civilian. Pardo, who hadn’t angled for the job, was almost as surprised as they were.

The liaison officer of the Sayeret Matkal elite special-operations force in Entebbe, Pardo was with Yoni Netanyahu when he stormed the airport and was killed. But his acquaintance with Benjamin Netanyahu’s brother was too superficial to establish any expectations of returning to the Mossad’s top slot.

Mossad gossips wondered whether Netanyahu would again condition the Mossad chief’s appointment with the appointment of a deputy, especially given Pardo’s status then as an outsider. Those in the know bet on Cohen – a shrewd and well-connected field intelligence officer. Their wager turned out to be right: Netanyahu pulled Cohen from among his peers in the Mossad and promoted him to deputy chief, adding him to the handful of candidates for next Mossad chief.

PM Benjamin Netanyahu, wife Sara, and son Yair with actress Kate Hudson and producer Arnon Milchan in 2014.Credit: Avi Ohayon/GPO

At the end of Pardo’s five years, Netanyahu signaled that his personal preference was Cohen. When Pardo had wanted a third deputy, in 2013 Netanyahu appointed Cohen as head of the National Security Council in the Prime Minister’s Office – among other things, to groom him for the chief’s position.

In the NSC, Cohen strengthened his ties with Packer; his ties with Milchan were already close enough.

Packer and Milchan, as semi-exiles from their homelands, had status problems. Milchan, who wandered the world and resided in California (in addition to Herzliya and Beit Yanai), refrained from taking on another citizenship for tax purposes. Suddenly, for the same tax purposes, he wanted a work and residence visa for several years. Netanyahu fixed it. Also for tax purposes, Packer needed residence status in Israel. For this, he required the help of the interior minister or the head of a security organization who wanted to do him a favor. Such favors, which can be arranged with a word from the prime minister to the foreign minister, or with an official document among government officials, are worth a lot of money even to multimillionaires. Especially to them.

Naturally, the list of Mossad assets is top secret. But it’s safe to say who isn’t on it: James Packer, for example. So there’s absolutely no way he might have been granted a perk for his alleged contribution to Israel’s security.

“No way,” said officials in the Prime Minister’s Office (which acts as spokesman for the Mossad), responding to whether Cohen had attributed to Packer something he hadn’t done. “Total lies.”

This is a partial all-clear. There was a take, but no give. Cohen only allegedly received from Packer – a matter the Civil Service Commission and state prosecutor are examining. It remains to be seen whether Netanyahu was influenced by Milchan or Packer, directly or through a middle-woman, when he decided to appoint their friend as Mossad chief.

At the end of 2015, the keen-eyed Cohen felt that Netanyahu’s support for him to replace Pardo was weakening. He started sewing himself a golden parachute, in the form of a soft landing in Milchan and Packer’s company.

If we are to believe Netanyahu – and what reason has there ever been not to? – he didn’t know about his national security adviser’s contacts with the businessmen, who also happened to be the Netanyahu family’s close buddies and benefactors.

“These claims are totally unfounded,” his personal spokesman said. He also denied that Milchan or Packer had urged Netanyahu to promote Cohen, either six years ago or in 2015.

But the circumstantial evidence doesn’t support Netanyahu’s version. To examine it, one must return to December 7, 2015, and the eve of Netanyahu’s announcement about the next Mossad chief. All Netanyahu’s signals had been interpreted as though he had chosen someone else, “N.”

Netanyahu’s announcement on Cohen’s appointment almost sounded as though he had written it for N. (“The Mossad must adjust its capabilities to the cyber- and advanced technology era”) and then changed the name at the last moment.

The denials are stalling the press, but not the police. A short interview with Milchan and an examination of his phone records will reveal whether he spoke to either of the Netanyahus about Cohen on December 7.

If the answer is yes, Cohen will go with Netanyahu. The Mossad works in the shadows but cannot tolerate a shadow on its leadership. The next prime minister will appoint a new Mossad chief. The most likely is one of the two who saw Cohen pass them by: N. or Ben-Barak. Both are qualified and have refrained from political involvement. And if they have rich friends, at least those friends didn’t have the ear of the decision-makers and their wives.

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