When Lapid Warned Hollywood Mogul Milchan About Netanyahu

Israel’s new prime minister is due to testify for the prosecution next year in the so-called lavish-gifts case against Netanyahu. It will be interesting to see who’s prime minister at the time and who’s opposition leader

Gidi Weitz
Gidi Weitz
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Arnon Milchan, center, with singer Einat Sarouf and Yair Lapid at a Tel Aviv club in 2004.
Arnon Milchan, center, with singer Einat Sarouf and Yair Lapid at a Tel Aviv club in 2004.Credit: Moti Kimche
Gidi Weitz
Gidi Weitz

“I remember him and me sitting with George Clooney on the balcony. … His closeness to Bibi came from his need to be close to power for publicity.”

The speaker is Yair Lapid, Israel’s new prime minister, but back then, he was testifying in the so-called lavish-gifts affair. It’s one of three cases in which former Prime Minister Benjamin Netanyahu, now the opposition leader, is on trial on charges of bribery, fraud and breach of trust.

The “him” above is Hollywood mogul Arnon Milchan, a bestower of some of the gifts, someone Lapid knew well.

Lapid told the police that he warned Milchan about Netanyahu. “I told him: ‘He’ll just use you and you’ll become like his servant.’ … I remember I talked about it once with [Yisrael Beiteinu leader Avigdor] Lieberman. … I said: ‘Well, you can’t rely on Arnon, he has become like Bibi’s servant.’”

Next week the testimony phase of the lavish-gifts segment of the trial begins. Next year it will be Lapid’s turn to testify for the prosecution at the Jerusalem District Court. By then, he might be an elected prime minister testifying against the opposition leader, or it might be the other way around.

Lapid became acquainted with Milchan in 1994. “I was a journalist with Channel 1. I was traveling at the time. I interviewed the Dalai Lama, Arnold Schwarzenegger and Bill Gates,” he told police investigators.

“I was traveling with a film crew abroad, and that’s how we became friends. In 1995 I left Channel 1, and then [Milchan] offered me a job managing a television company. … I went to Los Angeles. I was CEO of the company. … Six months later I was jogging one morning and there was a terror attack at [Tel Aviv’s Café] Apropos … a major attack. This was my father’s café. … A police officer brought a baby out in her arms. … I said, ‘I’m going back to Israel.’

“The truth is, abroad I’m a fish out of water. I came back to Israel, but we remained friends all those years. … [Milchan] would torture my wife and explain how much money she was losing because her husband can only live in Israel. About $70 million.”

Yair Lapid and Benjamin Netanyahu at a cabinet meeting in 2014, when Lapid was finance minister.Credit: Marc Israel Sellem

Despite the friendly ties, Lapid refused to call Milchan a friend. “I have three friends. Arnon is something else. Do you know Ofer Eini [the former chief of the Histadrut labor federation]? Ofer is Don Corleone.

“He told me: ‘Do you want to know how to tell who’s your friend? You kill a sheep, wrap it up and send it to your friend’s house. … There’s blood. … You tell him: Put that in your house, don’t ask questions. If he asks questions, he’s not a friend.’”

In 2013, when Netanyahu appointed Lapid finance minister, Milchan sent Lapid a huge bouquet. He returned it. Not long after, on one of Milchan’s visits to Israel, he invited Netanyahu, Lapid and their wives to dinner at his villa in Beit Yanai overlooking the sea.

“It was a pleasant evening,” Lapid remembered. “Netanyahu knows how to manage evenings like that. He’s well-read, intelligent. … It was of course a kind of show of strength by Arnon, who knew how to get both of us over for dinner.”

Milchan was keen to extend a regulation that gave Israeli citizens returning to live in Israel an exemption from reporting foreign income. He asked Lapid to extend the 10-year exemption by another 10 years, and Milchan, along with his lawyer, Pini Rubin, met with Lapid in the basement of his home in Tel Aviv.

“I hope this doesn’t get written down, but I didn’t like Pini Rubin. His arguments didn’t hold water. … I listened to them politely and still thought it wasn’t a good idea,” Lapid said.

He added: “After that, Bibi talked about it. He asked me: ‘Did Arnon talk to you?’ I said: ‘Yes. I don’t think it’s a good idea.’ He said: ‘I think it’s a good idea.’ He wanted to check the box that he had spoken to me about it.”

Lapid vaguely remembered that he asked the tax authority chief for his opinion, which was negative. In the meantime, Netanyahu told Lapid at another meeting: “It’s a proper law.”

“I thought it was a very strange issue for the prime minister to ask the finance minister about,” Lapid testified. “It’s a completely marginal tax regulation that applies to very few people. … He may have thought that because I was friendly with Milchan and he was friendly with Milchan, we had a common interest.”

Lapid added: “Let’s put it this way: Netanyahu didn’t talk to me about any other tax regulation. At the time, Netanyahu kept a great distance from economic affairs because the economy was in a crisis.”

Yedioth Ahronoth publisher Arnon Mozes at the Jerusalem District Court in December.Credit: Ohad Zwigenberg

In 2018, when the police recommended indicting Netanyahu in the lavish-gifts affair, he spoke with his communications adviser, Nir Hefetz. Hefetz told Netanyahu that Lapid hadn’t mentioned Milchan in Lapid’s list of conflicts of interest.

“How is it that he’s not questioned about a conflict of interests?” Netanyahu fumed. Hefetz agreed and suggested that Netanyahu discuss the matter with his lawyers.

Lapid was also mentioned a few times regarding the case in which Netanyahu is suspected of conspiring to provide favors for the tabloid Yedioth Ahronoth in exchange for positive coverage. Before he entered politics, Lapid wrote a column for Yedioth. The main favor: Netanyahu would move to limit the circulation of Yedioth’s chief rival, the free tabloid Israel Hayom.

Yedioth Ahronoth publisher Arnon Mozes told the police that Netanyahu was sure that Mozes was behind the friendship between Lapid and Naftali Bennett during the 2013 election campaign. “He had a theory that I had organized Bennett and Lapid against him before the election,” Mozes said, adding: “That never happened.” He described the idea as “bizarre” and “insane.”

Mozes testified: “He told me that the election results were because of me, that Lapid was working for me and Bennett was working for me. ... He told me: ‘Talk to them.’ … He thought I had power over them. … He gave me imaginary power that I didn’t have.”

Mozes confirmed that he spoke with Lapid about the bill that would weaken Israel Hayom and restore to Yedioth Ahronoth the dominance it enjoyed before Israel Hayom gained pace after its birth in 2007.

Lapid didn’t vote in the preliminary votes on the bill because of his conflict of interest, but some of his colleagues in his Yesh Atid party supported it. Later, Channel 13 News revealed that Lapid and Mozes had held meetings in the home of a mutual friend in the upscale town of Savyon east of Tel Aviv.

The day could come when Netanyahu’s lawyers summon Lapid to testify in their client’s defense.

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