For almost two years, the Israel Securities Authority has been investigating a long list of alleged serious criminal wrongdoings at telecom giant Bezeq and its Yes satellite television subsidiary. Over a year ago, the ISA recommended filing indictments against senior personnel at the Bezeq group. The investigation led to one of the more serious charges against Prime Minister Benjamin Netanyahu, in what is known as Case 4000, which involves an alleged exchange of regulatory concessions for positive media coverage. The ISA and the Israel Police have recommended indicting Netanyahu and former Bezeq owner Shaul Elovitch in that affair.
In addition to the ISA's own investigators, strategic advisers from outside firms – such as the Ben Horin & Alexandrovitz strategy and communication company – have been waiting behind the scenes, accompanying the regulator's activities in the public arena. This firm, which has grown dramatically in recent years, is now facing Netanyahu in yet another arena: It is handling the election campaign of Benny Gantz, now perceived as the greatest threat to the premier's political future.
Such a conflict of interest is but one of many such instances that are now cropping up in the current election campaign. The rise in status of strategic and media advisers, and the fact that they are often those who are closest to the candidates’ ears, gives them enormous influence over subjects that will be put on the agenda and on future decisions. But no one is looking at the hidden interests of such advisers and at conflicts of interest that may arise as they give advice simultaneously to politicians and to the many economic players who depend on politicians’ decisions.
These days, media advisers have themselves become players in the public arena, sometimes even formulating policy. Their main function is not just to figure out what the public wants and to garner as many votes as possible for their clients, but also to forge connections between different players. They have direct access to senior figures in different domains, such as politics and business, which enables them to chalk up significant advantages to both sides.
By way of example, it's enough to recall the limelight focused on Lior Horev, who was a consultant to former police Commissioner Roni Alsheich, or the criticism heaped on Moshe Klughaft, who advised Habayit Hayehudi, conducting a vicious campaign on behalf of the party against the Israeli left – to see how strong such individuals' impact can be on candidates and the public at large.
Hidden business-government-media ties
At the ISA, someone has realized how problematic the situation is. TheMarker has learned that the regulator has suspended its work with Ben Horin & Alexandrovitz during the election campaign. But these advisers have other clients who are happy to have a connection to someone who may be the next prime minister. Such clients include Bank Leumi, Super-Pharm and others.
Also whispering in Gantz’s ear these days is Ronen Tzur, the controversial PR consultant known for his aggressiveness. His firm also handles other clients, which may be dependent on and subordinate to Gantz in the future, should he be elected – including the Histadrut labor federation, the Israel Electric Corporation, the Jewish National Fund and others.
In addition, the ad agency handling Gantz, Leomek Hatodaa, also provides services to clients that are under strict regulatory control, like the Union Bank of Israel and Sano.
While Gantz's advisers stand out because of their potential for a conflict of interest, his competitors’ consultants are in the same boat. Netanyahu is handling his own campaign but Likud’s creative manager is Yisrael Einhorn, who also advises big companies such as Castro, Tempo and Checkpoint. Netanyahu’s personal spokesman simultaneously deals with media coverages of hospitals including Hadassah, in Jerusalem. Moreover, Yesh Atid leader Yair Lapid and Labor Party chief Avi Gabbay also have several consultants who could be in a conflict-of-interest situation.
In 2012, the state comptroller addressed the issue of a consultant who simultaneously advises several public bodies, citing the case of Zamir Dahbash who was working with the ISA and the Bank of Israel, as well as with an organization subject to their oversight. The comptroller warned against creating situations of conflict of interest, since various entities may have different objectives. In 2014, the Finance Ministry cancelled its dealings with a PR firm, Scherf Communications, since the latter was involved at the same time with financial organizations including Bank Leumi and Psagot.
The potential for conflict of interest has grown sharply in recent years, and there have been a number of high-profile corruption cases involving senior media consultants suspected of playing an active role in acts of bribery. The most prominent has been Nir Hefetz, Netanyahu’s former adviser, who turned state's evidence against his former boss in several cases. In the so-called submarines affair, aka Case 3000, there is a recommendation to indict consultant Tzachi Lieber; media adviser Ronen Moshe has been accused of bribery in the Yisrael Beiteinu affair; and adviser Tal Silberstein has become embroiled in a bribery case involving billionaire businessman Beny Steinmetz.
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