Report: Israeli Police Take Over Case Investigating Netanyahu's Connection to Telecom Giant Bezeq

The move follows a Haaretz article that revealed stronger evidence of involvement between several of the key actors in the affair

Illustration of (L-R) Arnon (Noni) Mozes, Shaul Elovitch, Prime Minister Benjamin Netanyahu and Arnon Milchan.
Eran Wolkowski

The investigation into the relationship between Prime Minister Benjamin Netanyahu and the controlling shareholder of the country’s biggest telecom company has been transferred to the police from the Israel Securities Authority, according to the Israel Television News Company’s Amnon Abramovich on the Friday-evening program “Ulpan Shishi.”

The case is the second one in which Netanyahu has allegedly tried to win favorable news coverage from one of the country’s media barons. The case involves Netanyahu’s links with Shaul Elovitch, the controlling shareholder of telecom company Bezeq and its news-site subsidiary Walla.

Earlier this week, the police recommended that Netanyahu be charged in two separate cases, the first for receiving lavish gifts from billionaires, the second for arranging a deal with the publisher of the daily Yedioth Ahronoth, Arnon Mozes, under which Netanyahu would receive better coverage. Netanyahu denies any wrongdoing in the cases against him.

Last week, sources told Haaretz that evidence in the Bezeq case had strengthened, including copious testimony and correspondence between people involved in the affair, including one person close to Netanyahu.

In the Bezeq case, Netanyahu and the then-director general of the Communications Ministry, Shlomo Filber, allegedly helped Bezeq to the tune of hundreds of millions of shekels. In return, Walla gave consistently favorable coverage to Netanyahu, especially to his wife Sara, sources say.

A few weeks ago, after the Israel Securities Authority announced that its investigation into Bezeq had been completed, Haaretz reported that the probe had uncovered evidence bolstering suspicions of a quid-pro-quo relationship between Netanyahu and Elovitch. At the time, the sources said the suspicions had not yet been investigated thoroughly enough, a situation that appears to have changed.

A few months ago, the state told the High Court of Justice that the Bezeq case, also known as Case 4000, had been returned to the securities authority for further investigation. At a meeting last week with journalists, Attorney General Avichai Mendelblit said developments had occurred in the investigation, but he declined to elaborate.

A key witness in the Bezeq case is expected to be Ilan Yeshua, Walla’s chief executive. On Yeshua’s orders, critical articles on the Netanyahus were censored, while fawning stories on Sara Netanyahu that came from the prime minister’s aides were published, sources say. Meanwhile, headlines were allegedly toned down and harsh news items were pushed to the website’s margins or removed entirely.

As Haaretz’s Gidi Weitz wrote last week, “Yeshua told his employees more than once that deep down he believed Netanyahu was destroying the country, yet he had no choice but to extol the Netanyahus, because those were the orders he received from his boss. He also told others that he was under heavy and incessant pressure from Elovitch and his wife, Iris, on this issue.

“And in conversations with journalists, Yeshua even drew a line between this censorship and regulatory decisions by the Communications Ministry, then headed by Netanyahu, which directly affected Bezeq’s profitability.”

Elovitch, a modest man who for years operated under the media’s radar, bought Bezeq through a corporate pyramid with the help of enormous loans. He had to keep the company’s profitability high and pay himself huge dividends in order to repay his swelling debts to banks and institutional investors. The police suspect that Elovitch needed Netanyahu’s help to accomplish this, leading to a quid pro quo.

According to the sources, in a private conversation with a senior media personality, Netanyahu described Yedioth Ahronoth’s website, Ynet, as Israel’s most influential media outlet and even quoted statistics on how many people visited the site, astonishing his interlocutor.

According to the sources, even before Netanyahu’s negotiations with Yedioth publisher Mozes failed, Netanyahu believed he needed an alternative, which could have been Walla.

In May 2015, a few days after Netanyahu’s fourth government was sworn in, he fired Communications Ministry Director General Avi Berger over the phone. Berger was considered a red flag for Bezeq because he had fought to carry out a reform of the landline telephone market to significantly lower consumers’ phone bills, Bezeq’s biggest source of profits.

Netanyahu replaced Berger with Filber, a loyalist without expertise in the communications market. As revealed by Amitai Ziv in TheMarker, Filber met with Elovitch on his very first day on the job.

Filber promoted a deal Elovitch wanted over ministry objections, and the holding company Eurocom Group sold its controlling stake in the satellite television company Yes to Bezeq. Eurocom, like Bezeq, is owned by Elovitch.

After Netanyahu’s new government was sworn in, he approved the deal, but did not disclose to the public that he and Elovitch were friends.

In October 2015, Haaretz published an investigative report on Netanyahu and Elovitch’s web of ties and their possible quid-pro-quo relationship. Immediately after that article appeared, a senior journalist allegedly met with the Walla CEO and warned him that “this will end in Lahav 433,” referring to the police unit that handles fraud and financial crimes.

Walla officials reportedly feared that a criminal investigation was possible; people involved in the case have therefore been careful to save text messages and emails that might shed light on Netanyahu’s relationship with Bezeq and Walla.