Netanyahu Confidants Arrested in Israeli Telecom Giant Graft Case, PM Expected to Be Questioned

Case involves Netanyahu’s links with Shaul Elovitch, the controlling shareholder of Bezeq and owner of Walla news website. Police expands investigation

Israeli Prime Minister Benjamin Netanyahu, his wife, Sara and Shaul Elovitch, February 18, 2018
Eyal Toueg, Mark Israel Salem

Police on Sunday arrested two of Prime Minister Benjamin Netanyahu's confidants and several senior officials at Bezeq, the Israeli telecommmunication's giant, as part of the ongoing corruption investigation, dubbed 'Case 4000' involving the company and its possible relationship with the prime minister.

Netanyahu is expected to be questioned in connection to the case.

Following new evidence that indicates that alleged criminal activity in the case is more extensive than had been suspected, the police released a statement Sunday saying its Lahav 433 unit has officially opened a joint investigation with the Israel Securities Authority. Also on Sunday, Haaretz reported that three unnamed associates of Netanyahyu acted to benefit businessman Shaul Elovitch, Bezeq's controlling shareholder. Bezeq shares were trading down 1.15 percent in mid-mornning trading on the Tel Aviv Stock Exchange Sunday. 

Case 4000, revolves around the alleged quid-pro-quo relations between Netanyahu and Elovitch, whose Bezeq firm also owns the Israeli news website Walla. This is the second case involving allegations that Netanyahu tried to gain favorable news coverage by purportedly benefitting a media baron.

The first is an investigation of conversations betweeen the prime minister and the publisher of the Yedioth Ahronoth daily, Arnon Mozes, in which Netanyahu purportedly promised to enact policies benefitting Yediot in exchange for favorable coverage of the prime minister. Police have recommened that Netanyahu be criminally charged in that case and another corruption probe.

Last week, sources told Haaretz that evidence in the Bezeq case had become stronger and includes copious testimony and correspondence between people involved in the affair, including someone 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 key witness in the Bezeq case is expected to be Ilan Yeshua, Walla’s chief executive. On Yeshua’s orders, critical stories on the website about the Netanyahus were censored, while fawning stories on Sara Netanyahu that came from the prime minister’s aides were published, sources say. Headlines were allegedly toned down and critical news items were pushed to the website’s margins or removed entirely.

Last week, a former editor in chief of Walla, Yinon Magal, admitted that he was pressured to give favorable coverage to Prime Minister Benjamin Netanyahu and his wife Sara. He said he has not been summoned by police to provide his version, but added that “if I am summoned to testify by the police, I will definitely say what happened there.”

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.

Several 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 there had been new  developments in the investigation, but he declined to elaborate.

Case 4000 initially focused on three main issues. The first was Bezeq's acquisition of satellite television service provider Yes and the corporate governance that led to approval of the billion-shekel purchase ($283 million at current rates). The second was the acquisition by Yes of satellite services from Space-Communications as part of a long-term transaction extending through 2028. The third was the professional relationship between the Communications Ministry and Bezeq, including alleged leaks of working papers by Filber to Bezeq and allegations that Filber concealed the leaks from the professional staff at his ministry.