The war over Case 4000 and the probe that could bring down Netanyahu

When history looks back on the end of the era of Prime Minister Benjamin Netanyahu, Case 4000 – referred to as the “Bezeq-Walla Affair” – will likely be seen as what essentially brought him down.

After years of The Jerusalem Post reporting from top sources on both the prosecution and defense sides of the Netanyahu corruption probes, the tipping point is clearly Case 4000.

With regards to Case 1000 (“the Illegal Gifts Affair”), Case 2000 (“the Yediot Aharonot-Israel Hayom Affair”) and Case 3000 (“the Submarine Affair”), the Post had reported that Attorney-General Avichai Mandelblit had misgivings when they stood without Case 4000.

Until Case 4000 came around, which led former top Netanyahu aides Shlomo Filber and Nir Hefetz to turn against their ex-boss and becoming state’s witnesses, Mandelblit viewed each case as missing something and being too highly questionable to lead to a toppling of the government.

But with the arrival of Case 4000, Hefetz provided crucial details that likely moved Mandelblit toward an indictment in Case 1000 and may have also moved him toward and indictment in Case 2000 – though the picture there is still less clear and there appears to be internal feuding within the prosecution.

Case 3000 engulfed many top Netanyahu aides, but to date, the prime minister has avoided being considered a suspect.

But with Case 4000, the Post reported for the first time in June that Mandelblit viewed as a bullet that Netanyahu finally could not dodge and as involving such substantial bribery that it could warrant toppling a government.

The Post also reported at the time that Mandelblit might seek a deal with Netanyahu to resign or decline to run for reelection as part of a deal to close the cases and let him retire with dignity.

Since then there have been hints that at least some of Netanyahu’s lawyers might be in favor of such a deal, which may explain why Netanyahu wanted to push off elections that would bring his expiration date much closer.

Because of Case 4000’s importance regarding his legal fate and because the police and the prosecution are both nearing a range of decisions, the war over the case’s presentation went into overdrive this week. Reports on Channel 10 on Sunday, Monday and Tuesday night led Netanyahu to issue his most comprehensive narrative to date, which appears to be the outlines of a full trial defense plan.

THERE ARE two premises to Case 4000 against Netanyahu.

The first premise is that Netanyahu fired Communications Ministry director-general Avi Berger and hired his loyalist and ex-campaign manager Filber in order to ensure a government policy improperly favored Bezeq owner Shaul Elovitch.

The second premise is that in exchange for the positive treatment to Bezeq, Netanyahu and his wife, Sara, directed Bezeq’s online news site Walla to give him favorable coverage. This was arranged through Elovitch, his wife, Hefetz, and some of Elovitch’s top Walla employees.

If true, this would constitute bribery as Netanyahu worked to set government policies that would increase monetary profits for Elovitch in exchange for positive media coverage.
Netanyahu’s statement this week attacked the heart of this theory.

It said that the favorable government policy that Filber approved as head of the Communications Ministry – the approval of a merger between Bezeq and Yes, which is another company that Elovitch had ownership rights in – was approved by apolitical experts. These experts included a senior official at the Antitrust Authority and the legal adviser to the Communications Ministry.

If these apolitical officials approved the merger, even if the merger did end up leading to a windfall of between NIS 680 million to NIS 1 billion for Elovitch (depending on measuring direct versus indirect profit), sources close to Netanyahu ask: How could the merger be illegal?

Likewise, the Netanyahu side adds, with these apolitical approvals, it does not matter whether Filber was a loyalist to the prime minister as he was not able to act alone.
On the other hand, those in favor of indicting the prime minister would stress that Filber, as head of the ministry, could have unduly influenced and twisted the arms of less senior apolitical officials on the issue and also actively campaigned for Elovitch on all issues.

More importantly, they would argue that even if the merger was approved by apolitical officials, the critical issue with the deal was the inflated price that Bezeq paid to Yes – a massive chunk of which went into Elovitch’s pocket.

They would say that the inflated price was exacerbated by Filber weakening the strict “Chinese wall” – a series of legal requirements to keep decisions and communications between Bezeq and Yes separate – in light of Elovitch’s ownership interests in both.

But the opposing side could then in turn argue the pricing and the Chinese wall was not directly connected to the Communications Ministry and was a separate issue for those companies to deal with.

The response would be that Filber crossed standard boundaries to back the Bezeq-Yes merger in unusual ways. Sources say he sent letters to help the deal in the middle of the night, which apolitical ministry officials did not get to vet, and that ministry policy documents that he handled came back with annotated edits from Bezeq, which would be clearly illegal.
Regarding Berger’s firing, Netanyahu’s statement said that he was not fired by the prime minister until the start of a new coalition when heads of several ministries were and are routinely replaced, implying the move was apolitical.

In addition, Netanyahu’s statement contended that many anti-Bezeq reforms took place with him and Filber at the helm.

Sources of the pro-indictment view fight this claim by saying that had Netanyahu fired Berger only one month after taking over the Communications Ministry or in the run up to the 2015 elections, it would have been too blatant.

Rather, firing Berger as soon as the new coalition took power was still a swift firing and removal of the main obstacle to helping Elovitch get the Bezeq-Yes merger approved. They therefore say that waiting a few months does not make the firing kosher as much as it shows the prime minister wanted a tiny bit of cover.

This cover further falls by the wayside, say sources, when considering that Filber, Netanyahu’s replacement for Berger, had no experience or expertise in the area, and was not considered competent for the task by most ministry employees.

Regarding Communication Ministry approvals of reforms while Netanyahu was the communications minister that could be said to have harmed Bezeq, sources critiquing the prime minister would break down the question into two issues.

One set of reforms, the wholesale market reform, they would say started under the previous communications minister, Gilad Erdan, and was basically locked into place before Netanyahu and Filber even entered the picture. In other words, Netanyahu and Filber simply could not stop it.

Sources further indicate that Filber had even complained about being unable to stop that reform.

In relation to the second set of reforms deemed to be negative for Bezeq – in which Internet service providers were allowed to put their own fiber cables into Bezeq’s already-dug ducts in order to provide telecommunications services – Filber is said to have frozen them. This reform was important, say Netanyahu’s accusers, because allowing competitors to use Bezeq’s already-dug holes threatened Bezeq’s natural monopoly in a much more fundamental way than any other reform.

In that light, they say that Filber, on behalf of Netanyahu, showed his true unmitigated pro-Bezeq colors whenever anything that really mattered came forward.

However, the opposing side argues that a High Court of Justice petition, which Elovitch filed against Netanyahu’s reforms, showed that the two were not coordinated on policies that damaged Bezeq. They would also note that Filber sent out a long range of public tweets bragging about actions he took to undermine Bezeq.

Pro-indictment sources would say that when Filber heard that the High Court had rejected Elovitch’s petition and was letting the anti-Bezeq monopoly reforms go forward, that he was inexplicably upset. This was true even though nominally it meant that his ministry’s position had “won.”

They add that his tweets were light cover for a blatantly pro-Bezeq pattern of action.

MOVING ON, Netanyahu’s statement attacked the heart of the second prong necessary to make out a bribery case against him in Case 4000: the idea that he obtained positive media coverage from the Elovitch-owned Walla in exchange for his assisting Elovitch in the business sphere.

The statement said that Walla historically and currently has been demonstrably hostile to Netanyahu.

It further contended that the long-line of Walla employees who have claimed that there was interference on the prime minister’s behalf by Elovitch, Elovitch’s wife, Sara Netanyahu, Hefetz and others displayed the employees’ anger at attempts at balanced coverage and merely shows their anti-Netanyahu bias.

But the biggest argument that sources close to Netanyahu made to the Post was that the merger between Bezeq and Yes occurred in June 2015, following the election in March 2015 that Walla had covered with relative hostility toward Netanyahu.

Put differently, sources say that the most critical time Netanyahu would have wanted to arm-twist for positive coverage would have been leading up to the March 2015 elections, at which point they say he received negative coverage instead. After that negative coverage, what would Netanyahu owe Elovitch? And in any event, they say, a corrupt official would no longer need to try to control Walla reports three months after being reelected. So what would be the reason to act improperly to improve a merger for Elovitch at that point?

Finally, they say that any campaigning by Sara Netanyahu, Hefetz or anyone else for “more balanced coverage” is a part of the game that Yesh Atid leader Yair Lapid and then-Zionist Union leader Isaac Herzog played just as hard as the prime minister.

Those responding would say that the Channel 10 Makor program on Monday night, and some past similar reports, have been so detailed and comprehensive about unprecedented interference by Netanyahu, Elovitch and those acting on their behalf, that the case is open and shut.

They would say that some negative articles about Netanyahu do not explain away problematic interventions and conduct in other instances.

A review of the instances in which it is claimed that there was an illegal Netanyahu-Elovitch intervention reveals that accusations date back to before the 2015 election, but that most of the notable examples came afterwards.

Those accusing the pair would say that the fact that the prime minister could have acted more aggressively and corruptly leading up to the 2015 elections, does not excuse him for doing so afterwards.

They would note that the combination of claims from top Walla officials – like CEO Ilan Yeshua, editor Avi Alkalai, various reporters, and Hefetz himself, now that he turned state’s witness – who all point fingers at Netanyahu and Elovitch, are a damning combination for the two.

About Hefetz’s testimony, sources close to Netanyahu would say that he is lying to try to save his skin for alleged illegal conduct he undertook independently of the prime minister. They would add that in any event, neither Hefetz nor anyone else can connect Walla coverage directly to a deal between Bezeq and Yes.

The only person who could make such a connection would be Elovitch who, while he has admitted to slanting coverage toward Netanyahu out of a general sense of wanting to be in the prime minister’s good graces, has denied any bribery or scheme between the two.   
 
Those accusing Netanyahu would say that between Filber’s testimony finger regarding the Bezeq-Yes merger and Hefetz’s testimony regarding Walla, Netanyahu simply has too much explaining to do and his alibis – while not inconsequential – are inadequate when you break them down.

At a certain point though, the debate becomes academic. Throughout years of investigations against Netanyahu, the police had become convinced of his guilt and some in the prosecution were as well, but Mandelblit was not. This was true even when former Netanyahu top aide Ari Harrow became a state’s witness, which the Post correctly reported, unlike most of the media at the time. However, with Case 4000, Filber, Hefetz and the new evidence that came out from their turning on Netanyahu, Mandelblit may now be willing to take down the government on the basis of media bribery.

Sara Netanyahu did not take a plea deal offered to her by Mandelblit to avoid a public trial on separate corruption issues when her lawyers disagreed on the issue. While Netanyahu family lawyer Jacob Weinroth passed away recently, he and Amit Hadad, who still represents the prime minister, reportedly were both in favor of a plea deal to salvage his dignity – which could mean a surprise declining to run for reelection in November or a resignation not long after winning reelection.

The real remaining question is likely whether Sara’s husband will cut the deal that she passed up or whether the prime minister will conclude his long public career in a legendary court legal fight like his predecessor Ehud Olmert.

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