Why an Early Election Could Be Just What Netanyahu Needs

(Bloomberg) -- Over the course of many months, Israeli prosecutors investigating alleged corruption worked their way into Prime Minister Benjamin Netanyahu’s inner sanctum. Netanyahu’s discomfort became real legal peril when police recommended charging him, threatening his tenure as prime minister, the second longest in Israel’s history. Now, with his governing coalition teetering, Netanyahu faces a decision of whether he’d be better off facing the electorate before his term expires in November 2019, that is, before Israel’s attorney general decides whether to indict him.

1. What is Netanyahu accused of doing?

Israeli police in February recommended charging him with bribery, fraud and breach of trust for allegedly trading his influence for favors in two separate cases. Attorney General Avihai Mandelblit, who must decide whether to file charges against a sitting Israeli prime minister for the first time, is now evaluating the police file, a process that could take many more months. Netanyahu has denied wrongdoing.

2. What are the cases?

Police estimate Netanyahu received gifts worth about 1 million shekels ($270,000), including champagne, cigars, and jewelry, from Australian businessman James Packer and billionaire Arnon Milchan, the Hollywood producer of films such as “Fight Club” and “The Big Short.” In exchange, police say Netanyahu sought to advance Milchan’s interests in various fields including telecommunications and tax law, and by helping with his U.S. visa. Netanyahu says Milchan is simply a friend who gave him gifts and denies any quid pro quo. In the second case, Netanyahu is accused of conspiring with the owner of Israel’s Yedioth Ahronoth newspaper to undermine Israel Hayom, a competing free daily backed by U.S. casino billionaire Sheldon Adelson, chairman and majority owner of Las Vegas Sands Corp.

3. Is there anything else?

Police are still compiling evidence in a third case involving Israel’s largest telecommunications company, Bezeq. Netanyahu is suspected of advancing the business interests of the company’s controlling shareholder, a long-time friend, in exchange for favorable media coverage on a Bezeq-owned news site. Netanyahu has denied wrongdoing in that case as well.

4. How strong is the evidence against Netanyahu?

That remains to be seen, of course. Police say they’ve interviewed numerous witnesses around the world in more than a year of investigations. Prosecutors have secured the cooperation of three former Netanyahu aides, including his former chief of staff, Ari Harow, who agreed to a plea bargain after police recommended he be tried for bribery, fraud and money laundering in a separate case. It’s worth noting that in many instances — including two previous investigations of Netanyahu where police also recommended he be charged — attorneys general concluded the evidence wouldn’t stand up in court, and closed the cases.

5. What has Netanyahu said about the investigations?

He has repeatedly described them as a witch hunt waged by left-wing political opponents. Netanyahu called the police recommendations to charge him “unfounded” and said a prime minister who devoted his life to serving the nation wouldn’t sell it out for cigars. He has consistently portrayed the investigation as a political ploy intended to replace his conservative government with a more liberal one. That line of argument intensified after it emerged that testimony from Yesh Atid Party leader Yair Lapid, Netanyahu’s former finance minister and now his leading rival, was key in building the police case about Netanyahu’s alleged favors to Milchan.

6. Why is Netanyahu’s coalition government wobbly?

Protesting an Israeli truce with the militant Palestinian group Hamas, which controls the Gaza Strip, Defense Minister Avigdor Liberman resigned and pulled his Yisrael Beitenu party out of the government Nov. 14. That left Netanyahu with a razor-thin parliamentary majority. The Jewish Home party said it would quit as well unless its leader, Education Minister Naftali Bennett, was given the defense portfolio, but it was not clear Netanyahu would agree. There’s a chance Netanyahu himself will call new elections. Polls have shown he’d win such a contest, though he faces heavy criticism from some residents of southern Israel for accepting the truce with Hamas after it bombarded them with rocket fire. While a fresh mandate from voters wouldn’t grant Netanyahu immunity from prosecution, some commentators think it might discourage prosecutors from pressing charges.

7. What happens if he’s indicted?

Netanyahu, whose 11 years in office make him Israel’s longest-serving prime minister after founding father David Ben-Gurion, wouldn’t be legally obligated to resign. An indictment could prompt more partners in his coalition to quit, forcing new elections. If the coalition endured, the next question would be whether Netanyahu could manage to stay in office while on trial. With his term ending in late 2019, the issue may be moot because of the time it would take the case to reach court.

8. Who are the aspirants to the top job?

Polls show Lapid and Finance Minister Moshe Kahlon of the Kulanu party as the most popular contenders. Avi Gabbay, chairman of the opposition Labor party, would run for office, as could Liberman, Bennett and Israel Katz, minister of intelligence and transportation from Netanyahu’s Likud party.

9. How unusual is an investigation of a prime minister?

Netanyahu’s predecessor, Ehud Olmert, was indicted on corruption charges after leaving office in 2009, acquitted on the most serious charges in 2012, convicted on other charges in 2014 and entered prison only in 2016 (he was released in 2017). Other investigations, of former Prime Ministers Ehud Barak and Ariel Sharon, continued for years without resulting in charges against them.

The Reference Shelf

• Israeli journalist Ben Caspit’s book, “The Netanyahu Years.”
• The New Yorker assessed the catalog of corruption allegations against Netanyahu.
• QuickTake explainers on the Bezeq investigation, U.S.-Israel relations and the two-state solution.
• Labor’s new leader also has a Bezeq connection.

To contact the reporters on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net;David Wainer in Tel Aviv at dwainer3@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Lisa Beyer, Michael S. Arnold

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