Special Report: Netanyahu didn't disclose 'full list' of conflicts of interest

State Comptroller’s report claims Netanyahu failed to disclose full details about possible conflicts of interest.

By YONAH JEREMY BOB
Updated: JULY 13, 2017 00:17
PM Benjamin Netanyahu (photo credit: REUTERS)
PM Benjamin Netanyahu
(photo credit: REUTERS)
Prime Minister Benjamin Netanyahu and the Communications Ministry “did not disclose to the attorney-general the full list” of his conflicts of interest connected to Bezeq and Walla’s owner when requested, the State Comptroller’s Office said in a report on Wednesday.
Businessman Shaul Elovitch is the controlling shareholder of Yes, Bezeq, Pelephone, Bezeq International, Halal Communications and Walla and has been a close friend of Netanyahu, who held all aspects of the Communications Minister portfolio until June 2016.
Multiple rounds of review of the prime minister’s possible conflicts of interest by Attorney- General Avichai Mandelblit from June 2016-onward gradually reduced his powers as communications minister until he fully relinquished the portfolio in February 2017.
This reviews came after media reports in late 2015 that Netanyahu had failed to disclose his ties to Elovitch.
Further, the revelations in Wednesday’s State Comptroller’s Report – that aspects of Netanyahu’s conflicts of interest as communications minister and as a friend of Elovitch were not disclosed to Mandelblit even in June 2016 – come as Elovitch is under criminal investigation for allegedly violating conflict- of-interest principles in a transaction between two of his companies: Bezeq and Yes.
Moreover, the report said the Prime Minister’s Office “did not deny that discussions between the prime minister and Elovitch may have touched on issues that the prime minister was involved in his capacity as communications minister.”
According to State Comptroller Joseph Shapira’s report, the Communications Ministry put together a list of 12 issues where the Netanyahu- Elovitch conflict could be problematic on a policy level.
Aspects of this list were not provided to Mandelblit when he permitted Netanyahu to continue as communications minister in June 2016, provided the prime minister refrained from involvement in certain issues.
In other words, Shapira said Mandelblit’s list of issues was incomplete, and the attorney-general might have directed Netanyahu to entirely give up the Communications Ministry in June 2016 had he seen the full list.
In fact, neither the ministry nor the prime minister provided this full list to the comptroller in August 2016 when responding to Shapira’s request for information.
The report does not reveal how the State Comptroller’s Office acquired the list, only stating that it acquired it over the course of its review of the issue from mid-2016 to June 2017.
But a spokesman for the comptroller clarified that there was no point at which the Communications Ministry or the Prime Minister’s Office voluntary provided the information, and that it was acquired via inspections performed by the comptroller’s staff as authorized by law.
Moreover, he comptroller questioned whether aspects of the government’s coalition agreement needed to be reexamined for conflict of interest issues, since Netanyahu’s role as communications minister was part of the deal.
In addition, the report stated that Mandelblit’s office did not disclose all issues in his June 2016 public announcement that he was directing Netanyahu to refrain from involvement in Elovitch-related decisions.
Out of the public eye, the Attorney-General’s Office reviewed whether it should investigate major Elovitch-related policy decisions that Netanyahu had already made which may have involved a conflict of interest.
This review – along with its eventual “decision not to revisit” Netanyahu’s “past conflicted decisions” and its reasoning for refraining from revisiting them – “were not revealed to the public” in June 2016, indeed, not until Shapira’s report disclosed the issue on Wednesday.
Mandelblit’s office explained that since no one had raised a specific alleged violation and that “the issue in question was just the concept of avoiding conflicts” as a matter of good governance, “there was insufficient justification to warrant” the exceptional measure of revising past decisions.
Shapira disagreed, stating, “The public’s faith requires that the results of a review be brought to the knowledge of the public. A situation where the public does not know that the Justice Ministry is reviewing the consequences of past decisions implicating conflicts of interest... could cause harm to the public’s faith.”
He also wrote that Mandelblit’s office should have dug deeper into what was said in conversations between Netanyahu and Elovitch.
Elovitch, meanwhile has denied that the two men discussed policy issues related to a conflict of interest.
The comptroller also questioned whether Communications Ministry director-general Shlomo Filber should not have had Elovitch-related policy decisions removed from his authority.
While not questioning Filber’s qualifications, Shapira wrote that Filber’s status as the Likud campaign chairman in the 2015 election, and as a key Netanyahu aide in earlier years, meant that his appointment in the ministry was a close political appointment.
Shapira expressed criticism that the attorney-general did not review or impose conflict- of-interest parameters on Filber, and called for a standardization of criteria to apply in any future similar situation.
Also on Wednesday, the Israel Securities Authority questioned Filber as part of the Elovitch probe.
The ISA said Filber was questioned “on suspicions of committing integrity and securities offenses,” while Hebrew media reported that the director-general is suspected of giving favorable treatment to Bezeq.
The State Comptroller’s Report also touches on the Communication Ministry’s failure to move forward with a range of reforms meant to encourage Internet and telecommunications competition to lower price and improve service quality.
Decisions from 2015 or earlier directing Bezeq to permit competitors to fully use its infrastructure – or to partially piggyback off its infrastructure by permitting competitors to insert wires into its pipes – were either partially implemented or not implemented at all, said the report.
The same was true regarding the reform of directing Bezeq to sell some of its fixed telephone landlines.
Another reform that was opposed by many in the professional level of the Communications Ministry, but pushed by Filber, was loosening limits on how Bezeq, and therefore potentially Elovitch, could meld together the economic power of Bezeq and its subsidiaries.
Until now, Bezeq, and its subsidiaries such as the Yes satellite television provider, were under the same ownership.
But Elovitch, as controlling shareholder, and other shareholders, could not mix assets or share certain information.
It is unclear what will happen with this reform, especially in light of the current probe against Elovitch for allegedly violating conflicts principles in a merger and other related transactions between Bezeq and Yes.
The report also said that the Communications Ministry’s negotiations with Bezeq regarding this reform were questionable in failing to keep records of discussions, failing to check Bezeq’s presented economic calculations and in the suspicious timing of approving the merger.
The report quoted the Prime Minister’s Office as saying “We completely reject the conclusions of the state comptroller,” but declining to address specific issues, adding that the main criticized party was the Communications Ministry.
A spokesman for the prime minister categorized the comptroller’s criticism as just one more of many attempts to create the appearance of a scandal around Netanyahu.
The statement said that Netanyahu acted in line with Mandelblit’s instructions regarding any conflicts of interest.
While the Communications Ministry indicated it would respond to Jerusalem Post inquiries, none was received by press time.
Eliyahu Kamisher contributed to this report.