(Bloomberg) -- Israeli Prime Minister Benjamin Netanyahu was notified Thursday that the attorney general plans to put him on trial for bribery, fraud and breach of trust, following a two-year investigation that has galvanized a serious election challenge and could speed the end of his political career.
The draft indictment, while expected, sent tremors through Israel’s political landscape, coming just 40 days before what’s shaping up to be a closely fought election. It’s the first time a sitting Israeli leader has ever come so near to criminal charges.
Before any indictment is filed, Netanyahu is entitled to a hearing to present his side of the story and try to change Attorney General Avihai Mandelblit’s mind, a process that could take months. The prime minister, who cut short a trip to Moscow in anticipation of Mandelblit’s decision, plans to make a televised statement at 8 p.m. local time.
“You have hurt the image of public service and public faith in it," Mandelblit wrote to Netanyahu in his decision. “You acted amid a conflict of interest, you abused your authority while taking into account other considerations that relate to your personal interests and the interests of your family. You corrupted public servants working under you."
Netanyahu has vehemently denied wrongdoing. After the news broke Thursday, his Likud party called the investigations “political persecution.”
“This one-sided publication of the attorney general’s announcement just a month before the elections, without giving Prime Minister Netanyahu a chance to dispel the empty accusations against him, are a blatant and unprecedented interference in the elections,” Likud spokesman Jonathan Orich said in a statement. “There’s one aim: To overthrow the right-wing government led by Netanyahu and replace it with a left-wing government.”
Crisis Coming?
Mandelblit took pains to note that he hasn’t made a final decision to press charges, pending Netanyahu’s legal hearing. That hearing, he said, “will take place with an open heart and a willing soul.”
Netanyahu has said he won’t step down unless convicted, and legally he can stay in office until the appeals process is exhausted. But if the nation’s top prosecutor believes the case is strong enough to file charges, that may erode the prime minister’s political support to the point where he’s either voted out in April 9 elections or concludes he has no choice but to resign.
“Now for the first time we have a comprehensive, formal, factual foundation, and if anything this might have an effect on public opinion,” said Yohanan Plesner, president of the Israel Democracy Institute. “From a normative and moral and ethical standpoint, the right thing would be for the prime minister to step aside and try to clear his name in the courts.”
Before Mandelblit published his decision, polls showed Likud maintaining its strength and able to put together Israel’s next government with current partners. But they’ve also indicated that a decision to charge the prime minister could potentially swing the balance of power in a tight race against the centrist Blue & White bloc headed by former military chief of staff Benny Gantz and ex-Finance Minister Yair Lapid.
Opponents Surge
A Times of Israel poll released overnight Wednesday showed a draft indictment would cost Netanyahu’s ruling Likud party four projected parliamentary seats -- and, more important, its ability to form a coalition. Support for Blue & White would surge to 44 of parliament’s 120 seats from 36 in previous polls, the survey showed.
Over one-quarter of those planning to vote for Likud said they won’t do so if Mandelblit releases a draft indictment, and its parliamentary representation would fall to 25 seats from 29 projected previously, the poll showed. The online survey of 708 likely voters had a margin of error of 3.7 percentage points.
But Simon Davies, a pollster and political consultant for the company that conducted the survey, warned against jumping to conclusions.
“While the numbers we have tested don’t look good for him at this stage, it’s very difficult to establish beforehand what would happen if people see the prime minister in that situation,” Davies said. “There are examples of the base rallying around indicted figures in countries all over the world.”
The shekel was down 0.1 percent against the dollar at 7:03 p.m. in Tel Aviv. “The political uncertainty stemming from the expected recommendation is weakening the shekel,” said Yonie Fanning, chief economist at ILS Brokers Ltd. The benchmark TA-35 stock index closed up 0.5 percent.
Master Strategist
The prime minister is seeking a fifth term, and if he hangs on, he could become his country’s longest-serving leader later this year. Netanyahu has built his rule on an unmatched skill at political maneuvering, preferring coalitions with nationalist and religious parties when possible, but gravitating toward more moderate alliances when politically expedient.
Supporters admire his articulate and tenacious defense of Israel’s security, and diplomatic achievements that eluded predecessors, including the transfer of the U.S. Embassy to Jerusalem last year.
The investigation began in 2016 and expanded from gifts of cigars and champagne to regulatory decisions that reshaped the country’s communications landscape. Testimony from three former close aides was crucial in building the case against the Israeli leader.
The most explosive case, in which Netanyahu faces a bribery charge, alleges the prime minister promoted regulatory changes to benefit the country’s largest telecommunication company, Bezeq Israeli Telecommunications Ltd., in exchange for sympathetic media coverage from its online news website.
In the other two cases, Mandelblit bucked the recommendations of the state prosecutor’s office and police to charge Netanyahu with bribery, Israeli media reported. Instead, he went with fraud and breach of trust.
Champagne and Cigars
According to the draft indictment, Netanyahu took 478,000 shekels ($132,000) worth of items such as cigars, champagne and jewelry from Hollywood producer Arnon Milchan, helping Milchan with visa and tax issues in return. The gifts and favors were given so frequently “that you can speak of a ‘supply chain’ of cigars and champagne,” Mandelblit says in the draft indictment.
Netanyahu contends these were gifts from friends, and has denied giving any favors in exchange.
In the third case, Netanyahu and the publisher of a major Israeli newspaper discussed passing legislation that would weaken another daily in exchange for more favorable coverage. The plan never came to fruition, and the bill languished in parliament. Netanyahu has said that he and the publisher, Arnon Mozes, were just sounding each other out and he had no intention of carrying out the plan they discussed.
For the past two years Netanyahu has argued that he’s the victim of a political witch hunt by the media, left-wingers and police investigators.
The prime minister had moved up the parliamentary balloting from November, in part to forestall Mandeblit’s decision. He argued that announcing an indictment before the election -- and before his hearing could be completed -- would prejudice voters.
Others said voters deserved to have as much information as possible before the election, and argued that it was Netanyahu’s own decision to advance the vote that dictated Mandelblit’s timing.
Israel in recent years has grown accustomed to seeing its senior officials investigated and even sitting in the dock. Its last four prime ministers have all been probed, and Netanyahu’s immediate predecessor, Ehud Olmert, was sent to jail for bribery, though he stepped down while fighting the charges. Former President Moshe Katsav served five years in prison for rape.
(Adds attorney general quote in fourth paragraph.)
