Pod Save the World - Bribes, Bibi and the future of Israel

Episode Date: February 23, 2018

Tommy talks with Nathan Guttman, the Washington bureau chief of The Forward, about the corruption scandals swirling around Israeli Prime Minister Bibi Netanyahu. They walk through the facts, what happens next, and what it means for US/Israeli relations and the Middle East peace process.

Today's potty of the world is about a major investigation that could bring down a divisive head of state. Prosecutors are investigating dirty politics, bribery, fraud, and breach of trust. The investigation is spilled out into the press and is highly partisan. Some call it fake news. One lawmaker even called the prosecutor's office a stable that's full of crap. Others have called for resignations on both sides. I am, of course, talking about Israel and the corruption investigations swirling around Prime Minister BB Netanyahu. The story is more bizarre than you think.

The implications are huge and the parallels to what is happening in the U.S. President Trump are everywhere. Stick with me on this one. It is worth it. The interview is coming now. My guest today on POTSave the World is Natan Gutman. He's the Washington Bureau Chief of the Forward. He joined the staff there in 2006 after serving for five years as a Washington correspondent for the Israeli dailies, Haretz and the Jerusalem Post. Natan, thank you so much for being here on Potsave the World. Oh, thanks for having me. I'm very excited to talk to you today about Prime Minister Netanyahu and what the hell is going on in Israel. But I was sort of hoping we could start with the facts because there are so many stories swirling out about corruption allegations around the prime minister that is actually hard for me to keep track.

So I was hoping maybe we could start by quickly walking through them one by one. The first is referred to in the news as case 1,000. It involves Netanyahu receiving hundreds of thousands of dollars worth of gifts like champagne and jewelry from a wealthy businessman. What happened there? What are the implications? Right. Yeah. The Israeli police made things easier for us because they just numbered each one of the cases.

So we have 1,000, 2,000, 3,000, 4,000. So the first one is 1,000. That may be the easiest case to understand. For about 10 years, Bibi Netanyahu and his wife, Sarah, received gifts from a Hollywood producer named Arnon Milchen. He's pretty well known in Hollywood. He produced films like Pretty Woman. And he's a former Israeli who spends most of his time in the United States. States. And it's very close to Netanyahu and to other Israeli leaders. And apparently the

Netanyahu's have a liking for the better kind of life. Sarah Netanyahu likes pink champagne, BB Netanyahu likes expensive cigars. Don't we all? And it's hard to get by with that. With a government salary, it's hard to come across these things. And so they reached out to Arnon Milchen and it started off as gifts, but it became a whole industry. And according to the police, by the end of these 10 years, it reached a value about $300,000 of gifts that Milchen gave the Netanyahu's. And it's even hard to call it gifts

because they asked for it. They would just let him know or let the driver know when they needed more champagne or cigars. There was also jewelry in there. So that's the Netanyahu side of it. What did Milchan get in return, allegedly, we should say,

this is even more complicated because Arnold Milchen is a film producer, but he also kind of moonlighted as an Israeli agent helping out Israel with its nuclear program, him getting all kind of clandestine information. And he was kind of helping out the Israelis. But the problem is that he couldn't keep his mouth shot. And when he talked about it in interviews, American immigration authorities looked into it. And when it was time to renew his visa, they said, well, we're not really sure that we want to give this guy a visa because this is what he's doing in the United States.

he lost his visa to the United States. And that's where Bibi Netanyahu's friend could help by speaking to American officials, even as high as Secretary Kerry and the American ambassador in Israel. So that's one of the things. There are also other business issues that Bibi Netanyahu tried to help Milchen out with, like a tax break if he comes back to Israel, so he won't have to pay taxes on all the fortune that he made in America and other issues like that. Wow.

So that's even more shocking than I thought. Case 2000 alleged that Netanyahu tried to strike a deal with Israel's second largest newspaper to get more favorable coverage. What happened there? What's the quid pro quo in this instance? So for Bibby Netanyahu, it's simple. He wants to get good press. Doesn't everyone want to get good press. Right.

And Yidot Ahunot is the largest paper, the most influential newspaper in Israel. And their line, while they're centrist in a political sense, they don't really live. like Netanyahu. So they were pretty critical of him and he wanted to correct that situation. He had something to give, Yidiot Ahonaut, because Yidiot Ahonaut is facing its own problem since there's a competitor. The competitor is called Israel Hayom. It's a right-wing pro-Beebbyn newspaper, and it's funded fully by Sheldon Adelson, who you know well, the famous Las Vegas Republican mega-donor. So here's the deal that was discussed and conveniently, even recorded by one of the participants who later gave these recordings to the police.

Basically, Netanyahu told the publisher of Yidiot Achronot, Nonimosis, he came to him and said, you know, I can talk to Sheldon Adelson, the owner of Israelayom, and make sure that he limits the circulation of his paper. Should mention, by the way, that Israel Day is circulated for free. That's why it's such a strong newspaper. Now, what if I get Sheldon to limit the, the... the circulation of Israel Hayom and help your business, would I get in return better coverage? To which Noni Moses replied, sure, of course, we can cut a deal like that.

Now, these talks never led to a deal for one reason or another, but basically there were enough for the police to recommend charging Netanyahu and Moses, the publisher, on bribery charges. My God. And then so confusingly, there's another case where Netanyahu's aides are accused of trading favorable treatment of a big telecon company for favorable treatment from its news website. That's distinct, right? Is this one also a problem for BB? Oh, definitely it is. So now we're leaping to case 4,000. Oh, my God, sorry.

Let's leave 3,000 on the side for a second. It has to do with submarines, and it's very exciting. It says. 4,000 has to do with Bibi Netanyahu, again, wanting to receive better coverage from a very popular news website. in Israel called Wala. And it is owned by a wealthy businessman named Shaul Alovich, who is also the owner of Bezik, Israel's largest telecommunications company. In this case, 4,000, which is still under investigation, we didn't see police recommendations on this case as of now.

Again, Alovich needed all kinds of regulatory benefits from the government, Netanyahu, who conveniently is not only the prime minister, but also the minister of communication. He insisted on holding that portfolio. It was in a position to give him these regulatory breaks that would help his business immensely. And in return, Wala became this very pro-Netaniahu, and even more important, very pro-Sahanao website. At one point, this recording came out,

and again, as you can already see, everything in Israel apparently is recorded. This recording came out of Sara Netanyahu, the prime minister's wife, screaming, at a media consultant because she didn't like the type of coverage she was getting in Walla. And her problem was or her issue was that they forgot to mention there that she is a psychologist with a master's degree. Okay. That's confusing. So, and we should know that this case is still under investigation.

Right. And as of this week, the police investigators managed to flip one of BB's highest ranking aides who was. was also the Director General of the Communications Ministry, and a person considered very close to Netanyahu, he is now cooperating. And according at least the press reports in Israel, he knows everything about what BB did and is willing to talk. So what's Case 3,000 then? Submarines? Case 3,000. Yeah, I hope you're keeping track, right? I am. Case 3,000 has to do with submarines. And it's very complicated, and it probably won't lead to an indictment. But in short, it has to do with the question, how many submarines does Israel need?

Netanyahu apparently overruled the decision of the military and decided that Israel should purchase more submarines, as it did, and it purchases them from shipyard in Germany. The thing is that the person in brokering this deal is Netanyahu's personal lawyer who is also a relative of him, which raises the question, does Israel really need all these submarines? means, or is Netanyahu pushing for this deal because his lawyer and relative is getting a cut off of this deal? This, again, is under investigation. Most people think this will not end in an indictment. And then on top of all of this, Netanyahu's wife, who you mentioned earlier, is being questioned by Israeli police over allegations that she's been using public funds for

private expenses and compounding that problem. Former Netanyahu family advisor allegedly passed a message to the prosecutor in that case, suggesting that she dropped. the charges against Mrs. Netanyahu in exchange for being named Attorney General. So that also sounds like a pretty big deal. Right. And part of the reasons that we're hearing all these cases come out now is because there's a sense in Israel that Netanyahu is vulnerable right now. So all kind of AIDS and people who were involved and people who knew him for years but were afraid to talk are now coming out with these stories. So the story about this quid pro quo that you mentioned, let's dismiss the Sarah Netanyahu case.

and in return will appoint you Attorney General. This happened already two years ago, but we're only learning about it now. Wow. Okay. So that is a lot of corruption, or at least allegations of corruption. Yes, alleged corruption for assistance at one time. But it's hardly the first corruption scandal in Israel, right? 2008, Prime Minister Omerit resigned a week after police recommended he be charged with fraud, bribery, obstruction of justice.

He later served, I think, 16 months in prison. Netanyahu himself dealt with corruption allegations back in the late 90s. Does this mean that Israelis are more prepared for these types of allegations? And what is the response like in Israel to what people are reading? I think the response basically breaks down along party lines. And it has to do a lot with the fact that these investigations are going on for a few years already. And that Netanyahu has been working to, in a sense, discredit the investigations, discredit the police, discredit the attorney general in order to make.

the case that this is all a political witch hunt. And everything that I'll say from now on, you can replace Netanyahu for Trump. It sounds exactly the same. So basically, he's saying, you know, they couldn't beat me at the ballots. I'm prime minister, almost the longest serving prime minister Israel ever had. I just won my fourth election. And since they can't beat me fair and square, they're going after all these tiny things, insignificant matters, whether I got a cigar or didn't get a cigar, whether I did this guy a favor or not. So basically, it breaks down along party lines. If you're a supporter of Netanyahu, a support of the Likud, you're willing to buy that story.

Otherwise, Israelis are kind of shocked, kind of disgusted by the information that's coming out and how severe it is. Public opinion polls show that Israelis don't believe Netanyahu on this case. However, politically, he somehow seems to still be pretty strong. You mentioned Sheld Nadelson earlier. You wrote a piece recently staying that it didn't go unnoticed in Israel that Adelson hasn't come out and publicly supported Netanyahu since the Israeli police made this announcement earlier in the month. Can you talk a little bit more about Sheldon Adelson? What's his influence like in Israel? And do you think this is a sign that Netanyahu is in bigger trouble this time than in the past?

Well, I think, first of all, Sheldon Adelson is in a difficult position right now with Bibi Netanyahu. because on the one hand, he likes Netanyahu. He supported him. He definitely believes in his ideology. On the other hand, Netanyahu basically took Adelson for granted and tried to use him as a bargaining chip against the other newspaper without even telling Sheldon Adelson. So definitely Adelson is hurt by Bibi Netanyahu's behavior and rightly so. How influential is he? In Israel, we have a different campaign financing system. So the idea that big donors have direct influence doesn't really matter that much in the Israeli political system because we're not talking about multi-million dollar campaigns and everything is regulated. However, Allison, mainly through this newspaper that he started,

managed to be Bibi Netanyahu's biggest supporter because that was the way to the Israeli public by owning one of Israel's largest newspapers, daily newspapers, and by making sure that its editorial line is very pro-Nitania, he became a very valuable asset for Netanyahu. And I'm not sure that will continue now. There's a lot of talk about Adelson looking beyond BB. He understands he either wants BB to leave or understands that he's not going to be there forever, and he's looking for some other political figure that he can support,

but probably right-wing leader of Tali Bennett. Right. Another Bibi ally who's had a little friction with him lately is Donald Trump. The White House publicly and pretty harshly rebuked Netanyahu's claim that he had discussed a plan to annex the West Bank with the White House. What is that plan? Why is this important? And why was the subsequent rebuke so significant in this case?

Well, to understand that we have to look at B.B. Netanyahu's coalition right now. In Israel, of course, after you win the election, it's a parliamentary system. You have to build your own coalition. And even if Netanyahu has 30 seats with Al-Iqud, he still needs another 31 seats to get a majority. The current coalition of Netanyahu goes to the right. He's probably the most centrist figure in it. Everyone else is to the right of him. And in order to satisfy this coalition, Netanyahu has to give them some red meat once in a while.

And this is a pro-settler coalition. And what they would like to see is to use what they understand as an opportunity now, a unique opportunity because the White House is occupied by someone who either doesn't care about the settlement or believes the Likud's position, Israel's position on it, and maybe more open for some type of annexation, partial or complete annexation of the West Bank. And that's why the right-wing partners in Netanyahu's coalition are pushing for that. Now, Netanyahu is in this balancing act. On the one hand, he wants to satisfy them. On the other hand, he understands that he can't push the Americans too far. And he probably miscalculated with this statement. He was trying to, in a way, appease his partners by telling them, okay, I spoke to the Americans

and kind of hinted that the Trump administration is open to this idea of partial annexation. And that was a bit too much even for the Trump White House. And that's why we saw this public rebuke. So you talked about how Israel is a different system. their parliamentary system, that means there are more immediate and different ways of holding leaders accountable, right? I mean, can you talk a little bit about how the Israeli government works and is formed? And do you think it's significant that you're starting to see members of Netanyahu's party, the like who'd call for him to step aside? And you're seeing leaders of more centrist parties

calling for no confidence votes and other measures? Of course, in a coalition system, especially with a multi-party system like it is in Israel, where Netanyahu's coalition is built up of seven different factions. Each one of them can decide at a certain point to break off. And since he has a very small majority, he will basically lose his majority. There'll be a vote of no confidence. And he will lose the premiership in Israel will go to general elections. So members of the coalition always have this ability to hold the prime minister accountable and to try to exert whatever benefits they can for their party from him. That's why we can see in small parties like ultra-Orthodox parties. They have maybe only five or six seats, but they do have the power to leverage.

They're standing there by threatening to leave the government if they don't get their specific needs answered. And that's what we're seeing right now. So Netanyahu's smaller problem right now is the police investigation and the possibility that maybe a year from now, he will end up in jail that may or may not happen. What could happen before that is that his coalition partners will say, well, enough is enough. we can't sit in the government with someone who is basically tainting us by actually being partners with him. This crossed the red line and therefore we're leaving the government or forcing him to resign and go to new elections. Right now we're not seeing any direct call that way, but it could happen. It could happen if we learn more damning information about these cases.

It could happen once the Attorney General, who is now reviewing these recommendations, will actually, go ahead and indict, Netanyahu, at least on cases 1,000 and 2,000. And it could also happen if any one of the coalition partners decides that maybe now is an opportune time to go to elections because they have a chance of improving their standing, any one of these scenarios can lead to elections. Right. I mean, a million lifetimes ago, before the 2016 election, there were serious concerns that Donald Trump would question the legitimacy of our entire electoral system and and not accept defeat. In hindsight, that is too ironic to even handle. But you're seeing similar reports coming out of Israel now. They're concerned that Netanyahu will attack lawmakers,

question the system, and sort of burn the place to the ground rather than go quietly. Are those fears grounded in fact, or is this just alarmist reporting? I think a lot of it is alarmist, but clearly there is an attempt by Netanyahu at least to question the honesty, the integrity of the law enforcement system in Israel. these types of investigations are carried out by the police. He's already laying the ground for questioning the attorney general once he makes a decision. So definitely he's not going to leave quietly. He's not going to go out in a peaceful way.

In a sense, like Ehud Olmer, who you mentioned, him did. And by the time all this is over, we may have a very politicized legal system and law enforcement system in Israel, because Netanya will basically be saying to his supporters, you should believe me, not the Attorney General. Believe me, not the police. Don't trust them. They're biased against me. Interesting thing is, of course, that he himself appointed the Attorney General and the Chief of Police, and both of them were considered very pro-Natanyahu appointments when he chose them, but apparently even they have their own integrity to think of, and that's why he's facing this situation right now. The parallels to what's happening in the U.S. are striking.

I mean, you have these ongoing investigations, you have the polarization and partisanship, sort of infecting all levels of how it's reported the way we're attacking prosecutors. Is that because the systems are alike, or do you think that's because Bibi was Trump before Trump was Trump? I think it has to do with the personalities of the two leaders that are similar in a certain way and in the way they understand their ability to manipulate the public opinion and the media. I think both of them kind of tapped into this idea that turning everything into personal will help them out in the long run. They believe that they have a strong core support base that will be with them if they'll only give them the right messaging.

And if giving them the right messaging means discrediting in democratic institutions, so be it. And that's why we see it all the time. it's also very similar in the techniques we use. We see Netanyahu now more active on Twitter and on Facebook. He's basically ignoring the media and putting out daily statements, daily video statements on Facebook, reaching beyond the heads of the media, which is very similar to what Donald Trump is doing. Everyone's learning from Trump. If Netanyahu resigns or if he's forced out, what comes next?

I mean, you mentioned Nftali Bennett, who is far right. And hearing names like that worries me. I mean, I feel like since I've been involved in politics, the Israeli government has slowly but consistently shifted to the right. Is that a fair characterization? What do you think the future is for the next government? Oh, for sure, there's a shift to the right. There are a few scenarios. First of all, if Netanyahu does step down or is forced to step down, the Likud has to elect a new leader.

Right now, the two names that come to mind are Israel Katz, who is a minister of transportation. very popular within the Likud, but really not anyone who the word charisma can be tied to in any way. The other candidate would probably be Gidonsar, who used to be a minister. He's a rival of Netanyahu, considered slightly more to the right of him. He's right now outside politics, but he's for sure making or thinking about making his comeback. That's the Likud itself, and the Likud will run for elections. they run against opposition from the right, led by people like Naftali Bennett. Maybe a Vigdor Lieberman, the Minister of Defense, who is also to the right of Netanyahu,

will also try to kind of consolidate his power. Maybe get all the right wing behind him. These two figures are definitely pro-Settler, definitely questioned the two-state solution, and clearly will not take any action if they get elected prime minister. clearly will not take any action to advance a peace process. On the other hand, there's also the centrist block, which is right now led by Yail Lapid. He's young, he's very popular.

Public opinion polls show that he's running very strong right now, almost as strong as the Likud. And he might be the surprise of the next elections. Maybe he can take over. What does Yail Lapid believe in? He believes in clean government. He believes in being nice to everyone. He's very centrist.

Probably not the type of knight in shiny armor that the peacemakes of the area are waiting for, although he is seen as pragmatic or someone at least that there will be a possibility to work with him for Middle East peace. And of course, there's always the Labour Party and the left, but they're in continuous decline for a year. So it's hard to see how they bounce back in the next election. So I think your basic observation is right. Israel is sliding to the right continuously. So if anyone thinks that Netanyahu's trouble somehow spells a new hope for the peace process, they're probably wrong because Netanyahu's

replacement will likely be someone from the right or from the very skeptical center. Yeah, I mean, you know, the peace process is on life support. After the Trump administration decided to move the U.S. Embassy to Jerusalem, President Abbas, the Palestinian president, declared that the Oslo Accords are dead. He said that the Palestinians won't accept the U.S. as a mediator. Saab Ericat recently told Nikki Haley to shut up. I mean, things are devolved. Do you think the prospects for a peace deal with this government or with the next government are next to zero? I mean, how is this looking? Is Jared Kushier going to save us? Well, maybe his last chance. It's interesting that we have a U.S.

administration now, that still hasn't expressed its support for a two-state solution. Now, supposedly, Jared Kushner and Jason Greenblatt are working on a new peace plan, and it may be rolled out very soon. It's kind of hard to see how that will work out. You'll need a leap of faith to believe that they can launch a peace plan while the Palestinians aren't even sitting to the table with the Americans and discussing issues with them. but there could be a peace plan or there could be some ideas put out there. And then will Israel, will the Palestinians agree to them, the few details that were leaked about this peace plan seem to indicate that it's a non-starter for the Palestinians as it is.

So that's not going anywhere. And Netanyahu himself is in a coalition, like we mentioned before, is in a coalition situation where he doesn't have a lot of flexibility to make concessions. Can he freeze building in the West Bank? It's hard to see it done. In this coalition, it was even hard for him back in the Obama years when his coalition was more comfortable with these kinds of moves. So it's hard to see.

However, there is this sliver of chance in which Netanyahu may be facing indictments, maybe facing the end of his political career, will want to leave as the leader who really made a historic change in Israel and will really be willing to go for this. He has nothing to lose. There are those who believe that this could be his final hurrah. Right now, we're not there. Yeah.

I'll knock on wood for that. The other major issue in the backdrop here is Iran. It seems like things are escalating. You know, the Israelis shot down an Iranian drone, an Israeli jet was then shot down by Syrian defense forces. Are tensions ratcheting up there, or do you think that was sort of a one-off military incursion and strike? I think tensions are ratcheting up. The fact of the matter is that Iran, now, you can put aside the whole debate over the Iranian nuclear deal. Israelis and Netanyahu still think it's an awful deal.

So does the current administration, previous administration thought otherwise, European support it. Let's put the nuclear issue on the side for a second. There is on the ground this move by the Iranians to expand. expand on the one hand, of course, to Yemen, but on the side that Israel is concerned about into Syria or what used to be Syria into this land that is now divided into so many fighting forces in which Iran is playing a major role. And that is a source of concern for Israel, a real source of concern. Because previously Iran had its influence by supporting Chisbalah in Lebanon, by supplying them with rockets, with the MISA can attack Israel. by giving them financial aid. That was a source of concern at the time.

But now it's 10 times worse because Iran actually has a military basis in Syria in areas that it can attack Israel. Now, what we saw a week and a half ago was a drone that flew towards Israel. It could be a rocket or a missile or a fighter jet one day. And Israelis are concerned about that. I think Israel would also want to make sure that at this point, now, before Syria, the situation in Syria settles down, before all sides actually withdraw to their own lines in this, what could be one day a post-war Syria, Israel wants to make sure that Iran is pushed out or pushed as far back as possible. And that's why we'll be seeing more of

these issues as time goes by. Yeah, I think that's exactly right. Natan Gutman, thank you so much for being on the show. I learned a lot today. Boy, does it seem like Prime Minister Netanyahu is in trouble, but he has 13, 14 lives maybe. He's survived a bunch of scandals before, so we shall see. Definitely, and he'll be here in the White House in the beginning of March, and I'm sure he'll be accepted warmly. Yes. Oh, lucky us. Lucky Washington, D.C. to be graced by BB's presence. Anyway, thank you, Natan. Appreciate you doing the show. Thanks for having me. Thanks again for listening to Pot Save the World. Thank you, Natan for joining me today. If you like the show, please rate and review us in the iTunes store. I have a really hard time

saying that every week, Elisbit for some reason. And share it. Share the episode with your friends. I appreciate it a lot and have a great week.