Corruption permeates Israel under Netanyahu, goes back decades

Corruption permeates Israel under Netanyahu, goes back decades

Prime Minister Netanyahu faces mounting scandal, as do his wife, friends, and many colleagues. This follows scandals for previous Israeli leaders Yitzhak Rabin, Shimon Peres, Ehud Barak, David Ben-Gurion and others for charges that range from financial corruption to sexual assault.

by Kathryn Shihadah, If Americans Knew

Certainly every country has its share of shady politicians and dirty little secrets. The US has more than enough to be embarrassed about. We need to vet our elected officials’ campaign funds, study their relationships with non-government operatives, and examine our government’s spending habits.

We need to spend our money where it will have a good return, where it will be invested in ways that reflect our American ideals. And when it comes to foreign aid, we should not support governments that will be wasteful, imprudent, or treacherous toward the people they rule.

About 20% of the American foreign aid budget goes to Israel. Is that a good investment? Is this a trustworthy government?

One would expect that a nation with oodles of Nobel laureates, world-class medical facilities, cutting edge technology, a robust economy, a nation that boasts (erroneously – see embedded links for the truth) a “flourishing democracy,” the “most moral army in the world,” “an absolute reverence for life,” and ancient, deeply religious underpinnings—one would expect that such a nation might be a little cleaner than average.

Human rights violations aside, infraction of international law and disdain for United Nations resolutions notwithstanding, Israel seems to have more than its share of shenanigans.

In fact, misconduct seems to be the norm, rather than the exception in the country that receives $10 million a day from the United States. State Prosecutor Shai Nitzan commented recently that there is nothing to worry about: “A corrupt state is a state that doesn’t fight against corruption” – and Israel is fighting. But from the looks of things, it isn’t fighting nearly hard enough.

Israel is one of the world’s leading exporters of investment scams ($5-10 billion a year–read this or a few of these), with organized crime that has grown to “monstrous proportions.” That cutting edge tech sector? 25% of its revenue comes from “shady or fraudulent industries.” And that government of the people? 75% of Israel’s 120 parliamentarians live in the pockets of special interest groups and their relentless lobbyists. (To be fair, at least that percentage of American congress people live in the pockets of AIPAC.)

Israel is fighting corruption from the highest places in government, right on down to the household help. Here is just a starter list of the fine messes that Israel’s darlings have gotten themselves into.

Charges against Netanyahu

Arnon Milchan

“Case 1,000” – Cigars and Pink Champagne Affair
In 2015, Bibi allegedly accepted “lavish gifts worth hundreds of thousands of dollars” from a number of people, including billionaire Hollywood producer (and Israeli spy) Arnon Milchan. Milchan admitted that for years he’d been giving the Netanyahus expensive gifts—champagne, jewelry, boxes of cigars—at their request. At the time as the 2015 gifts, Milchan was negotiating a media partnership which, if it had succeeded, would have given him controlling interest over Channel 2 News in Israel. According to the Times of Israel, “if Milchan had succeeded, Netanyahu would have gained valuable influence over Channel 2 News.”

The Netanyahus also reportedly received lavish gifts from Australian millionaire James Packer in exchange for special favors.

The Prime Minister maintains his innocence.

Arnon Mozes

“Case 2,000” – the Newspaper Rivalry Affair
In 2014, Netanyahu allegedly attempted to manipulate newspaper circulation in Israel. Namely, he promised to advance legislation that would effectively reduce the circulation of Sheldon Adelson’s free newspaper, Israel Hayom, and increase Arnon Mozes’ Yedioth Ahronoth. All Mozes would need to do was give Netanyahu more favorable coverage during the election season.

The Prime Minister denies any wrongdoing.

In addition, Netanyahu’s phone records are under investigation: it seems that during the last election he placed calls to Adelson, owner of Israel Hayom. The timing of some of these calls coincided with “particularly sympathetic headlines,” which may constitute illegal campaigning. Adelson is an American citizen and a major donor to the Republican Party.

Previous Netanyahu allegations
During his first term as Prime Minister (1996 – 99), Benjamin Netanyahu was investigated twice for fraud and breach of trust. In both cases, the police recommended that he be charged, but prosecutors declined. Ironically, the first investigation alleged that Netanyahu attempted to influence a corruption investigation.

In both cases, he insisted he was innocent.

History repeats itself

Netanyahu is not the first Prime Minister to be embroiled in scandal; in reality, this has been going on for decades. It can get very distracting.

One member of Israeli parliament – from Netanyahu’s Likud party – came up with a solution to this annoying problem. In 2016, David Amsalem drafted a bill that would shield the prime minister from criminal investigation while in office. He explained on Facebook: “For the past 30 years, there hasn’t been a single prime minister who wasn’t busy with investigations. The prime minister holds the most important job in Israel…[and] can not be preoccupied by investigations practically every day.” The bill is not expected to pass into law.

Yitzhak Rabin

What have these Prime Ministers been getting themselves into all these years?

Yitzhak Rabin (PM 1974-77, 1992-95) was involved in The Dollar Account Affair—an illegal bank account—which led to his resignation from his first stint as Prime Minister in 1977. Interestingly, he was re-elected in 1992. (Earlier, Rabin had been a member of the pre-Israel underground paramilitary group, Haganah.)

Shimon Peres

Shimon Peres (PM 1984-86, 1995-96) is known in the West as a winner of the Nobel Peace Prize. Among Arabs, he is nicknamed “the butcher of Qana” and “the engineer of genocide,” referring to a 1996 attack in Lebanon that killed over 100 civilians. A Time Magazine article stated that “for Palestinians, on the receiving end of this “great” man’s policies, Peres was an integral part of a project that was anything but honorable…his whole history was devoted to establishing and then developing a state founded on dispossession and the ethnic cleansing of another people[.]” (Peres had also been a member of Haganah.)

Ehud Barak

Ehud Barak (PM 1999-2001) Barak was investigated several times for alleged illegal campaign financing, bribery, money laundering, and more. Those charges did not stick. In 2009, While visiting England, Barak almost faced arrest under “universal jurisdiction” as a war criminal for his actions during Operation Cast Lead. Similarly, he, along with Ehud Olmert (see below) and 12 other Israeli political officials, was charged by lawyers in Belgium for war crimes. As long as the officials stay out of Belgium, they are not at risk of arrest. (Barak served in the IDF for 35 years.)

Ariel Sharon

Ariel Sharon: (PM 2001-2006) Sharon was investigated for a number of financial and corruption scandals during his time as Prime Minister, but is best remembered for his efforts as Defense Minister. Sharon launched the invasion of Lebanon in 1982 which resulted in the Sabra and Shatila massacres. The world reacted strongly against this atrocity, and in 1983 Israel set up a commission of inquiry. It determined that Sharon bore “personal responsibility” for the massacre, stating, “Mr. Sharon was found responsible for ignoring the danger of bloodshed and revenge…as well as not taking appropriate measures to prevent bloodshed.” Sharon was forced to resign. Nevertheless, he was later elected Prime Minister 3 times. (Sharon had also been a member of Haganah.)

Ehud Olmert

Ehud Olmert (PM 2006-2009) Olmert was dogged by corruption investigations from the mid-1980s, leading some to believe that he was “corrupt but a master at covering his tracks,” and others to conclude that “the authorities were simply obsessed with harassing him.” Beginning in 2008, his luck changed: Olmert was convicted for accepting bribes, falsifying documents, tax evasion, obstruction of justice, and breach of trust in the Talansky Affair, the Holyland Affair, the Rishon Tours Affair, and the Investment Center Case. (He tried to pin the Holyland case on his secretary, and offered her money – $10k/month – for her prison sentence. But she turned state’s witness and testified against him.) Olmert resigned, was imprisoned in February 2016, and then was granted an early release in July 2017, thanks to “impeccable” behavior, according to the parole board. Ironically, however, the recently released Olmert is now under investigation for allegedly disclosing classified information while in prison.

Shady dealings go beyond the prime minister’s office: Benjamin Netanyahu’s wife, Sara, has a few issues of her own.

Sara Netanyahu

Sara Netanyahu

“Mealbooking affair” – corruption
Sara Netanyahu, wife of the Prime Minister, already has a full-time chef, but she is about to be indicted for fraud and breach of trust  for hiring an outside chef and having hundreds of lavish meals catered at the official residence – about $100,000 worth – paid for with public funds. (In addition, in 2011 alone, the Netanyahu residence billed Israeli taxpayers $24,000 for take-out food.) The probe alleges that Mrs. Netanyahu falsified documents. The most serious charge carries a possible sentence of five years in prison.

Previous Sara Netanyahu charges
Mrs. Netanyahu’s employees have had additional complaints. In 2015, former caretaker at the PM residence Menny Naftali won a case against her for verbal and emotional abuse. He alleged that she drank “crazy amounts” of alcohol, especially champagne, and then regularly flew into a rage, yelling at and humiliating Naftali and other employees, over 20 of whom had quit during the Netanyahus’ tenure at the residence. The court awarded Naftali compensation of about $43,000.

The Prime Minister stands by his wife, describing her on Facebook as a “courageous and honest woman who has never had any flaws in her actions.”

And the trail of corruption goes on.

Bibi’s inner circle and top powerbrokers

“Case 3,000” – the Submarine Affair, David Shimron et al

Israeli Prime Minister Benjamin Netanyahu climbs out of the Rahav, the fifth submarine in the fleet. It arrived in Haifa port January 12, 2016.

In 2013-14, in what has been described as the “gravest corruption case in Israel’s history,” David Shimron (Netanyahu’s personal attorney, former chief of staff, close friend, and 2nd cousin) allegedly attempted to push through a $480 million deal (some sources place the value at $1.7 billion) for the purchase of submarines and patrol boats from a German shipbuilding company in which he has a financial interest. Shimron stood to receive millions of dollars. The case includes allegations of bribery, fraud, and breach of trust. According to Ha’aretz, “At least ten high-powered individuals have been identified as involved in the scandal, including very close associates of Prime Minister Benjamin Natanyahu,” among them a former Navy commander, a retired rear admiral, and a former deputy head of the National Security Council.

Netanyahu’s hands may or may not be clean in this affair. He has been accused of frivolously increasing the order of submarines from 5 to 6—a wasteful action that former defense minister Moshe Ya’alon claimed “jeopardizes the interests of the country.” One journalist suggested that if Netanyahu knew what was going on around him, “then this is a case of suspected offenses that violate ethical standards.” If he wasn’t aware, then he had “surrounded himself unknowingly with a bunch of allegedly corrupt people, appointing them to the highest and most sensitive positions in government.” Either way, the news is not good.

Netanyahu maintains his innocence.

(As an aside, these submarines and patrol boats were intended to protect offshore natural gas platforms—as Israel extracts natural gas that is also claimed by Lebanon, Syria, Cyprus, and the Palestinians. The tangle of claims, counter-claims, and violence that surround this resource located in the Mediterranean Sea is astonishing.)

Moshe Katsav

Rape conviction, 2010 – Moshe Katsav (former Israeli President)
Katsav resigned as President of Israel in June 2007 when he was charged with rape, as well as with molesting or sexually harassing two female employees. The first incident happened in the 1990s when he was cabinet minister; the second and third happened while he was president. He began his sentence in 2011 and was granted early release in 2016 after serving five years for rape.

He has repeatedly professed innocence.

An Israeli drone manufactured by Israel Aerospace Industries (Yossi Zeliger/Flash90)

Case 630, corruption – Israel Aerospace Industries (IAI)
Top management at government owned IAI are under scrutiny for alleged bribery, fraud, embezzlement, money laundering, and breach of trust. Suspects include retired IDF brigadier-general Amal Asad and many others at high levels, including executives, board directors,  and board members, as well as individuals who were “supposed to be guardians of the public trust.” Police describe the allegations as “systematic criminal behavior and deep corruption seemingly commonplace in Israel Aerospace Industries.”

Aryeh Deri

Bribery, fraud, breach of trust – Aryeh Deri
Aryeh Deri, one of the founders of the ultra-orthodox Shas party, has had his ups and down. In the 1988, at the age of 29, Deri became the youngest Interior Minister in Israel’s (short) history. In 1999 he was convicted of fraud, bribery, and breach of trust, and served 22 months. In 2013 he was back at the helm of the Shas party. In January 2016, he was re-appointed Interior Minister. And by the end of March that year, he was embroiled in another scandal, suspected of tax offenses, breach of trust, and money laundering.

Faina Kirshenbaum

“Case 242,” corruption – Faina Kirshenbaum et al
In “one of the biggest public corruption investigations that have been uncovered in Israel,” dozens of officials have been arrested, charged, or indicted on a range of activities, including bribery, money laundering, conspiracy, extortion, tax evasion, embezzling, and breach of trust. In the middle of this mess is Faina Kirshenbaum, former Deputy Interior Minister and former director general of far-right political party Yisrael Beytenu (“Israel is our home”). Kirshenbaum is “at the center of some 10 separate corruption cases,” and in the words of her indictment, “acted willfully and intentionally, at times with great sophistication, in order to carry out a series of crimes.” She allegedly used her position as deputy minister to embezzle millions of dollars. Many of those implicated are members of Yisrael Beytenu.

Gil Shefer

Alleged Sexual Harassment – Gil Shefer (Netanyahu’s former chief of staff)
In December 2016, Gil Sheffer was arrested on suspicion of sexual offense that allegedly occurred during his time as Netanyahu’s chief of staff in 2012-13. This was not his first brush with the law: in 2013 allegations came to light of sexual harassment dating back 15 years, too long ago to allow investigation. Coincidentally, he resigned from office at the same time the allegations became public – both Shefer and Netanyahu insist that his departure was unrelated to the scandal. Interestingly, Shefer’s predecessor, Natan Eshel, had also quit amid a sexual harassment scandal. Shefer was also recently questioned in the Mealbooking Affair (see #9 above).

Shaul Elovitch

Case 4000 – “the Bezeq Affair”
Meet Shaul Elovitch, Chairman and owner of telecom giant, Bezeq. He may or may not be a longtime friend of PM Netanyahu. (Bibi stated once that they were “little more than acquaintances,” and later that he had been a “personal friend for 20 years.”) Elovitch himself is already under investigation, and now he is in his own version of Case 2000 (see #2 above): for the last few years, Elovitch’s internet portal, Walla, has been suspiciously pro-Netanyahu. Starting in 2015, Bibi stories were always glowingly positive; photos of Sara Netanyahu were profuse; stories like the Naftali scandal (see #X above) miraculously disappeared from the website; stories of Bibi’s son Yair and his girlfriend miraculously appeared just when rumors were flying of his being gay—and all of this at roughly the same time that Netanyahu’s office was advancing policies favorable toward Elovitch’s business. When Bibi was ordered to turn over information, he refused to comply.

Perach Lerner

Perach Lerner – corruption  
A highly influential advisor of Netanyahu, Perach Lerner recently confessed to fraud and breach of trust. She had allowed her husband to take advantage of her position with the prime minister to help his business.

Histadrut, an organization of the settler Jewish working class, was the key Zionist organization responsible for the formation of the Israeli state.

Under-age sex scandal: Tzion al-Grisi
Al-Grisi was not a high-level official, but he was important enough to rub elbows with some powerful people before the scandal. He behaved improperly toward a young girl, starting when she was 8 or 9 years old, which is shocking enough. He was later convicted, but the story doesn’t end there.

Al-Grisi was  was a labor union delegate to Meretz, a leftist, Zionist political party, where he allegedly kept his position for months before Twitter got ahold of the news. He was also regional branch chair of Histadrut, Israel’s national trade union center. Histadrut has reportedly taken no action against Al-Grisi.

(Quick history lesson: Histadrut was founded in 1920 purportedly as a labor union, but acted as a colonizer of Palestine by assimilating immigrants in order to “carry out the conquest of the land.” It rejected Arab workers and products–essentially boycotting Arab labor and produce. David Ben-Gurion (Israel’s legendary first Prime Minister) was the organization’s first secretary-general, and added to the Arabs’ misery with wage scales that favored Jewish workers. Under Ben-Gurion, “class struggle was redefined as the struggle against Arab labor.” He also reportedly helped himself to the treasury–including for “trysts with his mistress in sundry European spas” (The Sacred Chain: A History of the Jews by Norman Cantor, New York: HarperPerennial, 1995, p. 368). Histadrut also founded Haganah.)

Al-Grisi maintains innocence, claiming that the girl seduced him and that the charges were “concocted” by her mother.


Israel is not alone in the corruption within its government, but the magnitude of the mess is critical when considering the amount of aid it receives from the United States–over $10 million per day. Compare this to assistance to the occupied Palestinian territories–averaging $400 million per year–approximately one tenth of what Israel receives. In fact, the US Congress is trying to reduce aid to Palestinians by vilifying the compensation being paid to the families of their slain and imprisoned.

Another serious issue is the Israeli government’s way of creating distractions for the world when a serious scandal comes to light. Israeli political analyst Michel Warschawski warned that Netanyahu “desperately needs distractions from these scandals. A ready-made target is always Gaza.” He added, “The danger is that he tries to heat up things there and starts a war.” 

Kathryn Shihadah is a staff writer for If Americans Knew

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