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Web of investigations entangles Israel's 'King Bibi'

[January 19, 2017] By Luke Baker and Maayan Lubell

JERUSALEM (Reuters) - Benjamin Netanyahu has spent 30 years in public office, including 11 years as Israel's prime minister, but this year his political future is being called into question as seldom before.

Police say they have questioned Netanyahu twice since Jan. 2 at his official residence in Jerusalem in two separate criminal cases involving allegations of abuse of office.

Netanyahu, known to supporters and opponents as "Bibi", has denied any wrongdoing, saying repeatedly: "there will be nothing because there is nothing". No charges have been brought.

Almost every night on television and every day in newspapers since Jan. 2, purported leaks have appeared describing what the media say are details of the investigation.

Prosecutors have confirmed almost none of what has emerged, only that Netanyahu has been questioned and that one of the cases relates to gifts he received from businessmen. Reuters was unable to independently confirm the specifics of the activities under investigation.

The leaks, though, have fueled opposition calls for him to go, and separate opinion polls conducted on behalf of the Jerusalem Post, the Walla news website, the Globes business newspaper and Channel 2 all show his party's popularity is slipping. Netanyahu has said the media is out to get him and he has no intention of stepping down.

"This orchestrated campaign includes media people who are acting not just as journalists but also as investigators, judges and executioners," he told a weekly meeting on Monday of legislators from his right-wing Likud party, who welcomed him with chants of "King Bibi".

"I intend to keep leading the Likud and the country for many more years."

In the second investigation, Haaretz newspaper and Channel Two news say police have tapes of Netanyahu speaking to an Israeli newspaper publisher about a mutually beneficial deal. Sections of transcripts, which Reuters has not independently authenticated, have been aired nightly for the past week.

The attorney-general has confirmed recordings exist, but has said he does not intend to release them yet.

(For a graphic on investigations click: http://tmsnrt.rs/2iE4zAN)

GIFTS

The first case Netanyahu has been questioned about, according to a Justice Ministry statement, involves receiving gifts from businessmen. Under Israeli law, public servants and their immediate family are prohibited from taking gifts or receiving benefits, unless they are small gifts that conform to "social norms".

Police and the Justice Ministry have not provided further information about either case.

According to Haaretz, one of the businessmen was Arnon Milchan, an Israeli-born Hollywood producer, who supplied Netanyahu and his wife with hundreds of thousands of shekels (1 shekel=$0.26) of cigars and champagne.

Netanyahu's lawyers do not dispute that he received gifts, but say there was nothing wrong in getting presents from personal friends. Milchan's lawyer in Israel, who is handling the matter, declined to comment.

Channel 10 and Haaretz have said the second businessman who supplied Netanyahu and his family with gifts was Australian casino tycoon James Packer. Channel Ten reported on Tuesday that Netanyahu's son Yair, 25, whom the Prime Minister's Office said is a friend of Packer, was questioned by police.

Representatives of Packer, who owns a home in Israel and has high-tech investments in the country, did not respond to requests for comment.

According to Channel 10, the gifts included tickets to a Mariah Carey concert in Israel for Netanyahu's wife Sara, gourmet meals for the family and Packer hosting Yair Netanyahu at his home in Colorado, aboard his yacht and at a hotel room in New York.

Media reports regarding the second case have startled many in Israel, because they say Netanyahu discussed a possible deal with a man many people believed to be his sworn enemy.

According to Channel Two, Netanyahu is being investigated over discussions with Arnon Mozes, owner and publisher of the widely-read Yedioth Ahronoth newspaper, to receive positive coverage in exchange for Netanyahu-backed legislation that would limit the distribution of competing free daily Israel Today.

Reuters found no evidence such an agreement was ever finalised.

Netanyahu, writing on Facebook on Sunday, said extracts of transcripts of his conversations with Mozes carried in the newspapers did not represent the full picture, but he could not elaborate while under investigation.

Israel Today is financed by U.S. casino billionaire Sheldon Adelson, who is a Netanyahu supporter. The paper is staunchly pro-Netanyahu. In 2014, the opposition proposed a bill to restrict its distribution. Netanyahu opposed it, and shortly afterwards called early elections, which he won.

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A worker installs a banner depicting Israel's Prime Minister Benjamin Netanyahu in Tel Aviv January 17, 2013. REUTERS/Baz Ratner/ File Photo

Two media spokespeople for Adelson contacted by Reuters for comment did not respond and Mozes and Yedioth Ahronoth have not responded to requests for comment. Mozes declined to answer reporters' questions as he walked into the police station where he was quizzed on Monday.

Netanyahu has accused Mozes and his newspaper several times of trying to topple him. During the 2015 election campaign, Yedioth Ahronoth took an editorial line against Netanyahu, frequently running critical reports on him.

Netanyahu's conversations with Mozes were recorded in the run-up to the March 2015 election at the prime minister's request by a former staff member, and the tapes were seized by police in a separate investigation, according to Channel Two and Haaretz.

TRANSCRIPTS

The newspaper’s editor, Ron Yaron, published a front-page op-ed on Sunday in which he said that had such a deal between Netanyahu and Mozes been concluded, Yedioth Ahronoth's entire staff would have resigned.

Netanyahu said Yedioth Ahronoth's negative attitude towards him and Israel Today's operations remained unchanged. "Every evening, filtered, carefully chosen transcripts are disseminated," the prime minister's Facebook response said.

According to what Channel Two described as excerpts from a transcript of a Netanyahu-Mozes conversation, the prime minister told the newspaper publisher: "We're talking about moderation, about reasonable reporting, to lower the level of hostility towards me from 9.5 to 7.5."

It quoted Mozes as replying: "We have to make sure that you’re prime minister."

Channel Two also aired what it described as excerpts in which the two men discuss limiting Israel Today's circulation through legislation and Mozes asks Netanyahu to suggest names of journalists he would like to see write in the newspaper.

Yair Tarchitsky, the chairman of Israel's Journalists' Union, said the suggestions of a backroom deal were shocking.

"I would never have imagined these two big enemies would be sitting down together and discussing how to shape Israel and the media landscape," he told Reuters.

"This deal, if it's really true, is a threat to Israel as a democratic state and to freedom of the press."

Investors seem unruffled by the investigations – financial markets and the currency remain strong. But while Netayahu's coalition is stable, some polls show his popularity waning.

A survey of 600 people published by Channel Two News on Tuesday showed 54 percent do not believe Netanyahu when he says he has done no wrong and 44 percent think he should resign now. Twenty-eight percent do believe Netanyahu and 43 percent said he should stay in office.

Four polls in recent weeks have shown the party led by one of Netanyahu's political rivals, Yair Lapid, a telegenic former TV host, growing stronger. The results indicated Lapid's party would win two to five seats more than Likud if an election was held immediately.

Netanyahu is not the first Israeli leader to have faced criminal investigation: former prime minister Ehud Olmert was convicted of breach of trust and bribery in 2014 and Ariel Sharon, premier from 2001-2006, was questioned while in office over allegations of bribery and campaign financing illegalities. He was not convicted.

In the past, prime ministers have stayed in office long after being put under investigation and officials who support Netanyahu believe the prospect of charges remains remote. But the weight of supposition could change sentiment and force elections, they said.

Tzachi Hanegbi a Likud minister was quoted in the Jerusalem Post newspaper as saying he has known Netanyahu for three decades and believes nothing will come of the investigation. "I think he is an honest guy," Hanegbi said.

(Additional reporting by Rami Amichai in Tel Aviv and Byron Kaye in Sydney; editing by Philippa Fletcher)

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