Comptroller: Netanyahu family travel expenses raise questions

Benjamin and Sara Netanyahu  photo: Reuters

For nine of 11 trips by Netanyahu and his family, the parties paying for their room and board are not specified.

Foreign governments, Israel Bonds, public organizations, and private individuals paid for foreign trips by Benjamin Netanyahu and his family when he was Minister of Finance in Ariel Sharon's government. The cumulative cost of Netanyahu's trips was over $50,000, and thousands of dollars more was paid for flights and living expenses of his children, Yair and Avner, by foreign parties.

Five years after the probe began, the State Comptroller is publishing a report presenting detailed information, even if incomplete and sometimes unclear, about the overseas trips by Netanyahu and his family from March 2003 until August 2005, when he was Minister of Finance. 11 of the 15 trips were fully or partially paid for by foreign parties and non-governmental Israeli parties, and the government furnished the rest.

The report raises questions about the reliability of the information obtained by the State Comptroller about the financing of the overseas trips by Netanyahu and his family. Many particulars are missing from the figures in the table presenting the travelling expenses and sources of financing. For example, for nine of the 11 trips listed in the table, the parties who paid for Netanyahu's overseas room and board (and that of his wife and children, who joined him on his trips) are not specified. In other cases, the party who paid for the living expenses is named, but without mentioning how much was paid. In some cases, for example in the Netanyahu family's flight to the US and the French Riviera in October 2004, the State Comptroller himself states that it is "unclear" who paid for Sara Netanyahu's flight to the US. Questions also arise about the amounts paid by Israel Bonds, the main supporter of the journeys, for "security expenses" for Netanyahu, and basic particulars making it possible to understand what the money was spent for are lacking. Meanwhile, the police are looking into suspected double financing for some of the flights.

The issue of payment for Netanyahu's travels by foreign parties has naturally given rise to questions marks, and most of the details were revealed previously in newspaper reports. It appears, however, that one of the more embarrassing events now revealed by the State Comptroller concerns a flight paid for by one of Netanyahu's close associates at the time. The State Comptroller reports that Ministry of Finance director general Yechiel Leiter had to pay from his own pocket for flights to the UK for Netanyahu's sons, Yair and Avner. The amount paid, $2,880, indicates that they did not fly tourist class. Leiter claimed in 2011 that he did not remember the incident, and that he was "surprised at the amount." Four years later, however, he wrote to the State Comptroller that he had paid with his credit card for the related expenses of Netanyahu and his family on their overseas trips, and "Mr. Netanyahu later reimbursed me for the full amount." According to Netanyahu's lawyers, the amount was repaid to Leiter in cash.

Businessman Poju Zabludowicz is believed to be among those who paid for Netanyahu's trip to London. According to "The Sunday Times," Zabludowicz's personal wealth amounts to £1.5 billion ($2.2 million), making him the 67th wealthiest person in the UK. He owns 15.1% of Knafaim Holdings Ltd. (TASE: KNFM), controls El Al Israel Airlines Ltd. (TASE: ELAL) with a 35.3% stake, and own the Tamares hotel group, founded by the late Shlomo Zabludowicz, his father, after WWII. His global business group has holdings in finance, real estate, leisure, and technology. Its offices are spread over 11 countries, including Israel. In Israel, hotels owned by Tamares include the Daniel Hotels in Herzliya and the Dead Sea, the Shizen boutique hotel in Herzliya, the West boutique hotel in Tel Aviv, and the West Hotel in Ashdod. The West Resort Lagoon Hotel in Netanya is scheduled to open in 2017.

Private financing creates public problems

"Payment for a minister's overseas trip by an external non-governmental party is liable to put him in a situation of concern about a conflict of interest, if only where appearances are concerned," the State Comptroller writes. "An improper obligation to the party who paid is liable to emerge that could affect the minister's judgment in favor of the direct or indirect interests of the payer. This could affect public trust in the governing authorities." A conflict of interest could be created on two levels: concern about a "financial affiliation" between the payer's business interests and matters for which the ministry presided over by the minister is responsible, and a "personal affiliation" between the minister and the payer. The government control and supervisory mechanisms created over years were designed to prevent in advance such questionable situations. For example, since payment for overseas travel by the minister and his family is likely to constitute, at least in the State Comptroller's opinion, a gift to a public servant, a duty exists to report the payment to the gifts committee for the purpose of receiving permission for the gift. In practice, Netanyahu did not report any of his travels, although the State Comptroller states that his governmental colleagues also failed to do so, except for two ministers in two cases.

The State Comptroller's probe, which began in March 2011, refers to the period from March 2003 until August 2005, when Netanyahu was Minister of Finance in Sharon's government. The probe dealt mainly with his travels paid for partly or in full by external parties. The State Comptroller also examined the financing for the trips of Netanyahu's wife, Sara, and their two children when they joined him on his trips. In a departure from the usual practice, and with Netanyahu's consent, the State Comptroller also examined material at the Ayala travel and tourism agency, beyond the government agencies examined, which included the Ministry of Finance, Prime Minister's Office, and the cabinet secretariat.

In 2013, the findings were given to the Attorney General, whom the State Comptroller asked to examine whether there was any reason to open a criminal investigation against Netanyahu, who had meanwhile been elected prime minister. Only 21 months later, in September 2014, did the Attorney General announced that there were no grounds for such an investigation.

Published by Globes [online], Israel business news - www.globes-online.com - on May 24, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Benjamin and Sara Netanyahu  photo: Reuters
Benjamin and Sara Netanyahu photo: Reuters
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