Key Netanyahu Ally’s Corruption Trial Marks Pivotal Moment in Israeli Politics

Israel's Prime Minister Benjamin Netanyahu may find himself politically damaged if his former Foreign Minister is convicted of fraud and breach of trust

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Yin Dongxun / Xinhua /

Israeli Prime Minister Benjamin Netanyahu and then Foreign Minister Avigdor Lieberman shake hands at a special press conference in Jerusalem on Oct. 25, 2012.

It all comes down to a hotel room in Minsk. It is October, 2008. Two stout men sit watching television in the dark. One is Israel’s ambassador to Belarus, Ze’ev Ben Aryeh. The other is an Israeli lawmaker, just visiting. “I have something important I think you should know,” the ambassador says, reaching into his pocket, and pulling out an envelope. Inside is a letter from Israeli police, asking Belarussian authorities for help investigating the man who now holds the letter in his hands, Avigdor Lieberman.

Today Lieberman is on trial in Israel for fraud and breach of trust, having ascended to the position of Israeli Foreign Minister since the meeting in the hotel room and later resigning his position to face the charges stemming directly from the encounter with Ben Aryeh in Minsk. Israeli prosecutors chose not to charge Lieberman in the matters that the police investigated for so long–a trail of bank transfers between countries that had led to rumors of money laundering for much of the decade that Lieberman was being investigated. But both men ended up in court because of what happened after they left Minsk: Lieberman became Ben Aryeh’s boss. And Ben Aryeh, who painted the hotel room scene in testimony last week–landed another plum diplomatic post, this time in Latvia. Prosecutors maintain the promotion was a payoff for tipping off Lieberman, who breached the public trust with a shady quid pro quo. Lieberman maintains the events are unrelated.

A conviction not only could end Lieberman’s career, it would also inflict another political wound on Israeli Prime Minister Benjamin Netanyahu, who is still struggling to find his feet after barely winning the January election he was expected to dominate. Netanyahu had made Lieberman a partner in the election, linking their political fortunes by presenting voters with a joint ballot weaving together candidates from Netanyahu’s right-wing Likud Party and Lieberman’s ultra-nationalist Yisrael Beiteinu (Israel Is Our Home). Netanyahu stood by the arrangement even after Lieberman’s December indictment obliged Lieberman to step down as Foreign Minister just as the campaign was starting. And Netanyahu — with little choice after only narrowly prevailing in the Jan. 22 ballot — insisted on holding his old job open for the Soviet emigre as a new government was formed with the political newcomers who fared better with voters, led by former TV anchorman Yair Lapid. Until such time as Lieberman’s legal status is clear, Netanyahu serves as both Israel’s Prime Minister and its Foreign Minister.

However awkward in terms of protocol, the arrangement brings at least a temporary coherence to Israel’s foreign policy. During the four years Lieberman held the post he famously championed positions at variance with the government he represented. His 2010 address to the UN General Assembly proposed redrawing boundaries to shift hundreds of thousands of Israel’s Arab citizens into a new Palestinian state, Lieberman’s personal version of the two-state solution. He accused Palestinian Authority President Mahmoud Abbas, who eschews violent resistance, of “diplomatic terrorism.” Throughout his controversial tenure, Israel’s Defense Minister at the time, Ehud Barak, frequently played a more genuinely diplomatic role than Lieberman, shuttling between Jerusalem and Washington.

“All of this together created an atmosphere of irrelevancy,” says Danny Ayalon, who served as Lieberman’s deputy, and argues that someone else should take a turn as Foreign Minister. “It was Albert Einstein who said if you repeat the same experiment and expect different results, it’s insanity.”

Ayalon’s views on his old boss could well prove the hinge upon which Lieberman’s trial swings. Once a stout defender of Lieberman, Ayalon’s testimony on May 2 cast him as his chief accuser, the only witness to state emphatically that Lieberman essentially ordered Ben Aryeh named Israel’s ambassador to Latvia, which he won over 10 other candidates, despite what prosecutors called a critical assessment of his tenure in Belarus by the foreign ministry’s comptroller. Between Ben Aryeh’s ambassadorships, Lieberman appointed him to his political staff, even though in police interviews leaked before the trial, he called Ben Aryeh “an idiot” and “weak of character.”  “I was in his office, we discussed official matters, and by the end of the talk he told me that Ben Aryeh must be appointed to the Riga post,” Ayalon told the Jerusalem magistrate court on Thursday, according to published reports. Lieberman sat a few feet away, and declined to shake hands with the witness. “God forbid,” Lieberman said. “I don’t shake hands with cheaters and liars. Don’t you dare.”

The bad blood between the men is recent, and itself a subject of intrigue and speculation. The falling out occurred in December, when Lieberman abruptly dropped Ayalon from the list of candidates Yisrael Beiteinu would put before voters. Lieberman runs the party as his personal fiefdom, and just like that, Ayalon was out.

It was at this point that Ayalon told authorities that Lieberman ordered Ben Aryeh’s promotion. If it looked like revenge for being dumped, Ayalon insisted to the contrary under cross-examination. “I don’t seek revenge or hold grudges,” he told Lieberman’s defense attorney. “I was in your position for four years, and protected the same defendant.” Such is Lieberman’s reputation for Machiavellian maneuvering, however, that some analysts suggested the defendant deftly set up the whole dynamic–publicly destroying Ayalon’s political career so that any future testimony he might provide would appear tainted by a desire for revenge.

What appears clear enough is that Ayalon’s testimony is crucial. Ben Aryeh, who was sentenced last year to community service for tipping off Lieberman, was so reticent on the stand earlier in the trial that the prosecutor asked him to be declared a hostile witness. And two currently serving Israeli ambassadors involved in naming the new ambassador to Latvia failed to do significant damage to Lieberman during their testimony, despite being summoned from postings in Paris and Bangkok. Critics say their testimony could only be clouded, however, by the witnesses’ awareness that the defendant might resume his old job as their boss. The same conflict of interest confronted Lieberman when he stepped down as Foreign Minister and took over chairmanship of the Knesset committee overseeing the ministry. “Lieberman is currently on trial in an affair revolving around key positions in the foreign ministry. It is unthinkable that prior to the end of his trial, he is appointed to the chairmanship of a central committee in the Knesset which supervises the foreign ministry,” complained Nitzan Horowitz, a lawmaker from the left-wing Meretz Party. “This creates a difficult conflict of interests and damages the legal process.”

The political process isn’t faring that well, either. The alliance of Netanyahu and Lieberman is the backdrop against which Lapid has sketched “a new politics,” a phrase meant to connote more candor, transparency and concern for everyday Israelis. “For years they were very close,” says Bar Ilan University political scientist Efraim Inbar, referring to Netanyahu and Lieberman, who are less so lately. “He’s not very suave, you know, but he’s a pragmatist.  Netanyahu may need him….and it  looks like he might be acquitted.”

And if he’s not? Without Lieberman to head it, his party would likely cease to exist. Political strategist Baruch Leshem thinks that might usher in a new era in Israeli politics. With Lapid having forced Israel’s ultra-Orthodox religious parties out of the coalition, the departure of Lieberman and the party he rules with absolute power would make room for politics more attentive to public opinion, rather than “religious and secular ayatollahs,” Leshem writes on the Israeli news site y-net. Others, such as Inbar, say Lieberman’s departure from Israeli politics would do no such thing. Yisrael Beiteinu is allied with Netanyahu’s party for good reason, he points out. “Everybody will join the Likud,” Inbar says. “This is the story of Likud by the way, integrating other parties.”