Investigation of Gantz’s former company further muddies election’s swampy waters
Following a 38-year career in the army, former chief of
staff Benny Gantz in 2015 became the chairman of a Tel Aviv-based cybersecurity
company called Fifth Dimension, which developed artificial intelligence
solutions for law enforcement agencies. In December 2018, after just three years,
the company went bankrupt, having burned through millions of dollars from
investors.
“I can’t consider the Fifth Dimension to be a success
story,” Gantz admitted in an interview last year, in the face of harsh
criticism from Benjamin Netanyahu. The prime minister sniped that the Blue and
White chairman, his chief political rival, could not be trusted to manage the
State of Israel, having failed in his very first business venture.
“It was only one of eight or nine business activities I had.
I’m not some tycoon and I don’t consider myself a businessman,” Gantz said in
the interview, to the Ynet news site. “I propose we remember that this happens
to nine out of 10 high-tech companies. So let’s look at this with the proper
perspective.”
On Thursday, the question of the appropriate perspective
with which to look at Gantz’s failed company became one of the most pressing of
the current election campaign — the third in a year — when Acting State
Attorney Dan Eldad ordered a criminal probe into Fifth Dimension over
allegations of impropriety in its efforts to secure a lucrative contract with
the Israel Police.
Netanyahu, who is due to appear in court as a criminal
defendant over charges of bribery, fraud, and breach of trust just two weeks
after the national vote, said in response to the announcement, “The public must
know the truth, here and now, and before the elections.”
Announced just 11 days before the election, the
investigation further muddies the already swampy political waters, with the
timing blurring a clear view of the company, the allegations against it, and
the “truth” that Netanyahu is demanding.
The mud
The suspicions against Fifth Dimension focus, first, on a
NIS 4 million ($1.1 million) grant given to the firm by the police for a pilot
project using the firm’s ostensible tech capabilities, after company executives
allegedly provided law enforcement officials with misleading information. The
preliminary grant was intended to become part of a NIS 50 million ($14.6
million) contract. That contract was not finalized.
According to a State Comptroller’s report released shortly
before the April 2019 election, the Israel Police negotiated the NIS 4 million
grant with the cybersecurity company without issuing a tender, in violation of
acquisition regulations.
Fifth Dimension, the report found, told the Israel Police’s
acquisition committee in 2016 that it was founded four years earlier, instead
of three; said it had an already-developed product, when it did not; and said
that it had five clients — all security organizations — when it did not have
any at the time.
The report, which focused on alleged police impropriety
rather than suspicions against the company itself, faulted the force for
approving the Fifth Dimension pilot project without a tender, and for later
entering into negotiations with the firm for the NIS 50 million contract
without taking offers from any other companies.
“Police should have reached out to other technology
companies, whether start-ups or veteran firms, and informed them of its
intention” to sign a contract for technology services worth NIS 50 million,
then-comptroller Yosef Shapira wrote.
The report also faulted police for including Gantz and the
CEO of Fifth Dimension, Doron Cohen, in a meeting early in their deliberations,
as well as for giving the firm access to extensive information on its
operations as part of the pilot project.
It said then-police commissioner Roni Alsheich was the
driving force behind the project and that he ordered negotiations be held with
Fifth Dimension, whose executives also included several former Israel Police
brass.
After the pilot was determined to have been successfully completed
in September 2017, police earmarked NIS 50 million for the project in its
2017-2018 budget. But the negotiations fell through when Finance Ministry
officials said police would need to conduct a “thorough market review” in order
for it to recommend that the contract be exempted from a public tender process.
Soon after, Fifth Dimension declared bankruptcy when its
largest investor Viktor Vekselberg, a Russian businessman with ties to Russian
President Vladimir Putin, was sanctioned by the United States for his
connection to “malign activity” by the Russian government around the globe.
The swamp
While Gantz has not been named as a suspect in the affair,
Thursday’s announcement of the probe — coming so close to the election and
during a campaign by Blue and White that has tried to focus attention on
Netanyahu’s indictment for corruption charges — has raised a number of
questions about the acting state prosecutor’s timing and potential political
motivation. Gantz himself, while insisting he has nothing to hide and will
fully cooperate with the investigation, has claimed that a “political aroma”
hangs over the affair.
Law enforcement and state prosecution officials have
directed severe criticism at Eldad for his speedy decision to order the
criminal probe — he was only named to the post this month — with several
officials, speaking anonymously, accusing the interim head of Israel’s state
prosecution of being a lackey of the ruling Likud party.
One senior state prosecution official told the Haaretz daily
that Eldad was behaving as “the justice minister’s lackey” and a “consigliere”
— an adviser to a mafia boss.
Another said: “We’ve become Turkey. Eldad is turning the
prosecution political.”
At the same time, Blue and White officials have accused
Eldad and Justice Minister Amir Ohana — an ally of Netanyahu’s and the force
behind the appointment of Eldad (a move that angered other top justice
officials and was initially opposed by Attorney General Avichai Mandelblit) —
of leaking reports of the investigation before it became public. Ohana has said
the probe should have been opened months ago.
Mandelblit’s office on Thursday said that it had given the
green light to Eldad to open the investigation, but that the attorney general
himself was not involved in the case or the decision, implying a possible rift
within Israel’s legal echelon.
By staying out of the investigation, Mandelblit, who oversaw
the probes that led to Netanyahu’s prosecution, is widely reported to be
signaling that he does not regard the case as highly significant and does not
see Gantz as a likely suspect.
Appointed to the position of attorney general by Netanyahu,
it was Mandelblit who announced draft charges against the premier shortly
before the April 2019 elections, and a full indictment shortly after
September’s round two.
The case, and the timing of the prosecution, made him a
target of anger for many Netanyahu supporters.
Announcing the first ever decision to charge a sitting prime
minister in November, Mandelblit said it was a “hard and sad day” for Israel to
indict its leader. “The citizens of Israel, all of us, and myself, look up to
the elected officials, and first and foremost to the prime minister,”
Mandelblit said. “Law enforcement is not a choice. It is not a matter of right
or left. It’s not a matter of politics.”
Netanyahu — who claims the indictment against him is
politically motivated, and blames the opposition, media, police and prosecutors
of pressuring a “weak” attorney general, Mandelblit — denies any wrongdoing.
It is not clear if the probe into Fifth Dimension will move
the needle in any way in the latest closely fought election. The months leading
up to March 2’s polling day have been marked by other bombshells, including the
unveiling of US President Donald Trump’s Mideast peace plan and the setting of
a date for the beginning of Netanyahu’s corruption trial, which have not
dramatically affected opinion polls. As things stand, surveys predict neither
Netanyahu nor Gantz will have a clear path to a majority after next week’s vote
either.
But it is certainly an embarrassment and a major political
irritant for Gantz, who has made ousting Netanyahu his main message and has
sought to present a squeaky clean image in the face of the long-serving
premier’s graft charges. The attractions of lucrative chairmanships are clear,
but evidently such roles can come with a political cost.
Given the controversy around both the allegations and the
timing of the investigation, the affair also risks further undermining the
image of Israel’s already battered legal authorities. Until this month, they
were accused of anti-Netanyahu bias; now, it is Gantz who is claiming that they
are politicized.
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