Former Top Aide Agrees to Testify Against Israel's Netanyahu

(Bloomberg) -- A former close aide to Benjamin Netanyahu has agreed to testify against the Israeli prime minister, a key break in investigations that police have acknowledged publicly for the first time involve suspicion of bribery, fraud, and breach of trust.

The police disclosure was made in a court-issued gag order prohibiting news media from reporting details of negotiations with Ari Harow, Netanyahu's former chief of staff. Harow has agreed to serve as a state witness against the prime minister, police confirmed Friday while reiterating the gag order. 

Police investigators have questioned Netanyahu several times at his residence, and have also spoken to some of the prime minister's friends and associates, including billionaires Sheldon Adelson, chairman and majority owner of Las Vegas Sands Corp., and Arnon Milchan, the Hollywood producer of films such as “Fight Club” and “The Big Short.”

Details of the investigations have been regularly leaked to Israeli media, but the court order was the first time the possible charges were made public by the police. Police sent a copy of the document in a message to reporters' mobile phones.

In a video posted to his Facebook page, Netanyahu said he doesn't respond to “background noise” and “will keep on working” for the citizens of Israel, noting some recent successes in expanding Israel's diplomatic ties and mentioning his government's efforts on behalf of the settlement movement.

One of the cases involves suspicions that Netanyahu, 67, received gifts including expensive cigars and champagne from wealthy businessmen, according to Channel 2 and other Israeli media. In a second case, Netanyahu is suspected of conspiring with the owner of Israel's Yedioth Ahronoth newspaper to undermine a competing free daily backed by Adelson, according to Channel 2.

Investigators also are looking into suspicions that Netanyahu associates improperly profited from Israel's purchase of nuclear submarines from Germany's ThyssenKrupp AG in a deal worth more than $1.5 billion, although Netanyahu himself isn't a suspect in that case. Harow is being investigated in a separate case about his personal business dealings.

Netanyahu, Israel's second-longest serving prime minister, denies all wrongdoing and says the investigations are a witch hunt set off by political opponents. His office declined to comment on the police disclosures in Thursday's gag order.

--With assistance from Yaacov Benmeleh

To contact the reporter on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net.

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Michael S. Arnold, Mark Williams