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16 Jun

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Prime minister’s wife admits to lesser charge in plea bargain and pays £12,000 fine

Sara Netanyahu

Sara Netanyahu, who illegally spent £79,000 of public money on catering, has been fined £12,000. Photograph: Gali Tibbon/AFP/Getty Images

Sara Netanyahu, the wife of Israel’s prime minister, has been convicted of illegally misusing thousands of pounds of public funds on lavish meals.

A Jerusalem court on Sunday accepted a plea bargain in which Netanyahu agreed to admit to a lesser charge than the original fraud accusations. She will pay about $15,000 (£12,000) in fines and reimbursements to the state.

The sentencing ended one of the long-running cases against the family. However, Benjamin Netanyahu still faces the prospect of three corruption indictments later this year that may end his decade as leader and even result in a prison sentence. He denies all charges.

According to the original indictment against Sara Netanyahu, of fraud and breach of trust, she and a government employee were accused of spending roughly $100,000 (£79,000) on catering from expensive restaurants between 2010 and 2013, despite having a in-house cook provided by the state.

In Sunday’s settlement, she admitted to taking unfair advantage of another person’s mishandling of state money and reduced the overspending charge to $50,000. Former caretaker Ezra Saidoff also reached an agreement with the prosecution and was fined $3,000.

“As in every plea bargain, each side makes concessions, sometimes hard concessions,” said the prosecutor, Erez Padan, at the Jerusalem magistrates court. “It is right and proper for the public interest to bring this case to an end.”

Netanyahu’s lawyer, Yossi Cohen, told the court his client had already been punished by public humiliation in the closely watched investigation. “Four years of ugly leaks and denigrations” constituted “inhuman punishment”, he said.

“No other person could have withstood this. This lady is made of steel,” he added.

The 60-year-old child psychologist has been a controversial presence at her husband’s side throughout his political career. In addition to the fraud case, she has faced mistreatment accusations from employees and was described in a newspaper as “Israel’s Marie Antoinette”.

In 2017, Netanyahu was ordered to pay tens of thousands of pounds in damages in a dispute with two former domesticstaff who accused her of bullying. She faces a third lawsuit from an employee who alleged staff were treated like “slaves”.

Last year, an audio recording emerged of Netanyahu furiously scolding a family publicist over a gossip column. She was angry with him for not highlighting her professional qualifications in the press.

“BA, MA,” she was heard shouting, exclaiming each syllable in reference to her bachelor and master’s degrees. Her husband responded to public shock over the tirade, saying on Facebook that everyone “gets angry and says a few words that [they] didn’t mean”.

Benjamin Netanyahu is entangled in a series of more severe corruption investigations and is due to appear at a pre-trial hearing in October after Israel’s attorney general announced his intention to indict in all three cases.

He could face up to 10 years in prison if convicted of bribery and a maximum three-year term for fraud and breach of trust.

One case, called Case 1,000, involves allegations of receiving gifts, including cigars, champagne and jewellery, from billionaires, among them the Australian casino operator James Packer, allegedly in exchange for favours. In Case 2,000, Netanyahu is accused of colluding with the country’s top-selling newspaper, Yedioth Ahronoth, to hurt its competition in exchange for favourable coverage.

The third and most damning, Case 4,000, involves allegations that Netanyahu offered incentives to the Israeli telecoms provider Bezeq in exchange for positive stories on an online news website it owns.

Netanyahu has denied all accusations, dismissing them as part of a witch-hunt orchestrated by the press. He will fight for re-election in September, weeks before the pre-trial hearing is due to start.

A win for Netanyahu has been portrayed domestically as a lifeline to block the graft cases as some of his parliamentary allies have suggested they might back laws to grant him immunity.

Agence France-Presse contributed to this report

World Politics

United States

Since Kushner entered the White House, a firm he founded has received over $90m in foreign funds. The public has a right to know the sources

Senate Democrats have asked the Federal Reserve to scrutinize Deutsche Bank over allegedly suspicious transactions tied to President Trump and son-in-law Jared Kushner.

Senate Democrats have asked the Federal Reserve to scrutinize Deutsche Bank over allegedly suspicious transactions tied to Donald Trump and his son-in-law, Jared Kushner. Photograph: Brendan Smialowski/AFP/Getty Images

The stench surrounding Jared Kushner has grown more pungent with every passing day.

On Monday, the Guardian’s Jon Swaine reported that, since Kushner entered the White House as a senior adviser to his father-in-law, a company Kushner co-founded has received over $90m in foreign funding, channeled through secretive offshore companies.

The public has no idea where this money is coming from – a major problem given that Kushner is not just one of Donald Trump’s chief international envoys, he is the de facto chief envoy.

The former secretary of state Rex Tillerson and former defense secretary James Mattis found Kushner’s interference in Middle East diplomacy opaque, irritating and – by the summer of 2017, when he greenlit a blockade of Qatar, a country with a US airbase – downright dangerous. His zeal for settling a “deal of the century” for the Israeli prime minister, “Bibi” Netanyahu, an old family friend, has made him the US government point person in a region notorious for attempting to curry US political favor with dollars.

Even a whiff of potential conflicts of interest undermines Kushner’s diplomacy – something that would be unacceptable in any other administration.

But this is Trump World. There is only one guiding rule, which the principals barely bother to hide: pay to play. The corruption and self-dealing by Trump and his family is on so vast a scale that if it wasn’t so horrifying you’d almost admire the audacity.

Kushner founded the company in question, an online commercial real estate broker called Cadre, with his brother, Joshua, in 2014. “Cadre is going to make us billionaires,” Kushner announced to colleagues shortly afterwards. He refused to give up the entirety of his stake when he joined the Trump administration. (Kushner claims he divested from most of it, but shareholders were not notified of any sale, which is highly unusual.)

Worse: on his initial financial disclosure form, which he filed in March 2017 with the Office of Government Ethics, Kushner did not even list his stake in Cadre, which was worth up to $25m at the time. After the glaring oversight was reported by the Wall Street Journal, a lawyer for Kushner said that the omission was inadvertent and would be rectified. By June 2018, Kushner’s stake in Cadre was valued at up to $50m, or between 3% and 6% of the company.

A whistleblower has alleged that Kushner’s business interests are among the reasons career White House personnel security officers recommended that neither he nor his similarly conflicted wife, Ivanka Trump, be given a security clearance – a recommendation President Trump ignored.

Many administrations suffer embarrassing exhibits of corruption from family members who see proximity to power as their opportunity to cash in. In the 1970s, Jimmy Carter’s little brother, Billy, tried to profit by endorsing Billy Beer. In 1999, Neil Bush, son of the 41st president and brother of the future 43rd, founded a classroom technology company that received investments from the Kuwaiti royal family, a Chinese technology executive and a Russian billionaire. That same year, Tony Rodham, Hillary Clinton’s now deceased brother, partnered with the political opponent of a United States ally to export hazelnuts from the former Soviet republic of Georgia.

But those efforts were made outside the White House by relatives without top-level security clearances. They pale in comparison to what the Trumps and Kushners may have done.

Some highlights to date: first there is the issue of the president’s tax returns, which Trump has refused to disclose despite a law that says that the treasury secretary must provide them to Congress if requested. We also know that, starting in 2010, Deutsche Bank lent money to the Trump Organization not from the bank’s own balance sheet, but via the private banking division, which means that Trump’s business is on the hook to entities or individuals whose identity is obscured.

Meanwhile, as president, Trump has brazenly intermingled politics with his business by flaunting presidential access via Trump properties like Mar-a-Lago, the so-called “Winter White House”, and the Trump International Hotel in Washington DC, which have been flooded with foreign occupants looking to curry favor with administration figures.

Then there was “the bangle”. On 16 November 2016, just days into the Trump transition, Ivanka promoted a diamond bracelet from her jewelry line on 60 Minutes. The next day, her company sent out a “style alert” advertising the bangle for over $10,000. For the next 17 months, Ivanka moonlighted as a White House adviser while keeping ownership of her company, which was awarded several lucrative foreign trademarks, sometimes around the time of her meetings or chats with those foreign countries’ leaders.

Meanwhile, her husband, Jared – nominal head of foreign outreach on behalf of the Trump transition – and his father, Charles, were meeting secretly with the Chinese and various Middle Eastern rulers, seeking funds to bail out their financially stricken building at 666 Fifth Avenue, for which they needed $1.4bn by February 2019.

History will judge corruption to be the most destructive and defining characteristic of the mob-like family

Ultimately a Canadian firm – Brookfield, whose largest outside shareholder is an uber-rich Qatari sovereign wealth fund – came to the rescue with a financial offer that, according to any normal real estate logic, made no sense: leasing the building for 99 years, for $1.3bn – and paying the entire amount up front. Coincidentally, around the time that deal was reported to be in the works, the secretary of state called on the Saudis to end their blockade of Qatar. In cynical parlance, this is called dollars for diplomacy.

Fortuitously for the Kushner family business, the blockade of Qatar continues, which means the Qataris are still vulnerable. In the spring, representatives of the Qatari government told me in person and by email that there was another payment due to Jared via an offshore fund in June – which happens, apparently, to be when Cadre received the $90m.

In any other administration, a senior government official (let alone son-in-law) who was revealed to have clung on to a $50m stake in a company while serving in office and not disclosed it would have been asked by the president to leave. But President Trump will do no such thing – so other parts of the government must.

The Department of Justice should investigate Jared’s initially non-disclosed $50m stake in Cadre, and the investments the company has since received.

And Congress must work harder to overcome stonewalling and investigate the strange relationships that Kushner Companies and the Trump Organization have had with Deutsche Bank, where senior executives ignored calls to report Trump and Kushner transactions to the government for potentially suspicious activity. At least Senator Elizabeth Warren is demanding that the government-backed mortgage firm Freddie Mac supply details about its $800m Kushner deal this spring.

Congress should also put the microscope on Jared’s private communications and unwavering alliance with the clearly dangerous – but rich – crown prince of Saudi Arabia. (The Saudis, it should be noted, were shareholders in the Canadian firm that bailed out 666 Fifth Avenue.) But somehow that message gets lost in noise about Russia and other red herrings.

History will judge corruption to be the most destructive and defining characteristic of the mob-like family occupying 1600 Pennsylvania Avenue. And it will be – but only if Congress takes action.

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