American Billionaires Spark Israeli Media Furor

Sheldon Adelson and Ronald Lauder Push Pro-Bibi Line

By Nathan Jeffay

Published September 19, 2011, issue of September 23, 2011.
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Las Vegas billionaire Sheldon Adelson has long been seen as a powerful force in Israel’s body politic. He’s the owner of Israel’s largest daily newspaper and so close to Israeli Prime Minister Benjamin Netanyahu that he sat in the front row of the Knesset’s VIP section for Netanyahu’s 2009 electoral victory appearance.

Ronald Lauder
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Ronald Lauder

Adelson is also close to another American billionaire: Ronald Lauder, who co-owns Channel 10, one of Israel’s major TV outlets. Now, due to a humiliating apology that Channel 10 was forced to broadcast for an investigative piece on Adelson, his influence and connections are being decried as a threat to Israeli press freedoms.

The station’s news chief, one of its senior editors and a station anchorman have all resigned to protest the apology — the anchorman doing so in a dramatic statement he gave on the popular news magazine program This Week, right after a junior staff member read the formal apology to Adelson on camera.

“This is one of the biggest crises in the Israeli media,” said Tal Schneider, journalist with the financial newspaper Globes and a former media lawyer. “What will happen next week if Channel 10 has a big story about Bibi [Netanyahu]? Will Sheldon pick up the phone and call Lauder?”

Adelson is unbowed. “This is not an issue of freedom of the press,” his spokesman told the Forward in an exclusive statement, “but rather the responsibility of the press to research defamatory allegations before they are published.”

Sheldon Adelson
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Sheldon Adelson

The station’s apology to Adelson, broadcast on September 8, was for a profile of the American Jewish mogul that This Week ran last January. The near half-hour-long profile was the fruit of a year’s work by reporter Avner Hofstein. He began the profile when Adelson became the subject of intense interest as opposition lawmakers embarked on a failed attempt to curb his influence by banning free newspapers — such as Adelson’s Israel Hayom.

Adelson took exception to the fact that, in the Channel 10 profile, an American construction manager interviewed on-air claimed that Adelson owed him $400,000 that was never paid, and to an exchange between Hofstein and American journalist Jeff Burbank regarding how he received his gambling license. “So what you are saying is basically that if it wasn’t for his strong political ties he wouldn’t be able to enter Vegas?” asked Hofstein. Burbank replied: “He was given extra consideration.”

The apology claimed that after the broadcast, Channel 10 conducted checks, and “it transpired that the allegations were entirely false.” Adelson received his gambling license, the apology continued, “after a meticulous [background] check that revealed a flawless business record.” He “didn’t benefit from any kind of preferential treatment and received the license according to the law and without resort to any kind of improper political connections or any other inappropriate means.” The alleged debt “has no basis in reality.”

The statement concluded: “In summary, there was no flaw whatsoever in Mr. Adelson’s conduct. We are very sorry that we hadn’t checked these allegations before we broadcast them and seek to apologize to Mr. Adelson and his family over the report.”

Such was the strength of feeling against the apology at the television station that on the same day it was due to air, Reudor Benziman, chief editor of Channel 10 News — who, sources say, approved the apology for broadcast to avoid the channel’s closure — resigned. The move was widely interpreted as Benziman’s way of signaling that he stood by the report and sought to undermine the apology. This Week’s chief editor Ruti Yovel then tendered her resignation.

In a dramatic climax, This Week presenter Guy Zohar resigned on-air minutes after a colleague read the apology. Sometimes one must “raise a black flag and stand up for professional and ethical values,” Zohar told his audience. Other colleagues were shown on-camera cheering, and the credits ran blank in what seems to have been a move by staff to distance themselves from the program that included the apology.

According to sources at Channel 10, Adelson convinced Lauder — who holds a 25% stake in the outlet and is a vital source of its funding — to insist that the apology be aired.

“The only reason we did it was because of the power of the money,” a Channel 10 employee told the Forward, on condition of anonymity. He said that executives at the financially troubled station feared its collapse if Adelson’s demand was not met. An official spokesman for Channel 10 told the Forward: “Channel 10 refuses to comment on the story.” Lauder did not respond to a request for comment.

The other Channel 10 employee who spoke to the Forward described the wording of the apology as “humiliating, to say the least.” After watching the saga unfold from the inside, he believes Adelson has made himself untouchable in Israel. “Nothing about Sheldon Adelson that is not flattering will ever be published again in Israel — I can promise you that,” the employee said.

Adelson’s spokesman, Ron Reese, said that such claims were a diversion from the real issue. “No one from Channel 10, including the individuals who have resigned, has claimed that these allegations were true or that any effort was made by Channel 10 or its news staff to verify or corroborate the information presented on-air in advance of its presentation,” he said. “Mr. Adelson was right to object, and the station was right to issue an apology.”

Aside from the details of the journalistic dispute, some journalists — citing the way in which the apology was achieved and implemented — say that the damage to the press extends beyond just making Adelson untouchable as a subject for future investigation. They cite his tight relationship with Netanyahu.

“The indications would be that next time, a journalist may be more hesitant to publish something that is very critical of Adelson, or Netanyahu, because not everyone would be willing to endanger his livelihood or sacrifice his job,” said Moshe Negbi, legal commentator for the Israel Broadcasting Authority, in an interview with the Forward.

Negbi, who is also a lecturer in media law and ethics at Hebrew University, described the “self-censorship” that he expects to result from the saga as “very dangerous.”

The pugnacious Adelson, who was born to a working class family in Boston, made his first fortune in computer trade shows and an even bigger fortune in gaming. He owns casinos in Las Vegas, Singapore and Macau, China. The most recent Forbes World Billionaires list, in March, estimated his net worth at $23.3 billion.

In recent years, Adelson and his Israeli-born physician wife, Miriam, have plowed hundreds of millions of dollars into many causes, including medical research and drug treatment. But conservative politics and Israel are Adelson’s main interests. Since 2007, he has donated more than $100 million to Taglit-Birthright Israel. He is also the main funder of the Shalem Center, a conservative think tank based in Jerusalem. His free newspaper, Israel Hayom, which launched in 2007, has the largest daily midweek circulation in Israel and is such a staunch defender of Benjamin Netanyahu that it has been derisively referred to as “Bibi Hayom” and the “Bibiton,” a play on “iton,” the Hebrew word for “newspaper.”

Since Channel 10’s apology, there has been a flurry of activity in the media community. Some 128 staffers of the station wrote a letter to management and regulators, saying that journalistic freedom “received a heavy blow in the troubling recent events.” Employees at Channel 2 released a statement of solidarity with their Channel 10 counterparts. And the Israel Press Council — a body comprised of media owners, journalists and regulators that is seen as the guardian of the industry’s ethics — decided to convene a special meeting on September 15 to discuss the episode.

But the real moment of truth for Channel 10 will come when the body that regulates Channel 10, the Second Authority for Television and Radio, completes an investigation that it has begun on the matter. After it convened a meeting on September 12, at which it launched the investigation, it released a statement to the Forward saying that it views recent events at Channel 10 with “great concern.” The Authority has the right to retract the channel’s license if it deems unacceptable the process by which the apology was approved.

For some experts, the regulator is actually the culprit of the saga. Media lawyer Eytan Lehman, who has represented other clients in legal proceedings against Channel 10, said that as such affairs go, each party acted pretty much as he would have expected. This means Adelson objecting to his portrayal; Lauder, with “full legitimacy,” protecting his investment in the channel by trying to avoid a lawsuit; and management agreeing to run the apology to keep the channel open.

“The problem is with the Authority — it should have intervened and convinced Channel 10, if it was convinced the apology is not justified, not to broadcast it,” he said.

Lehman, who lectures in media law and ethics at Bar Ilan University, contests the view that Adelson and Netanyahu now have protection from media investigation. He believes that the negative publicity generated this time and, by extension, the harm done to the perception of Israel Hayom, will make Adelson take a more hands-off approach in future. “If he has good consultants, they will tell him: ‘One more win like this and we are lost.’”

Contact Nathan Jeffay at jeffay@forward.com


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