Newspaper publisher in Netanyahu case sued for paying legal fees with company funds

Yediot Ahronot publisher Arnon Mozes is being sued by the newspaper’s director for misappropriating company funds to pay for his legal defense in Case 2000.

By Lauren Marcus, World Israel News

Yediot Ahronot publisher Arnon Mozes has been sued by the Israeli newspaper’s director for misappropriating company funds to pay for his legal defense in Case 2000, reported Israel Hayom on Wednesday.

Mozes and Prime Minister Benjamin Netanyahu are charged with fraud, breach of trust, and bribery in Case 2000.

Prosecutors allege that Netanyahu and Mozes engaged in an illegal quid pro quo deal, in which Netanyahu would push for legislation that would hurt Yediot Ahronot’s rival newspaper Israel Hayom in exchange for positive press coverage from Yediot Ahronot.

Yediot Ahronot’s director David Lieber filed the suit in Tel Aviv District Court, asking the court to find that Mozes violated his fiduciary duty to the newspaper by appropriating company funds to finance his personal legal expenses, including defense attorneys, in his ongoing criminal trial.

The lawsuit alleges that Mozes has already used more than 1.35 million shekels from Yediot Ahronot company funds to pay his attorneys’ fees.

The lawsuit claims that while Mozes’ contract does have an indemnification clause that allows Yediot Ahronot to pay for an employee’s legal expenses, it is only valid in cases where “legal action is due to an act the employee has taken in his working capacity at the company.”

Lieber’s lawyers wrote, ’“In this case, Mr. Mozes’s actions were not carried out in his work capacity, and they are of a very serious criminal nature.”

“According to the indictment, whether convicted or not, Mr. Mozes wanted to improve the value of the property he owned (and in fact hurt his main competitor, Israel Hayom), and even offered to sell positive coverage for that purpose.”

The lawsuit states that “the Company’s Board of Directors did not authorize Mr. Moses to offer bribes and/or sell positive coverage – nor authorize him to close any ‘deal’ with any party for the purpose of harming the newspaper’s principal competitor.”

Yediot Ahronot’s lawyers write that just one month before Case 2000 went public in late 2016, Mozes sought a new 12-year employment contract, despite having three years left on his contract at the time.

Mozes requested absolute control over the newspaper and its financial dealings for no less than an additional 12 years.

“The board was confused by Mozes’s request, as it was very sudden and made at an odd time, with three years left on his existing agreement.”

Mozes has not yet filed a defense letter.