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Arnon Milchan Will Not Face Corruption Charges in Israel

In a surprise decision, Israel’s attorney general has announced that he will not press charges against Hollywood producer Arnon Milchan for his central role in a case of alleged corruption involving Prime Minister Benjamin Netanyahu.

Israeli police had recommended last year that Milchan, the head of New Regency Productions, be indicted on bribery charges stemming from gifts he acknowledges giving to Netanyahu, which the prime minister says were merely presents between friends. But on Thursday evening, Atty. Gen. Avichai Mandelblit said, without giving a reason, that the case against Milchan would be closed.

While Milchan himself won’t be charged, Netanyahu is expected to be indicted on charges of bribery, fraud and breach of trust in three different cases, including the one involving Milchan, which is known in Israel both as Case 1000 and the Illegal Gifts Affair.

The attorney general said Thursday that, over a period of five years, Milchan provided the Netanyahu family with close to 500,000 shekels’ worth ($135,000) of champagne, cigars and jewelry intended as a bribe. In return, Mandelblit said, Netanyahu attempted to help the billionaire receive a visa to work in the U.S. and avoid paying Israeli taxes, among other allegations.

Case 1000 also states that the Netanyahu family wrongfully accepted 230,000 shekels’ worth ($64,000) of champagne and cigars from Australian billionaire James Packer, the former business partner of Brett Ratner.

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In an interview with Israel’s Channel 12 News on Sunday – the eve of the Oscars, where “Bohemian Rhapsody,” which he helped produce, took home four prizes – Milchan said he was hurt by the treatment he’s received from Israel.

“I’m sad – sad that they don’t remember all I did for this country,” Milchan said, referring to his time working as a secret agent and arms dealer for Israel in the 1960s. “I wake up in the morning sad; I go to sleep at night sad. I feel wounded….Maybe they’ll see the damage they’ve done to me.”

Milchan also faces legal woes in the U.S., where big-name investors in the Warren Beatty flop “Rules Don’t Apply” have sued him for $50 million in a fraud complaint that says he failed to market the film. The suit alleges that he was so distracted by Israel’s investigation into his dealings with Netanyahu that he turned over the marketing to his son, who was not up to the task. Milchan had earlier sued the investors to recover the $19 million in distribution costs that he contends they owe him.

Netanyahu is also facing charges of fraud and bribery in two other cases, both of which allege that he tried to influence media coverage of himself and advance the business interests of his associates.

Netanyahu is facing re-election in April and has vowed not to step aside despite the looming indictment. Polls indicate he has a high chance of being re-elected even if he is charged.

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