A Hollywood Mention From a Political Rival Livens Up Netanyahu’s Trial

The leader of Israel’s political opposition, Yair Lapid, testified on Monday in the long-running corruption trial of Prime Minister Benjamin Netanyahu, recounting how Mr. Netanyahu had lobbied him nearly a decade ago to back tax breaks favoring an influential Israeli film producer.

The claim is a small part of a yearslong prosecution in which Mr. Netanyahu is accused of granting political favors to several businessmen and media moguls in exchange for expensive gifts and positive news coverage, charges that he denies.

The appearance of Mr. Lapid — once a colleague of Mr. Netanyahu’s and now his nemesis — enlivened a slow-moving courtroom process that has largely receded into the background of Israeli public life since it began with great fanfare more than three years ago.

Mr. Lapid served as prime minister for several months last year, before losing power to Mr. Netanyahu, Israel’s longest-serving leader, in December.

Mr. Lapid briefly gave evidence about two short conversations with Mr. Netanyahu in 2013 and 2014, when he served as Mr. Netanyahu’s finance minister in a coalition government. Mr. Lapid said that Mr. Netanyahu twice had raised the possibility of extending tax exemptions for Israeli citizens who had returned to the country after living abroad, a mechanism that Mr. Lapid opposed.

The extension would have benefited Arnon Milchan, a producer of scores of major Hollywood films including “Fight Club” and “Pretty Woman.” Prosecutors say Mr. Milchan gave Mr. Netanyahu’s family expensive gifts, including cigars and Champagne, in exchange for political favors.

According to Mr. Lapid, Mr. Netanyahu twice described the tax exemption as “a good law.” But Mr. Netanyahu did not pursue the matter beyond those two exchanges, Mr. Lapid said. The prime minister gave the impression that he simply wanted to go through the motions of asking about it so that he could tell Mr. Milchan that he had tried, Mr. Lapid added.

“The whole issue was marginal in real time,” Mr. Lapid said, according to Kan, the Israeli public broadcaster. “It’s hard to remember all the details.”

The trial began in 2020 and will most likely not hinge on Mr. Lapid’s evidence: It is expected to last several more years and features several more accusations. Among other claims, prosecutors accuse Mr. Netanyahu of promising to pursue legislation that would create unfavorable business conditions for a newspaper owned by Sheldon Adelson, a billionaire supporter of Mr. Netanyahu and President Donald J. Trump, in exchange for positive coverage from one of the newspaper’s competitors.

Many Israelis have tuned out of the day-to-day proceedings, with a large proportion having already made up their minds about Mr. Netanyahu. His supporters view the trial as a trumped-up effort to delegitimize an elected prime minister, while his critics say it should disqualify him from office.

But regardless of its outcome, the trial has already caused unusual political instability. It has divided Israeli society almost equally between Mr. Netanyahu’s supporters and critics, making it difficult for either Mr. Netanyahu or opponents like Mr. Lapid to win a stable majority in Parliament. That has caused several successive governments to collapse prematurely, leading to five elections in less than four years.

The trial is also at the center of an ongoing dispute about the future of the Israeli judiciary.

Mr. Netanyahu’s coalition seeks to overhaul the court system, giving the government greater control over the selection of Supreme Court judges and diminishing the court’s power over Parliament. Mr. Netanyahu says the overhaul is necessary to reduce the influence of unelected judges over elected lawmakers, but his critics fear that the plan will ultimately allow him to end his trial. Mr. Netanyahu denies any such intention.

Mr. Lapid’s appearance highlighted the nuances beneath the surface of Israeli politics: Though he now seeks Mr. Netanyahu’s political downfall, Mr. Lapid was once his political ally — and socialized with and briefly worked for Mr. Milchan. Under cross-examination, Mr. Lapid recounted how he interviewed Mr. Milchan in the 1990s, during his previous career as a journalist, and even joined Mr. Milchan’s production company for several months.

“We remained friends after that,” Mr. Lapid said, according to Kan. “When he would come to Israel, we would meet for dinners. He is a charming man and I liked him.”

But that friendship did not extend to helping Mr. Milchan with his tax, Mr. Lapid said.

Gabby Sobelman contributed reporting from Rehovot, Israel, and Myra Noveck from Jerusalem.