Corruption probe roils Israeli election campaign

JERUSALEM -- A far-reaching Israeli corruption investigation that has roped in 30 public figures and politicians linked to a powerful, hard-line party has shaken up the campaign ahead of March elections and appears to have tipped the scales in favor of Prime Minister Benjamin Netanyahu.

The Yisrael Beitenu party, led by Israel's polarizing foreign minister, Avigdor Lieberman, has been a central player in Israel's coalition politics for over a decade and has been an important partner in the last two governments under Netanyahu.

The yearlong investigation could play out for months before any indictments are served, if at all, but a trial is already underway in the court of public opinion -- with voters set to decide the fate of the once robust party in March 17 elections.

"The party is going through a massive earthquake," said Avraham Diskin, a political scientist at the Hebrew University of Jerusalem. "It's clear that it is in very big danger."

This is not the first time Yisrael Beitenu has been mired in graft accusations. Lieberman himself was for years at the center of a corruption probe, which forced him to step down as foreign minister and nearly derailed his political career. Lieberman returned to office after being cleared last year of the charges, which claimed he tried to advance the career of a former diplomat who relayed information to him about a separate criminal investigation into his business dealings.

The latest probe targets top party figures, including a former government minister and a serving deputy minister, of nepotism and illegally transferring funds to supporters. Lieberman has not been named in the new probe and has said the investigation is politically motivated.

"Time and again and without exception, in every election, 'unknown forces' get involved and harm Yisrael Beitenu's right to participate fairly," Lieberman said in a statement. "Every time we have known how to deal with it and we came out stronger. This time we will also be strengthened."

New polls have not been released since the investigation was made public last week. But even before then, the party had begun to shed voters, with polls forecasting a drop from its current 13 seats to about nine in the 120-seat parliament.

In a race where the swing of even a single seat could affect the outcome, Lieberman is something of a wild card.

Just before the corruption probe was revealed, Lieberman, who traditionally takes a hard line toward the Palestinians, warned that Israel would face a "diplomatic tsunami" without an agreement and said he had not ruled out joining a more dovish coalition. With the comments, Lieberman appeared to be setting himself up to play a pivotal role in the formation of the next government.

Political analyst Hanan Kristal said any damage caused by the corruption allegations is expected to benefit Netanyahu, with voters likely to be pulled toward his right-wing Likud party, which has a similar nationalist ideology.

"Yisrael Beitenu's imbroglio is Bibi's good news," he said, referring to Netanyahu by his nickname.

Lieberman, 56, rose to prominence as the engineer of Netanyahu's first successful run for prime minister in 1996, and he later became Netanyahu's chief of staff. He lives in a West Bank settlement.

Lieberman, who emigrated from Moldova three decades ago, created the Yisrael Beitenu party in 1999 to represent the more than 1 million immigrants from the former Soviet Union. The party has gained popularity through a hard-line stance that has appealed to nationalistic Israelis.

Lieberman has questioned the loyalty of Israel's Arab minority, expressed doubt about the Palestinians' commitment to peace and confronted Israel's foreign critics. The tough-talking message has at times alienated Israel's allies while also making him an influential voice at home. His party has served in several governments, with Yisrael Beitenu and Netanyahu's Likud running on a joint list in 2013, garnering 31 seats together.

The party's recent drop in the polls appears to be the result of several factors, including changes in the traditional Russian-speaking voter base -- whose younger members are more integrated in Israeli society -- and Lieberman's new signs of moderation.

Ben Caspit, a political commentator, said Lieberman's appeal to more centrist voters may backfire because of the corruption scandal, with those voters unlikely to cast their ballots for a party stained by graft.

"Lieberman's goal was to create a situation in which a government cannot be formed without him," Caspit wrote in the Maariv daily. "And then came the police investigators."