Netanyahu and Obama find a shared interest — screwing the Israeli people

Despite the years of endless clashes of both personality and policy, this dramatic political saga really won’t surprise you one bit.

Prime Minister Netanyahu and President Obama in the Oval Office, March 2012 (photo: The White House / Flickr)
Prime Minister Netanyahu and President Obama in the Oval Office, March 2012 (White House photo)

The rather lousy relationship between Israeli Prime Minister Netanyahu and U.S. President Obama has been the subject of much discussion in recent weeks as former Ambassador Michael Oren brought already ridiculous levels of behind-the-scenes speculation to new lows. Years of public clashes over settlement construction, peace talks, negotiations with Iran, and more, have provided endless fodder fueling public clashes between the two leaders.

There is one area, however, where President Obama and Prime Minister Netanyahu have suddenly, and perhaps surprisingly to outsiders, found their interests aligned.

American Ambassador to Israel Dan Shapiro attempted to use his influence to determine the outcome of a fateful vote in the Israeli Knesset this week. It is a rather bizarre political story with surprising actors being asked to play even more surprising roles. It is a story of foreign intervention into questions of domestic Israeli policy in ways that upend the narrative regularly spun by right-wing Israelis. It is a story that shouldn’t surprise anybody, and yet surprised nearly everybody.

The story starts with two of the most common ingredients found in nearly all Middle Eastern dramas: fossil fuels and American economic interests. You see, about six years ago a surprising discovery was made off of Israel’s coast— the largest natural gas reserves in the Mediterranean. Almost immediately, people started talking about the discovery as a game-changer, both geopolitically in the region, but also for Israel’s economy. The gas was supposed to be enough to domestic supply in Israel for decades.

The Tamar natural gas platform (Photo: Noble Energy)
A natural gas platform over the Tamar natural gas field off of Israel’s coast, one of two major gas discoveries made in Israeli waters in recent years by a consortium of companies led by Texas-based Nobel Energy. (Photo: Noble Energy)

Unfortunately for most Israelis, the contracts to search for said fossil fuels were negotiated decades earlier, at a time when nobody took seriously the prospects of actually finding any gas. Thus, as economic incentive dictates, the increased economic risk for the energy companies was contractually offset by massive profit margins in the unlikely situation that gas was discovered. So what did Israel do when gas was discovered? It unilaterally “renegotiated” the contracts to give itself a significantly greater portion of future profits. The energy companies were not happy but they ultimately agreed to the new terms.

In the five years that have passed, all but a few thousand Israelis forgot about the game-changing importance of the gas discovery. People assumed that they, the citizens, were getting ripped off in the whole affair, because, well, that’s the default Israeli position — to assume you’re being ripped off somehow. Yet those concerns consistently took a back seat to more tangible and immediate issues like the price of housing and food, and, you know, wars and boycotts and the ayatollahs.

But let’s fast-forward to today. With surprising attentiveness to at least part of some of the interests of the Israeli people, the Netanyahu government renegotiated a new financial and economic framework for the gas, its distribution, sale, pricing, ownership stakes and competitive guarantees. Except, there was a problem with that last one; Israel’s anti-trust commissioner refused to sign off on the deal. Then, this month, the only man who could overrule the anti-trust commissioner, Shas Chairman Aryeh Deri, refused to do so. So Benjamin Netanyahu did what any good Middle Eastern politician — or rather, any politician at all — would do in such a bind: he declared the natural gas deal a matter of national security, allowing him to overrule the anti-trust commissioner himself and put his plan to a vote.

However, despite a massive haul of 30 mandates in recent elections, Netanyahu only managed to cobble together a razor-thin coalition of 61 out of 120 Knesset seats. Even worse for the fourth-term prime minister, three of his ministers announced that they were recusing themselves from the entire matter because of close personal relationships to stakeholders in the deal. So Netanyahu was short a majority to move his plan along.

Benjamin Netanyahu gives a victory speech on election night, March 18, 2015. (Photo: +972 Magazine)
Prime Minister Benjamin Netanyahu gives a victory speech on election night, March 18, 2015. (Photo: +972 Magazine)

This is where it gets interesting. One of the two majority stakeholders in the natural gas deal, along with Israeli firm Delek, is Texas-based Nobel Energy. Now, as we know from then-historian Michael Oren’s fascinating book, Power, Faith, and Fantasy: America in the Middle East: 1776 to the Present, American interests in the Middle East have always been a little bit about religious obsession and a-lot-a-bit about American economic interest. Washington’s relationship with Israel has historically fallen along the religious/ideological end of that spectrum, but that is not to say that economic interests are in any way marginal.

But let’s get back to the Knesset.

Netanyahu was short three votes and the opposition was coalescing around its energetic determination to stop the prime minister’s plan. The only votes in play, it seemed, might be the Joint List, the combined slate of Arab parties. The Joint List, however, is adamantly opposed to everything Netanyahu. Since Election Day, the latter has gone after their and their constituents’ very right to participate in the democratic system. Most recently, the prime minister said nothing when one of his deputy ministers suggested they surrender their citizenship.

Joint List chairman Ayman Odeh stands in front of ultra-Orthodox MKs in the Knesset. (Knesset photo)
Joint List chairman Ayman Odeh stands in front of ultra-Orthodox MKs, Economy Minister Aryeh Deri (bottom-left), and freshman MK Michael Oren (top-left) in the Knesset. (Knesset website)

The thing is, the Joint List doesn’t have any love for Opposition Leader Yitzhak Herzog either. Herzog attempted to disqualify a Joint List candidate from even running in the elections, and just this past week, instructed his entire ‘Zionist Camp’ to abstain from voting on a law that forbids “family unification” for Palestinian citizens of Israel.

So the American ambassador attempted to tip the scales in Netanyahu’s favor by enlisting the one political group that hates him most. Stopping short of confirming the affair, a U.S. embassy statement released to Haaretz emphasized that Washington, “hope[s] that Israel will reach an arrangement that will allow the development of its natural gas resources.”

“We are proud of the contributions that American companies are making to bring cleaner and more efficient energy resources the Israel,” the statement read. “The specifics of any arrangement are, of course, a matter for the Israeli government and people to decide, but we have always been open with our Israeli friends about the economic, security, and commercial benefits…”

On the night of the vote, which was ultimately postponed once Netanyahu realized he had no majority, a spokesperson for the Joint List reassured that, “of course the Joint List will vote against Netanyahu’s policies on [natural] gas.” The slate is “independent and not swayed by pressure from tycoons like the Netanyahu government,” he added.

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