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Netanyahu is history

Published April 17, 1997 7:00PM (EDT)

barely a year in office, Israel's tough-talking Prime Minister Benjamin Netanyahu is about to lose his political life. He also could be seeing the inside of an Israeli prison.

In a 995-page report, Israeli police Wednesday recommended that government prosecutors indict Netanyahu for fraud and breach of trust in an influence-peddling scandal that took place during the first days of his administration.

Israeli Attorney General Edna Arbel is reviewing the report and is expected to decide whether to indict Netanyahu before the start of the Passover holiday next Monday. If Netanyahu is charged and convicted, he could face three years in prison.

Whatever the prosecutor's decision, the scandal has rocked Netanyahu's right-wing government to its foundations, leaving its future very much in doubt. An indictment would not force Netanyahu to resign, but if Netanyahu is charged, several of his allies have already said they will bolt the ruling coalition, depriving the prime minister of his 66-member majority in the 120-seat parliament.

Even if government prosecutors decide not to indict Netanyahu, others are likely to be charged, including his justice minister, Tsahi Hanegbi, and a top political aide, Avigdor Lieberman. Such charges would leave his government fatally tainted. Defections within the coalition would only be a matter of time.

The bombshell police report does not come as a total surprise, particularly not in Israel. The scandal became public in January, when Israel TV reported that Netanyahu had initially appointed Jerusalem lawyer Roni Bar-on as his attorney general at the insistence of a Netanyahu aide, Arye Deri, who was on trial for corruption. The plan was that Bar-on would allow a lenient plea-bargain for Deri, in return for which Deri's Shas party, a crucial coalition partner, would support Netanyahu's policy of Israeli withdrawal from the West Bank town of Hebron.

Bar-on, an undistinguished attorney and well-known gambler, got the job, but his appointment led to a torrent of complaints that he was unfit for the job, and he resigned after less than 12 hours.

News of the Israeli police's recommendation broke as U.S. Special Mideast Envoy Dennis Ross arrived in the Jewish state to try to jump-start the stalled Middle East peace process. With Netanyahu immersed in a full-blown political scandal, that prospect seems pretty remote.

With a criminal indictment looming over Netanyahu's head, it is also doubtful that the opposition Labor Party will now, as Netanyahu has hinted, join Likud in a national unity government to nudge the peace process forward. The United States favors such a broad coalition, since it would relieve Netanyahu of his reliance on his hard-line government partners. But now, as one diplomat put it Wednesday, any such move by Labor would be "an act of political necrophilia."

If Netanyahu's government falls, new elections for prime minister would be held within 90 days. There would be no corresponding elections for the Knesset, Israel's parliament.

Next month, the Labor Party is scheduled to hold its convention to elect a new leader. Ehud Barak, a former chief of staff and foreign minister in the last Labor government, is the favorite to replace current Labor chief Shimon Peres. Barak was Netanyahu's commander in the army and has said he can put the peace process back on track by adhering to the principles hammered out by his mentor, Yitzhak Rabin, who was assassinated in 1995.
April 17, 1997

Jonathan Broder reports regularly for Salon. He is also Washington correspondent for the Jerusalem Report.

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scalpel please, nurse

For Apple, another huge loss may just be
the darkness before the dawn -- if it is willing
to undergo drastic surgery.


the corporate sharks are circling and the red stuff in the water seems more like blood than ink.

Apple Computer reported a $708 million quarterly loss late Wednesday. While much of it was used to pay for the acquisition of Steve Jobs' NeXT Software, the Cupertino, Calif., company's revenues dropped a mighty 27 percent, from $2.2 billion to $1.6 billion.

As bleak as all this looks, Apple has never had a better opportunity to survive and prosper, provided its top managers are willing -- or forced -- to make some intelligent but drastic fundamental changes in its positioning.

First, the bad news. Apple's once-touted cash reserves, thanks to back-to-back losses stretching over most of the last year, have dropped perilously low. This, in turn, makes Apple a far more attractive candidate than ever before for a buyout or merger.

Which is exactly what mogul-cum-gadfly Larry Ellison, founder and CEO of huge database-maker Oracle Corp., had in mind when he lofted his takeover trial balloon in a newspaper interview three weeks ago. It's difficult to gauge how serious Ellison is, but one thing is sure: Apple CEO Gil Amelio, who would be instantly replaced in an Ellison-run Apple -- probably by Steve Jobs -- will fight tooth and nail against it.

In Japan earlier this week, Ellison told a trade show audience that if he does acquire Apple, he would scrap the manufacturing of its MacOS-based computer systems and turn the company's attention to building his own personal vision: network computers (NCs). NCs are diskless computer systems attached to larger computer servers -- which parcel out data and programs to the user as needed. Oracle, which serves up enormous data-based programs, would benefit enormously from NCs. The benefits accruing to the average consumer, however, are far more debatable.

Seeking to shore up its shrinking share of the profitable hardware business, Apple executives hinted recently that the licensing fees paid by their clone partners -- Motorola, PowerComputing and IBM (which doesn't yet make Mac clones but which does sub-license the MacOS to other computer makers) -- would be significantly increased.

Bad idea, as IBM and PowerComputing were quick to remind Cupertino executives. Apple needs these clone-makers, despite the damage they appear to do to Apple's bottom line, for one primary reason: They give the MacOS an existence independent of Apple Computer Inc., and thus sustain the Macintosh vision. This gives Apple and its products and designs more credence among worried software developers and increasingly skeptical consumers. People don't mind investing in the MacOS if they know it will be around, regardless of what ends up happening to Apple Computer as a company.

What really needs to happen is for Apple to get out of the hardware business altogether and focus its energies on software. It should sell Ellison what he really wants -- its manufacturing facilities. Then it should refocus its efforts on the operating system and application software, where profit margins are substantially higher than they are in the hardware arena. In doing so, they would be shifting strategies and following the Microsoft model rather than the IBM model. Microsoft doesn't build boxes; it creates great software for other people's boxes. IBM's personal-computer group still builds its own boxes, and its clone-pressured margins are razor-thin. It doesn't take a rocket scientist to figure out which of those companies has been more successful on the desktop. Making this shift would also allow Apple to boost fees on its OS licensing deals. And everybody wins.

The timing has rarely been better for Apple to make such a dramatic move. Consider these factors:

  • a deep-pockets suitor who really wants the hardware side of things;
  • a potential new leader in Next's Steve Jobs, Apple's co-founder, who has been through the pain of divesting a computer company of its CPU manufacturing plans;
  • clone-makers who would be happy to pay steeper licensing fees for the MacOS if they knew they wouldn't have to compete with Apple's boxes in the marketplace.

In taking these bold steps, Apple could remold itself as the innovative software company it was when it began life. In fact, the hardware -- as high-quality as it is -- has always been just a vessel designed to carry the really precious cargo: the MacOS. And, for all its not-invented-here syndrome, Apple recently showed that it doesn't have a problem letting other people build their peripherals: All of Apple's branded printers are being taken over by Hewlett-Packard.

If you listen carefully to what little pro-Apple press there is these days (such as National Public Radio's April 11 broadcast), what you hear is that Apple's computers are still the easiest to use; that's a reflection of its operating system, not its hardware. You'll also hear about its some 20 million-strong army of loyal followers and users. Those people are for the most part fans of the MacOS, not of the boxes themselves.

Apple, having bought NeXT, is now busily building what is being touted as a genuinely "next-generation" operating system, code-named Rhapsody, aimed at putting the "insanely great" company back on top of the computing world. A radical slim-down-and-focus approach is an essential step in getting there. Apple shouldn't waste any more time.

By Jonathan Broder

Jonathan Broder is Salon's Washington correspondent.

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