Shlomo Filber, who was arrested this week along with top executives at Bezeq Telecom, had been a personal appointment of Netanyahu's to head the Communications Ministry.
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Police now suspect Bezeq received regulatory benefits, and
in return, Netanyahu received favourable media coverage on a
popular news website that is also controlled by Bezeq's former
chairperson.
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The Bezeq executives have denied the allegations. Israel's Ynet news website reported that Filber has now agreed to testify for the state in the case, a development that could further complicate things for Netanyahu as he battles mounting corruption allegations.
Israeli authorities were not immediately available to confirm that a deal with Filber had been reached.
On Tuesday, police alleged that Netanyahu's former spokesperson
tried to bribe a judge to drop a fraud case against Netanyahu's
wife. Netanyahu himself is suspect in two other investigations.
The right-wing leader, in office for 12 years since 1996, has denied wrongdoing in any of the cases, calling them a political "witch hunt".
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