The defense tried to build on this conduct in connection with the ELA transaction, including raising arguments both with regard to the reliability of any of those involved on the part of IAI, and with regard to IAI's overall conduct. As we shall see below, the conduct in connection with the ELA transaction and the arguments raised on its basis do not change the conclusion, whether in relation to the coordination of the issue of the renewal of licenses or in relation to other charges.
- Against the background of the aforesaid rule, we will address the defense's arguments.
Reference to the defense's arguments
- In their summaries, Wei and Harel argued, inter alia, that the license renewal deal was fictitious, "tailor-made", that Wee's win was guaranteed in advance, that the license renewal was only part of the ELA deal, which was itself "tailor-made", and more. Some of the arguments revolved around the conduct of the license renewal company, some of which relied on the ELA transaction and the conduct within its definition, while the defense also sought to establish general arguments regarding the pricing proceedings in a civil appeal on the basis of the conduct in the ELA transaction.
Individual Claims in Relation to the Licensing Renewal Task Force
- The defense argued that the license renewal deal was part of the ELA transaction, in the sense of examining one component of the larger transaction, and that just as at the end of the day there was no pricing in the ELA deal, so too the ELA deal was nothing but fictitious pricing (e.g., paras. 530-531 of the Wii summaries; Oshri, p. 4612, paras. 7-8, p. 4613, paras. 24-27), although Oshri's words indicate that these are his hypotheses, in his arguments regarding the understanding of the matter in retrospect; See also Weinschel, p. 633, paras. 9-12).
This argument should be rejected.
The license renewal and the ELA transaction are two different transaction outlines (see paragraph 883 above). The attempt to turn them into part of a single package should be rejected in order to attribute the impropriety that adhered retroactively to the ELA deal . The renewal of licenses stood on its own. It is designed to receive quotes for annual license renewal for one year, 2012. At the time Weinschel sent the ELA to the companies – and in fact also when the proposals were received – in a civil appeal and the financier did not know whether at the end of the day there would be an ELA deal at all , and the proposals in the BLA were required in order to be able to enter into a deal for the maintenance of licenses for 2012, to the extent that it would be necessary. This is clearly evident from the testimony of Weinschel, who issued and managed the Licensing Renewal Division, as well as from the rest of the testimonies (see paragraph 887 above (in the third paragraph therein), and there is nothing in the testimony of Weinschel, at p. 633, paras. 9-12, p. 637, paras. 21-23, to change the matter). Oshri himself testified that the civil appeal was prima facie skeptical with respect to the model of the ELA transaction (ibid.; see also Harel's argument at para. 704 of its summaries that Winschel sought to clarify the maintenance price for the licenses for 2012 in case the ELA transaction was not executed). Nor was any basis laid for the fact that the proposals submitted within the framework of the ELA were used for the purpose of evaluating the feasibility of the ELA transaction or were even considered within the framework. This, too, undermines the defense's arguments and shows that there were various outlines of the transaction. The evidence shows that the license renewal agreement was conducted by Winschel, who sought to receive genuine offers, for the purpose of a possible engagement for the maintenance of licenses for 2012, in order to receive the best offer, while clarifying that the most important parameter in this context is the price (see paragraph 887 above (in the second paragraph there); Winschel – who did not know about the coordination – also tried to negotiate with Gilad and obtain an additional discount from Harel. P/87, p. 607, paras. 9-14). Menashe – who was the living spirit when it came to the ELA deal and the disqualification that adhered to it – was not involved at all in the license renewal campaign. He entered the picture later when the emphasis shifted to examining the ELA deal. In view of the aforesaid rule, the invalidation that was later adhered to the ELA transaction does not reflect on the license renewal policy or to justify or legitimize the coordination of the proposals in its framework. Nor is there any similarity between the coordination of the proposals behind the backs of a civil appeal in the Licensing Renewal Authority, and the improper conduct that Menashe led in the ELA deal.
- The defense argued that the ELA transaction was "tailor-made" for a loan, as was the case with the license renewal order (paras. 528-530 of the wai summaries). In this context, it was argued, inter alia, that the ELA transaction began at the initiative of Wii together with VMware (Koffler, p. 6592, Q. 18 - P. 6593, Q. 6), that it closed with Wii without a competitive proceeding, that the Civil Appeal preferred to work with Wii because of its technological advantage and not because of the price (the defense also referred to correspondence N/171 of 2007, and to the hypothesis raised there in relation to it, 2163, paras. 26-27; See also N/172), and for this reason the Civil Appeal did not purchase the software from Harel even though it had an agreement with the Civil Appeal in the matter, according to which it should have contacted Harel (N/44 (Agreement for the Purchase of VMware Software of November 11, 2009), Leshem, p. 2170, Q. 1 - P. 2171, Q. 3; the defense also referred to the Comptroller General's agreement (P/10)). On the basis of all of this, it was claimed that the project had pre-selected Wii for the ELA deal.
The argument should not be accepted and cannot be changed. The argument that the project pre-selected Bowie is not clear, since the ELA transaction revolved around lateral procurement for the civil appeal enterprises and not on procurement for the project. Moreover, even though in the end – and after Menashe entered the picture, the deal with Wei was closed without pricing – no foundation was laid for the fact that this was the intention in the first place. The evidence shows otherwise (see Oshri himself's testimony that the civil appeal was skeptical in the first instance with respect to the very engagement in the ELA transaction, p. 4621, paras. 11-17, and the Weinschel Committees, that Wee's victory was not guaranteed and there was no obligation to Wee, p. 618, s. 17 - p. 619, s. 18). The argument that Levi was a technological advantage for the purpose of the transaction in question was also unsubstantiated (see the testimony of Rezinsky, at p. 2548, S. - P. 2549, S. 5, Harel was no less professional than Wei; since we are dealing with software – off-the-shelf products (Weinschel, at pp. 603, 23-24) – it is doubtful whether there is a sufficient basis for the claim of a significant technological advantage; the attempt to infer a technological advantage is due to the fact that the civil appeal did not turn to Harel despite the agreement N/44 between the civil appeal and Harel regarding the VMware software. Ignoring the evidence that Levi and HP also had similar agreements, see N/369, N/370, Oshri testimony, p. 4616, paras. 1-6, p. 4620, paras. 1-3).