Israel's government watchdog said Thursday he is opening an investigation into Prime Minister Benjamin Netanyahu's campaign and travel spending, sparking the first significant scandal in the leader's two years in office.
The state comptroller's investigation follows a Channel 10 TV report last week that said Netanyahu and his wife, Sara, took expensive flights, hotels and restaurant meals paid for by wealthy associates during the 10-year period between his first and second terms as prime minister.
The investigation does not pose any imminent danger to Netanyahu. Israel's comptroller, Micha Lindenstrauss, only has the power to recommend action, and his inquiry marks a preliminary stage. But if it concludes there was wrongdoing, the matter could be turned over to police and prosecutors.
Netanyahu was a private citizen during parts of the time in question, but he also held a series of senior government posts, including finance minister. The report raised questions about whether the donors were trying to gain influence with Netanyahu.
Netanyahu said the Channel 10 accusations were "fabricated and tainted with hypocrisy" and filed a libel suit against the channel.
"There are journalists who don't like me and don't like the fact that I am prime minister," he said in response to a question Wednesday with YouTube's World View Project. "The worst part is that to harm me they attack my wife."
In a rare, emotional interview Thursday with Israel's Channel 2 TV, Sara Netanyahu called the accusations "evil gossip." She said the family's expenses have not cost the Israeli taxpayer "a single shekel" and accused the media for singling them out while every other politicians acts the same.
Shlomo Raz, a spokesman for the state comptroller, said the office would look into possible conflicts of interest arising from private contributions to Netanyahu's primary election campaigns and funding of lavish travel expenses for Netanyahu and his family.
On Wednesday, a parliamentary panel gave the comptroller exceptionally broad powers of investigation in the case.
His office will be able to summon Israeli witnesses and demand they furnish documents. It has no such powers over the foreigners linked to the affair.
Channel 10 said it based its report on what it said was the premier's address book, pages of which it showed in the report, and other personal documents.
Israel's main opposition party, Kadima, has demanded that the attorney general to look into criminal and ethical violations listed in the Channel 10 TV report.
On Tuesday, Netanyahu filed $300,000 libel suits against Channel 10 and the Maariv daily for their reports.
He said Channel 10 falsely alleged that he failed to report contributions by foreign donors to the state comptroller. He also claimed that Maariv erroneously created the impression that Netanyahu and his wife paid $17,000 for a meal abroad, part of a pattern of extravagant behavior.
During and shortly after his first term as Israel's prime minister from 1996-1999, Netanyahu weathered several potential scandals and was never indicted.
Israeli leaders have had a recent history of financial scandals.
Netanyahu's predecessor, Ehud Olmert, was forced to resign over corruption charges. He is on trial on separate charges of accepting illicit funds from an American supporter and double-billing Jewish groups for trips abroad.