Both equally fake.
I don't see why both things can't be true.
Chabad in Israel wants to be on good terms with the new government, and does what they can (or what their American counterparts can) to get him a visa. If he would have come, he would have been treated with the respect given to any other member of the Israeli government in attendance.
But... that doesn't mean his attendance wouldn't have been a distraction, or pissed off some friends of Chabad. There likely would have been many questions asked and attention drawn, and his choice not to attend would likely generate a sigh of relief from many.