Israel Aerospace Industries Corruption Scandal: Court Extends Detention of Two Key Figures by One Day

Police describe a widening case of 'systematic criminal conduct, deep corruption' at state-owned defense, aviation giant.

Israel Aerospace Industries corruption scandal: Anwar Saab, left, and Amal Assad in court on March 15, 2017.
Israel Aerospace Industries corruption scandal: Anwar Saab, left, and Amal Assad in court on March 15, 2017. Ilan Assayag

An Israeli court ordered the detention of two key figures in the Israel Aerospace Industries corruption probe extended by another day on Thursday. Meanwhile police proceeded with what they are calling a developing case of “systematic criminal conduct, deep corruption” at the state-owned company.

The Rishon Letzion District Court ordered Amal Assad, an IAI director, retired army brigadier general and a leader of Israel’s Druze community, be held for an additional day. He will remain under house arrest thereafter, the court said.

Anwar Saab, a retired colonel in the IDF and CEO of the IAI contractor DruzNet, was subject to the same order.

Assad and Saab are two of 13 people, including IAI employees and others connected with the company, suspected by the Israel Police’s Lahav 443 anticorruption unit of rigging bidding to favor certain subcontractors and suppliers in exchange for bribes allegedly laundered by a bank employee.

Police said they expect to make other arrests as the probe widens, and are seeking a witness to give state’s evidence.

DruzNet, a company set up in 2015 to serve as an IAI subcontractor, is one the key firms allegedly at the center of the affair, which the police have dubbed Case 630. However, police suspect a union official, whose name hasn’t been released, was the key player in the affair and “handled” the other suspects.

The investigation, which was conducted secretly in cooperation with the tax authorities and the Defense Ministry over the last several months, broke into public view on Wednesday with the arrests and raids on the homes and offices of the suspects.

The probe comes at an inopportune time for IAI, a maker of a wide range of aviation and defense products and one of Israel’s biggest companies, which has been seeking approval to sell shares to the public for the first time to raise badly needed capital.

Among other suspects whose custody was extended Thursday, Meir Ostrovski, who has worked at IAI for 40 years as a computer technician, was ordered held for an additional day. He is suspected of stealing aircraft engines and large supplies of food from company facilities.

The remand into custody of Shmuel Elbahari, another IAI employee, was extended until Monday. A day earlier Amos Ben-David was ordered into custody for six days on suspicion of unspecified offenses as manager for Bank Hapoalim’s IAI branch.