On the waterfront
Few members of the public know his name but Alon Hassan is the real boss of Israel's largest maritime port, in Ashdod. The head of one of the port workers committees, Hassan can stop work in order to celebrate a family event, disrupt it to preserve wage benefits and bend the will of regulators with a single phone call.
November 15, 2006, looked like being a rough day for Alon Hassan, the leader of a workers committee at the port of Ashdod. Not long before, Daniel Gedj, the owner of Daniel Group (a company that unloads vehicles from ships), had complained to the police that Hassan had threatened him and tried to blackmail him in connection with his continued activity at the port, which had expanded to include vehicle storage. In the investigation, the police took testimony from the port's CEO, Yehoshua "Shuki" Sagis, and the port's management hired a lawyer to represent it. Hassan himself was questioned under caution, and had been summoned to the headquarters of the national fraud unit, in Bat Yam, for a meeting with Gedj.
But in the end, Hassan - whose official title is chairman of the mechanical equipment workers committee - did not have to face Gedj in the police station. Gedj died suddenly, on the eve of the confrontation, at the age of 44. Two weeks earlier, he had suffered a knee fracture when he slipped on the ramp of a ship and was hospitalized. He died while recuperating at home, apparently from a pulmonary embolism. In the wake of his death, the investigation against Hassan was called off, due to lack of evidence.
As a result, many members of the port's directorate did not have to give evidence. Even now, five years after the events - and even though most of them no longer work for the port - these senior officials refuse to talk. They include Sagis, who is still the CEO; the special lawyer hired by management; Gedj's widow, Malki (Malkita ), who runs the company he founded; and his brother Motti, who works with her. The truth is that they have no reason to talk, say people who are familiar with events, as well as owners of companies that operate at Ashdod Port, because they still work at the port and it would be counterproductive for them to get on the wrong side of Hassan.
Hassan was never charged with blackmail, and the Gedj episode remains unresolved. But the repression of that case and the sweeping fear of everyone involved about "making Hassan angry" is perhaps the best indication of the way Israel's major maritime gateway - through which half its foreign trade passes - is managed. One man, who heads a powerful workers committee, controls the docks and decides who will work there, and when. The cost to the economy is immense. "Hassan is the real CEO of the port" is a constant refrain from clients of the port and senior officials in government ministries. "Everyone is afraid to mess with him."
For the past six years - since the reform of Israel's docks turned the port of Ashdod into one of the country's largest government corporations - Hassan has set the rules on the waterfront. He exerts pressure on regulators, tells ministers and ministerial director generals what he thinks of them and shuts down work at the port with a phone call. As the Trajtenberg committee on socioeconomic change found in regard to the country's ports, the resulting inefficiency costs the Israeli economy hundreds of millions of shekels a year.
An investigative report by Haaretz turns up a whole series of affairs in which Hassan is involved: a legal suit in which he effectively declares that he committed tax fraud; the private companies he has established and the suits filed against one of them; a grenade thrown at his home; the testimony he gave in support of a friend and business partner - who is also a port employee - when the latter was tried (and convicted ) of arranging for a restaurant he owned to be set on fire, an event that cost the arsonist his life. These and other events are interwoven with Hassan's day-to-day activity, which is aimed at preserving the material well-being of a group of employees, each of whom earns an average salary of NIS 400,000 a year - more than 90 percent of the country's workers.
'Not afraid of anyone'
Although Alon Hassan's walled home in Ashdod is not in the same league as the estates in Arsuf or Savyon, its two floors and outdoor swimming pool reflect its owner's success. Hassan, who grosses NIS 570,000 a year, puffs on a cigar as he hosts his visitor. He has a large diamond ring on one finger. Afterward, to drive to the port for a tour, he will be able to choose from three cars that are at his disposal and parked next to his house: two of them owned by him - an Audi jeep and a Honda jeep - and a company car.
Hassan moved here with his wife Sima and their four children four years ago. Not long afterward, the tranquillity of the neighborhood of villas was disturbed: On November 27, 2009, Sima Hassan found a stun grenade with the pin removed in the yard. It wasn't the first time a grenade had been thrown at a private home in Ashdod. The local police have become used to such events - a grenade was once thrown at the home of the mayor, Yehiel Lasri - but have rarely succeeded in apprehending the perpetrators. The grenade aimed at the Hassans was no exception. The police eventually closed the case under the rubric of "offender unknown."
According to Hassan, "the police know exactly who threw the grenade" and also that someone was trying to scare him - in vain. "I am not afraid of anyone," he declares. Still, just to be on the safe side, he added more security cameras around the house, reinforced the wall and made greater use of his beloved German shepherd dog, King. On one occasion, the dog landed its owner in court when it attacked a woman who lives in the neighborhood. Hassan was sentenced to 100 hours of community service and fined thousands of shekels. He asked the court to stretch the community service time over a few months, explaining that his frequent work trips abroad made it impossible for him "to commit to a regular number of weekly hours."
That was not quite accurate. In the past two years he has made only one work-related trip abroad. In another sense, though, every day when Hassan goes to work in the port, he is actually going to a different country, a territory with its own rules, a place where strikes and industrial sanctions have become a vital tool and a weapon of first resort.
Hassan, 41, began working at the port some 20 years ago, joining a crew as a "continuing son," a distinctive track of legalized nepotism that exists to this day in government companies. Indeed, as of December 2009, about 40 percent of Ashdod Port employees were connected by family ties. Hassan, though, had a special connection: His father, Emil, a Likud "vote contractor" - referring to party operatives who recruit bloc voters - was a strongman at the port, the chairman of the small but influential foremen's committee. Simultaneously Emil Hassan took his first steps in the business world, investing in real estate (Ashdod Beach Apartment Hotel, among others ) and becoming active in the "gray market," in which loans are given at exorbitant interest rates.
Alon Hassan took a similar route. He says he never dreamed of working in the port but of entering business. However, his father persuaded him to follow in his footsteps. "The port will not get in the way of your business," he told his son, and Hassan - who considers his father his best friend - took the advice to heart. In 1998, at the age of 28, he was elected to the mechanical equipment workers committee ("My dad pushed me to it"), and five years later he was elected chairman of the committee, which is one of the two strongest workers committees among the nine that operate in the port.
Since then he has been reelected twice and has consolidated his power, becoming the labor organizer most identified with the port. He is now a member of the port's manufacturing committees - bodies consisting of two members of management and two workers' representatives, which set policy on every subject - and behaves like a partner of equal weight to management. Sometimes like the stronger partner.
Now, on this intermediate day of Sukkot, Hassan is hosting visitors to his kingdom. There is not much activity in the port. Hassan is in his room, in the offices of the mechanical equipment workers committee. The walls are covered with photographs of rabbis, and announcements of celebration dates in memory of rabbis being held in Morocco. The prevailing quiet is suddenly interrupted by loud shouts. Hassan, holding a phone close to his ear, is dealing with another dispute in the port. "You will lose in any case. What will you get out of it? I will tear you apart in other ways. Do you take me for some kind of patsy or something?" he shouts at his interlocutor. Then, immediately afterward, he checks one of his two cellular phones and says regretfully, "I don't get it. Gilad Shalit comes back and the stock market opens lower?"
Not far from the committee's offices, next to the wharf of Jubilee Port, lie the fish farms of the Ardag and Dag Suf companies, against which Hassan has been waging an uncompromising struggle for months, demanding that they employ port workers. This morning, Hassan leads his guest on a tour of the fish farms, and his presence generates instant unease among the staff there. They follow his car with their eyes. One of them approaches the car and waits, with submissive patience, until Hassan finishes another phone call. "Mr. Hassan, if we knew you were coming we would have laid out a red carpet," he says, when Hassan at last opens the car window, and then immediately adds, apprehensively, "Is everything alright?"
From Hassan's viewpoint, everything is perfectly alright. The description of the port he offers his guests gives the impression of a well-oiled machine. "The port is now the largest in Israel and it is efficient, prosperous and profitable. We see ourselves as one organization of employees and management, because that is how we will be able to move ahead," he says, the words rolling off his tongue. "It's true that we have occasional disagreements with management, but the main thing is the cooperation, which we do in the best possible and cleanest way. The workers give their soul to the job, and they get a salary on the one hand and fulfill their duty on the other. And I see myself as part of the success of this port."
But Hassan is being imprecise again. Ashdod Port has indeed become more streamlined in recent years and is now Israel's largest port, handling 18 million tons of goods a year. But the chronology of the current year is dogged by strikes, industrial sanctions and work disruptions.
The strikes and disruptions began in January and have continued with almost monthly frequency. Some of them took place in conjunction with the other two maritime ports, Eilat and Haifa, and were backed by the Histadrut labor federation, but others were local initiatives in Ashdod under Hassan's leadership. In some cases the motive was not workers' rights but simply family celebrations. A couple of months ago, Hassan's good friend from the mechanical equipment workers committee, Alon Mualem, was married. The wedding of "little Alon," as he is known to his buddies - to distinguish him from Hassan - was held on a hot August evening. The workers abandoned the port in their masses to attend. Management cooperated. A special circular distributed by management referred vaguely to "a large-scale event that requires changes and adjustments," and thanked the port's clients for their understanding.
It was not the first time the port was effectively shut down for a family celebration of someone close to Alon Hassan. In the past four years, the family of "big Alon" has shut down activity in the port three times. Twice for bat mitzvahs of Alon Hassan's daughters - at which the workers were treated to performances by the singers Lior Narkis and Moshe Peretz - and once for his sister's wedding. "The situation in Israel's maritime ports is that of a Third World country, unparalleled in the Western world," says the CEO of a large food company, which is one of the port's clients. "To shut down a port because someone is getting married or holding a bat mitzvah for his daughter? I am ashamed to tell people I work with overseas about this. And when I do tell them, they say, 'It can't be.'"
Hassan doesn't understand why people are upset. He is angry at the visitors who asked about management's cooperation. "Nothing was hurt, you know. In the shifts before and after, we worked nonstop with twice the number of workers. I compensated for it and we made up the lost time," he says bitterly. "Contrary to reports, not one truck waited at the entrance to the port at the time. And anyway, there are no trucks here at night. In another two and a half years, my son will celebrate his bar mitzvah. Let's see what will happen if there is no arrangement with management. Do you know what will happen? No one will report for work. Not A shift, not B shift and not C shift."
The sirloin crisis
The family events were at least short, something that cannot be said of the strikes, both the full-scale and work-to-rule varieties. The most recent work-to-rule industrial action this year, which was dubbed the "sirloin crisis," dragged on for two full months and ended only when the Finance Ministry retracted its initiative to annul the coupons for steak restaurants in Ashdod that the workers got as bonuses for exceeding the productivity norm.
That benefit cost the port NIS 3.7 million in 2010, money that came from taxpayers' pockets. The port's internal comptroller also found that CEO Sagis had signed this agreement with the workers without the approval of the board of directors or the Government Companies Authority. The treasury even believed for a moment that it had found a way to cut the cost of the wages paid to port employees, which account for half the port's annual revenues of about NIS 1 billion.
At the end of two wearying months, the president of the National Labor Court, Judge Nili Arad, sent the treasury into the lion's den, instructing its representatives to reach a compromise with the workers, namely Hassan. Another major victory for the workers followed soon after. Under the compromise, the coupons arrangement was canceled but was replaced by an upgraded plan: a gradually increasing financial incentive which, by 2013, will cost the treasury NIS 5.2 million a year.
This was Hassan's first triumph over the treasury. At the beginning of the year he negotiated a salary increase for the workers but wasn't pleased with the Foreign Ministry's offer. Without giving the matter a second thought, he called his colleagues directly from a meeting with the treasury's director of wages. "Stop working," he ordered them. The treasury thereupon upped its offer of an increase from 2.5 percent to 6 percent over two years.
"The Ashdod union was always very strong, as everyone knows," says a person who has worked in the port for years. "But no chairman even came close to Alon Hassan. He is exploiting his strength to augment his power. He is one of the cleverest people I know, and he knows everything. He knows every last clause in the labor agreement better than any economist in the treasury, and he knows how to extract money from everything." Others are appalled by the damage these power games cause and by the constant uncertainty, the impossibility of knowing "whether a ship will depart, or when and how it will be handled." So entrenched is the image of the omnipotent Hassan among the port's clients that many of them admit to harboring an almost primeval fear of his possible reaction to a complaint they might voice.
"Our business is completely dependent on Hassan," says an industrialist who works with the port. "He can wreak havoc with the activity of the companies that use the port. He can make the crews undertake work-to-rule sanctions and slow down the pace of the work. So no one wants to take him on, to complain, to clash with him." The CEO of another big company projects a similar message. "It's very simple," he replies when asked why he will not be interviewed for attribution. "I am afraid that the workers will hurt my cargoes. I don't want them to shunt my ships aside. As it is, because of the industrial sanctions and the inefficiency in the ports, ships have to wait in line for three days and even a week, whereas in other ports they are unloaded within a few hours."
I put it to Hassan that many people involved with the port are afraid of him; that they are not satisfied but are afraid to complain. "The true situation is far from that," he says. "I respect the clients and help them. They can come to me when there is a problem - they are my top priority. If they will be satisfied, everyone will be satisfied."
But they are afraid that you will instruct the workers to take action that will harm their interests. "The workers are me. And they do everything as well as they can," says Hassan. "Maybe those who complain are crybabies."
Hassan doesn't like crybabies, but he is the one who can determine who will "cry" and who will not, who will suffer in a strike and who will evade its damage. The port of Ashdod, like the country's other ports, has a committee that deals with special cases in periods of strikes and slowdowns, particularly with military and medical items. It might have been thought that this mechanism would operate on an official basis, subject to the port management. In practice, the Histadrut was responsible for making these decisions, but transferred its responsibility to Hassan. For the past two years, Hassan has served as the acting chairman of the committee, with the authorization of Avi Edri, the chairman of the transport workers union and, according to Hassan, a good friend.
Senior figures in the industry say that the committee's decisions were not always logical. One of the companies that attracted their attention, as it did the attention of port clients, was Ikea. Port sources point out that the company, which is represented in Israel by Matthew Bronfman, requested the release of five container ships during the strike that broke out at the beginning of the year. Even though Scandinavian furniture and kitchenware might be considered emergency equipment only in an atomic shelter, the committee, under Hassan, approved the request.
Hassan himself has an explanation relating to another strike, from 2010. "Before the strike, just after the labor dispute was declared, Ikea CEO Shlomi Gabay invited me to meet with him, together with Shuki Sagis, the port CEO," Hassan relates. "Ikea was about to open its store in Rishon Letzion and it was explained to me that its situation was sensitive. They had been working on the new store for a long time, the merchandise was supposed to arrive, and he, a loyal client of the port of Ashdod, asked us to be considerate of the sensitive situation and allow the Ikea cargo to enter if a strike were to erupt. I gave him my word that he would not be affected. And Sagis was also present."
The Ikea shipment was declared an exception to the strike - but there is another company whose cargo gets special handling even in the port's everyday operations, according to its employees. "We had a special relationship with the port workers," says a former senior official in Agrexco, the agricultural export company, which was recently placed in receivership. "There was tremendous cooperation. Sometimes, when a ship needed another hour's work and it was time for a change of shifts at the port, they would go on working. The workers went out of their way and did unconventional things, because they understood that the farmers are blue-collar people like them, and that produce that is delayed can turn to garbage and hurt farming families."
That solidarity among workers might sound impressive, especially in view of the fact that many port clients complain that the tools somehow slip out of the workers' hands as soon as they reach their wage ceiling (the bonus level). But another fact overshadows the fine impression created by the senior source's words: Agrexco, a client of the port, was also a client of a private transportation company owned by Alon Hassan, a duality that is a potential conflict of interest.
Hassan established his company, Ben Idan Movers, in 2010. He is a codirector together with Yigal Gossland, a heavy equipment instructor at the port with a salary of NIS 40,000 a month. The company is less than two years old but has already achieved enormous success. Its revenues last year, in an eight-month period, were NIS 350,000, and this year they are about NIS 1.5 million. Agrexco paid NIS 300,000 for the service it received from Hassan's firm. Unfortunately for the company, Agrexco went under before paying its full debt and still owes the company almost NIS 100,000.
Don't you see a potential conflict of interest here? On the one hand, you are chairman of the workers committee and exert influence on work at the port and on customer service. But at the same time, you are providing private services to the same clients.
"I also hold large shares in companies that use the port. So what's the connection? I am very careful, I am no patsy and I will not go down over trivialities," says Hassan. "When I created my company I was sure that there is no conflict of interest, but even so I commissioned a legal opinion and was given to understand that there is no place for concern. I am not involved in managing the company and I do not have working connections with the port." (In the same breath Hassan adds that he keeps abreast of the location of each of his trucks, using a GPS-based application.)
But try to think about a port client. Won't he think it's worthwhile giving your company work, so there will be no problems? On the other hand, what port worker would dare delay a truck belonging to the chairman of his workers committee?
"There is no conflict of interest here. I work with other clients of the port and no one has complained that I threatened them, or told them that if they don't work with me I will get back at them. And none of my four trucks or the trucks of the contractors who work with me carries the company name. Agrexco itself enjoyed good relations at the port for 40 years."
Did Ikea work with your trucking company?
"When Shlomi Gabay called me before the strike and said, 'Do me a favor, my containers are stuck in the port, and on top of that please carry my containers on your trucks,' I replied, 'Shlomi, I didn't work with you yesterday and I will not work with you today. That's all I need - for the papers to write that Alon gave and Alon then moved [the stuff] with the trucks.' But that was during the strike ... I wish he would work with me on an ongoing basis. He brings in thousands of containers a year."
A spokesperson for Ikea said in response: "The Ikea management held meetings with all its suppliers, including the management of Ashdod Port, in order to ensure that the products would reach its clients when they arrived in Israel, and this is the place to thank Ashdod Port for its service."
Ben Idan Movers is not the only company Hassan owns. He also owns a company called A.Y. Hops Industries, which manufactures and sells detergents. Hassan founded the company - by himself, according to the Registrar of Companies, and with his friend Yigal Gossland, according to legal documents - and within a short time it was the target of a peculiar lawsuit.
The owner of another firm called Hops Industries, which sold Hassan's new company formulas for manufacturing detergents, claimed he had been the victim of a sting operation and had received only a small part of the payment owed him by Hassan and Gossland. The owner of the original Hops, Haim Menahem, first turned to the Bailiff's Office. He said he had fulfilled his part of the deal but had received only NIS 200,000 of the NIS 1.15 million agreed upon. Hassan and Gossland made the same claim, only in reverse. They said they had paid Menahem the entire amount - a down payment of NIS 200,000 and the rest in cash and checks - but that he had not supplied the formulas, which constituted the major element of the deal.
However, Hassan and Gossland quickly agreed to submit the dispute to arbitration, and with good reason. In the secrecy of the arbitration process, without documents being made available for public scrutiny, they put forward a completely different account. Now they claimed that Menahem - who is currently serving a prison term in a different case after being convicted of tax evasion and fabricating evidence - was their full partner in a business transaction and together with them had inflated its price.
The arbitration documents, which are being made public here, depict a parallel business world, one with different codes and values. According to these documents, Hassan and Gossland gave the following account: "Haim [Menahem] wanted to sell us the factory and explained that in practice the purchase of the factory would not cost us any money and that as part of the deal he would provide us, the new Hops, with receipts beyond the amount we would actually pay. Those receipts would generate tax rebates for the company we would establish that would be in excess of the payment we would make, so that we would be able to finance the deal from the rebates...
"In the middle of May," Hassan continues in the affidavit he submitted, "I founded A.Y. Hops Industries with Gossland. In the middle of June 2008, we signed a deal to purchase the factory, and the agreed amount was set at the inflated sum of NIS 1 million plus VAT."
In their affidavits, which are identical apart from the signatures on them, Hassan and Gossland go into details about the amounts involved and the payments structure. They note, for example, that "in the first stage it was agreed that Haim would produce receipts for the new Hops in an amount totaling NIS 2.387 million plus VAT, which would by stages generate for the new Hops a VAT rebate of NIS 300,000 in accordance with a list of equipment that was signed."
What finally happened in the great detergent dispute? At the moment, Menahem's jail term is delaying the conclusion of the arbitration process. However, even if Menahem is not an innocent lamb, it is impossible to ignore the trap in which Hassan and Gossland find themselves: If they are telling the truth in their affidavits, they are admitting to having been involved in a tax fraud scam; and if they are not telling the truth, the implication would be that they lied in the affidavit presented to a retired judge who is serving as the arbitrator.
Hassan has no comment on the subject. "It's a secret arbitration. I am not allowed to give details," he says. Haim Menahem said, "The claims of Hassan and Gossland are not only unfounded in themselves, but make no sense in terms of the tax laws."
In the meantime, A.Y. Hops Industries has attracted more lawsuits, sending employees, service providers and suppliers to the courts. Even as the company is developing and enjoying annual revenues of NIS 3 million (2010 ), claimants allege that its expenditure situation is far less impressive.
Everyone suing Hops tells the same story: The company did not pay them properly. The company, for its part, also retorts with a uniform allegation: The claimants tried to defraud them. In fact, all of the defense writs submitted by Hops create the impression that its owner, the unofficial head of Ashdod Port, is a serial victim of sting operations devised by sophisticated crooks, among them a secretary and a plumber.
In contrast to the identical claims, the list of claimants is indeed varied. The former secretary of A.Y. Hops Industries told the District Labor Court in Be'er Sheva that the company tried to force her to work during her maternity leave, refused to provide her with a signature she needed in order to claim the maternity grant, and afterward, when she resigned, rejected her right to severance pay. A former salesman named Ron Katar alleged in the Tel Aviv-Jaffa District Labor Court that the company owned by Hassan - the indefatigable defender of port employees - paid him less than the minimum wage and also failed to pay his salary on time. The plumber, Asher Ifergan, from Ashdod, told the small claims court in his hometown that he had received only part of the payment he was promised and that Hops "is making false claims in order to avoid paying the remaining amount." There were other suits as well, including one submitted by Hops' supplier Easy Clean Ltd. for alleged nonpayment in return for merchandise.
A.Y. Hops Industries denied the allegations. It claimed that the secretary "increased her salary without authorization ... in order to increase the maternity leave payment from National Insurance"; that the salesman "violated working procedures"; and that the plumber "forged a signature on an order form." The Easy Clean suit was "not made in good faith." The suits of the secretary and the salesman ended in compromise agreements; Hops paid Katar NIS 14,500 in another agreement.
The battle for territory
While Hops is doing battle on various fronts, its owner has not let up in his struggle on behalf of workers with collective wage agreements. Another big battle for Hassan this year, along with the "sirloin crisis," involved the port's fish farms.
Ardag and Dag Suf, whose fish cages were removed from Eilat Port to Ashdod by a government decision, wanted to put the cages in their new quarters. So the Israel Ports Assets and Development Company allotted them an area next to the Jubilee Port breakwater in Ashdod. The area belongs to the ports development company and is not part of the Ashdod Port Company. It's known as a "white zone" in the local jargon.
But the fish farmers were in for a surprise. Alon Hassan demanded that eight port workers set up the fish farm and four take care of the ongoing operation. The result would increase the cost of running the fish farms by thousands of shekels a day. The owners' argument that they were basically engaged in agriculture, which did not require crane operators or longshoremen, didn't fly. The workers refused to allow the farms to operate unless their friends were given work, and they blocked the anchoring of the barges carrying the farms' equipment. (They finally allowed them to cast anchor only after a court order.)
In the dispute, the Ashdod Port Company fought the Histadrut and turned to the Be'er Sheva District Labor Court. The fish farms sued the Israel Ports Assents and Development Company, even though it also opposed the workers' actions. The ports development company claimed that it was the owner of the entire area and that the port workers had no standing there.
Hassan, in the name of the workers, was unmoved. He said he didn't recognize the term "white zones" but only the term "waterline." And no one would cross the waterline other than people "who enjoy working conditions based on collective agreements." In other words, the port workers.
Now, while touring the fish farms, he points out the cages, the crews, the forklift carrying the fish food and the boats that take the food to the fish. "Why shouldn't the port workers do this?" he asks. "We also have boats and a forklift, and there's a crane, too. And we can also cast the nets."
The fish farms want to employ their own workers because port employees are more expensive.
"They want to pay their workers the minimum wage. That's not my problem."
But if they employ port workers, their salary expenses will increase, they will raise their prices and consumers will pay more because of your stubbornness."
The State of Israel made a decision to move the fish farms from Eilat to Ashdod. A government decision; I'm deeply moved .... If the state decided without reaching a prior agreement with the port workers, then the state, with all due respect, will compensate the fish farms and subsidize them. It's not our problem."
One might wonder why the port workers' leader is placing his prestige on the line in such a small dispute involving 12 workers. But a senior official at the Transportation Ministry provides a broader perspective. "In my opinion, Alon Hassan has no interest in the fish cages. Those are small firms that are irrelevant to him. What Alon wants is to perpetuate the monopoly," the official says.
"After all, what does it mean to say that 'foreign workers will not be employed on the waterline'?" the official continues. "It means that at no dock to be built in or near Ashdod Port will anyone be employed other than port workers. In other words, no private company will operate docks and no competition will develop. Hassan is preserving the port's monopoly by force because that's the source of his strength. That's how he holds the state by the short hairs."
Hassan confirms this analysis with unabashed pride: "I don't want there to be a precedent of other people working at the waterline. There won't be a situation in the future in which someone who is not a port worker will be employed at the port."
Some say you are entrenching your monopoly at the port, that you don't want competition there.
So in Israel there will never be private docks or competition at the ports?
"Never. If they bring in workers who make 10 or 15 percent of what I earn, what right will I have to exist?"
For the time being, one compromise was reached between the workers and the fish farms: The farms would employ port workers during the construction of the farms and pay thousands of shekels a day. As long as the construction process continued, they made payments to the port management, which sent the money to the workers.
The Labor Court later decided that the operational work would also be done by port workers but sent the sides to discuss the scale of their employment - and here the dispute continues. The port's management maintains that the operational work is minimal, but Hassan insists that four workers be employed. Even as the dispute smolders on, management continues to send the fish farms bills of NIS 16,000 to NIS 18,000 a day. The farms refuse to pay, as their agreement with the Israel Ports Assets and Development Company does not relate to the port area - so management is paying the workers from its funds. "It's absolutely incredible," says a senior shipping figure. "It's just make-believe. The workers are getting money without working."
Hassan takes a very different view. "There is no such thing as pretend working. I intend to do the work that has to do with me," he says. "We will set standards for working with [the fish farms] and they will pay. Nothing will help them; I will personally see to it that they pay the money." The fish farms did not respond to queries from Haaretz.
Enter the police
Hassan doesn't plan to let the fish farms off the hook. But there are issues on which he's not so determined. Ashdod Port has a logic of its own. In some areas the workers are flexible and are willing to allow in outside workers - for historical reasons.
"There are historical tasks that others have carried out, and we don't want to stop them from making a living with them, even though tomorrow I could decide that no one from outside will set foot in the port and from now on only port employees will do the work, period," Hassan says. "Tying containers to a ship, for example, is done through labor contractors. I could say, 'My people will do it.' But I don't want to put the subject on the table. What's so puzzling here? What looks irregular?"
One area in which outside workers are allowed to be employed is the unloading of cars. This is also the realm of companies like Daniel Group, founded by the late Daniel Gedj.
The great leap forward by Daniel Group occurred in the spring of 2006, when the company was hired by a major client. A month later it was put in charge of storing the unloaded vehicles, a project potentially worth tens of millions of shekels. Hassan says he was among the people "who brought this business to the port and suggested that it store vehicles."
Gedj, Hassan says, "accused me of trying to influence the unloading of vehicles. It's not a secret, it's being handled by the police. It was alleged that I tried to influence [the decision about] who would unload cars at the port. Nonsense. I won't talk about the dead, but I will say only one thing: Unfortunately, Danny didn't know how to separate friendship from business. He wanted more, he developed an appetite. Now his wife, Malki, is blaming me for his death. She says the night before the confrontation at the police station he was afraid and got stressed, and because of that he died."
What does "separating friendship from business" mean? And why was the head of the mechanical equipment workers committee involved in bringing "this business" - vehicle storage - to the port? What does he have to do with the supposed business appetite of the deceased, Gedj? It's not clear. Hassan won't say another word on the subject, and after Gedj's death the police closed the case for lack of evidence.
Since then, Daniel Group has not encountered any interference and it's still thriving under the management of Malki Solomon Gedj. Little wonder. In the past few years, Ashdod Port has become the main entry gate for vehicles into Israel. More than half the 145,000 cars imported annually pass through Ashdod Port. On any given day, 15,000 to 20,000 cars are in storage there.
Gedj has thus increased the size of her business and is enjoying exclusivity in vehicle storage at the port and benefiting from an increase in imports. As Hassan puts it, "She became a monopoly in the storage of vehicles."
A few months ago, Daniel Group won an IPAD tender to operate a parking area for trucks and a gas station in the area known as the port's rear. But about a month ago the company faced a business threat. After Daniel Group's four and a half years of exclusivity in vehicle storage, the port's management issued new authorization. Yet, even before it was made public, a new company was offering its own storage services and trying to lure car importers away from Daniel Group. The new firm was established in the second half of 2010 by two entrepreneurs: Yaniv Balter, who is close to Hassan, and David Hassan, the chairman's cousin and a businessman. At the beginning of the year, the cousin left behind a failed building-management company and hundreds of employees who lost their jobs following an entanglement with the tax authorities.
Hassan categorically denies that he is in any way involved in these businesses. "I have no connection to that company. They are my friends. David is a cousin and Yaniv is a good friend of mine, and David works for Yaniv. Daniel [Gedj] and I were also good friends, but we had a falling out."
Maybe you can reveal what the dispute was all about?
"I don't want to comment on that. The investigation started, the investigation ended, and if it had been otherwise I wouldn't be sitting here today."
The partner, the restaurant and the big fire
If there is one person particularly close to Hassan, it's Yigal Gossland, his business partner. "When you see him, you see Alon," Hassan says. "We started at the port together. My employee number is 48280 and he's a few numbers after me .... We both took a longshoreman's course, we worked in the same group and we're friends heart and soul."
With Gossland, Hassan experienced a jolt three years ago. It began on September 15, 2008, when Gossland entered Hassan's office in a panic. That night, a restaurant owned by Gossland had burned down and a badly burned man was found in the ruins. After being questioned by the police, Gossland headed for his friend's office. Until the next morning, Hassan didn't budge from his side. Later he gave testimony about the day's events after the fire.
Gossland and his partners had opened a bar-restaurant, called Malaya, four years earlier. He invested NIS 200,000 and for a while a wild success seemed possible. The restaurant not only attracted a large clientele, it found loyal customers for its catering services - among them the Ashdod municipality, where Gossland had connections. "I was plugged into the municipality, and they had gatherings for outstanding workers," he testified.
In addition to the restaurant business, Gossland, as the owner of two construction firms, provided building services to the municipality and other institutions in the south of the country. His businesses seemed to be doing well, at least from the outside. He drove around town in a car "worth NIS 300,000" just like his pal Hassan.
But things went awry in the restaurant, which by 2008 had debts of NIS 300,000. On September 10 that year the owners updated their insurance policy with Harel Insurance and changed the beneficiaries from the company itself to Gossland and one of his partners. The policy, one-third of which covered the structure and the rest the contents, totaled NIS 900,000.
Four days later, Saturday night into Sunday, the restaurant burned down. The police found a man on the floor, his whole body burned. He was taken to Sheba Medical Center and died three days later. He was Kauda Za'anuna, a 20-year-old Palestinian who worked in Gossland's construction company and whom Gossland dubbed Fadi. Gasoline was found on his shoes and socks. Gossland was informed about the fire shortly before 4 A.M. by the security company. He went to the restaurant and was then summoned to the police station to give testimony. When he was asked about his link to Za'anuna, he replied that a person of that name had worked for his construction company but that he knew him only superficially.
A month and a half later, on October 28, 2008, Gossland was arrested and later tried. He was charged with manslaughter, conspiracy to commit a crime, obstruction of justice and arson. The prosecution claimed he had conspired with Za'anuna to burn down the restaurant to collect the insurance. It emerged in court that Gossland had known the dead man well and had spoken to him by phone 75 times in the week before the fire.
Gossland claimed that on the day after Za'anuna's death he had received a series of threatening telephone calls from the man's family, which had spiraled into blackmail attempts. This was the reason he needed Hassan's psychological support; Hassan calmed him down and told him how to respond to the threats. Hassan confirmed this account.
The transcript of Gossland's court testimony, from November 2009, is revealing not only about his deeds but also about the support he received on the day after the fire from his good friend Hassan.
"I went to see Alon and he saw that I was scared, that I was in shock," Gossland said about the meeting in Hassan's office at the port. "I told him, 'Alon, they burned down Malaya. Today I heard that Fadi was hurt in the fire.' He told me, calm down .... He tried to calm me down and I got another phone call [the alleged threats] .... I didn't stop getting calls all day, and he heard it. I had no idea what to do .... He told me, Yigal, come on, let's go home. Luckily for me, he stayed with me for 24 hours. He was at my side the whole day."
According to Gossland's testimony, Hassan also gave him some additional practical advice. "Alon told me, 'Listen, Yigal, answer the people [the Za'anuna family]. Don't be afraid, answer them with one thing or another. Tell them there's insurance. Give them something so they'll leave you alone.' And that's what I said [to them]."
Hassan confirmed this in his court testimony. "I witnessed many calls to the accused. In one, I told the accused he should answer the phone, but he didn't want to. In the end he answered and spoke with someone. He said, 'Get off my back, calm down, there's insurance.' I told him to say that and he said it. He kept getting those calls until his arrest."
Why didn't Hassan, a civil servant who works for a government company, go to the police about the threats to his friend's life instead of advising him to "give them something so they'll leave you alone"? In his testimony, Hassan claimed he had implored Gossland to go to the police, but when he refused he felt he didn't have the right to do it for him. "I couldn't tell the police that he was being blackmailed, because Yigal didn't want to tell them," he testified. "I was afraid they would hurt his family, and I was afraid myself."
Someone else's testimony, however, told a different story. Kaid Abu Guda, a friend of Za'anuna's "and possessing certain ties with the accused," told the court that at Gossland's request he had acted as his go-between with the family. In his testimony, which was backed up by recordings of his conversations with Gossland and others, he said there had been no blackmail and no threats. At first, he testified, Gossland had asked him to advise the injured Za'anuna about the account he would give the police, and after Za'anuna's death he offered to compensate the family from the insurance payment.
The Be'er Sheva District Court rejected Gossland's account, as backed up by Hassan. "The account of the blackmail, which he did not put forward until his testimony in court, is totally unfounded," Judge Eliahu Bitan wrote in his decision. He acquitted Gossland of manslaughter but convicted him of arson. Hassan remains unconvinced. "Yigal was convicted of something he didn't do," he says. "I know he didn't do it. A judge can be wrong, too."
How does a person like Alon Hassan, a complex personality by all accounts, acquire so much power? At Ashdod Port, the answer would appear to be linked to the country's port reform, launched in 2005. Hassan was elected head of the mechanical equipment workers committee in 2003, but it took time for his full power to become apparent. He was overshadowed by Gamliel "Guma" Hasin, considered the port's strongman. Hasin didn't head any workers committee. On the contrary, he was appointed director of the port's museum. But he was a member of the Likud Central Committee, was close to Ariel Sharon's son Omri, and leveraged his political connections to accumulate power. Hassan was also a Likud man, from a family of Likud activists - but not for long.
Soon the port reform was set in motion. The country's economic leaders, headed by then-Finance Minister Benjamin Netanyahu, wanted to eliminate the monopolistic ports authority, turn each port into a separate government company, step up competition between the ports, make them more efficient and end the frequent strikes. The workers declared war on the plan, with the Histadrut's full backing. The port's labor leaders, Hassan and Hasin, took advantage of talks on the matter to bolster their status and chalk up achievements.
But Hassan - who according to an Ashdod paper promised his supporters that "we'll set the city on fire, there's going to be a civil war here" - bet on the right horse. The chairman of the mechanical equipment workers committee won sweeping support from the Histadrut, which has never wavered. With the labor federation's help, the workers reached a deal they could only dream of. To ensure the implementation of the reform plan, the government agreed to grant the workers NIS 1.2 billion. In return, it asked not for greater efficiency and higher productivity, but only a promise: no industrial action or strikes for the next five years.
This success bolstered Hassan tremendously (helped by the fact that Hasin had left the port ). Hassan soon left Likud - taking with him dozens of central committee members from his extended family - and joined forces with the Labor Party's Amir Peretz. Hassan said Netanyahu had crossed a red line when he assailed the workers over the exaggerated terms they had won. "Netanyahu, the man we had always fought for, had the audacity to spit in the well he drank from. That's what infuriated us. He incited against us and depicted us as a group of hedonists, millionaires," Hassan told a port publication. But the main target of the treasury's attack was Hassan's rival Hasin, the owner of a Jaguar sedan that became a symbol of the workers' hedonism.
In any event, the Histadrut, now under Ofer Eini, has helped Hassan consolidate his status and constantly backs the workers' demands. A senior figure in the shipping industry points out that the Histadrut benefits from this, too. "Both sides have a common interest, namely to control the place where a strike cripples the country and where the person who can pull the plug wields enormous power," the source says. "It's exactly the same with the airport authority and the Israel Electric Corporation. The Histadrut's leaders have to back these workers, because otherwise they won't be able to pull the plug. The Histadrut doesn't have the same vested interest in the doctors, as we see clearly."
The doctors are well aware of this. At one of their demonstrations they held signs reading, "My father was a doctor, my grandfather was a doctor and my great-grandfather was a doctor. My dream is to be ... a port worker." Hassan has a photograph of the sign. "At the start of their struggle they asked me to represent them, but I refused," he says proudly.
Hassan also benefits from the fact that the port's management is weak. There is general agreement about the balance of power between Hassan and port CEO Sagis. The many people interviewed for this article - shipping officials, government officials, port workers and clients - all said the same thing: "Alon Hassan is the director of the port."
A client says the reform project is only partly responsible for this state of affairs. "It shackled the ports' directorates and created an absurd situation in which whatever management wants to do needs the approval of the Israel Ports Assets and Development Company, the Government Companies Authority and the Transportation Ministry," the client says. "The workers entered that space. They know that management is incapable of making decisions, so they're exploiting the situation."
Hassan dismisses it all with a wave of the hand. "This management sees the good of the company eye to eye with the workers. We solve things by dialogue, and that's our success. It's not true that Shuki [Sagis] is a puppet, as the papers wrote. The bottom line is that he's my puppet and I'm his; it makes no difference. The point is that the port is profitable, and that's what counts."
But as the Trajtenberg committee concluded recently, the port workers' victory is the economy's loss. The strikes, industrial actions and inefficiencies exact a steep price. The committee is talking about damages at the ports in the hundreds of millions of shekels per year. And that doesn't include indirect costs caused by damage to reputation and the constant uncertainty.
You talk about profits, but the port could earn a great deal more if it were efficient.
"We meet all the shipping authority's service criteria and we're a profitable and efficient port. In 2010 we had a profit of almost NIS 200 million. Haifa Port had a profit of only NIS 30 million. That port is in bad shape and we're taking business from it. Why doesn't anyone complain about them?"
Sagis once said the port has 300 unnecessary workers.
"That's true. I say the same thing. But we want to streamline. The treasury simply isn't letting us."
"Because they're afraid of the broader implications. I suggested to the treasury that we sign a retirement agreement. Under the agreement, workers who make NIS 35,000 to NIS 45,000 a month will get NIS 12,000 gross on retirement. But the treasury didn't like the idea. They don't want us to streamline. They're also unwilling to privatize."
Do you want privatization at the port?
"Yes. Privatization in which the workers get a large part of the company." Isn't it strange for a labor leader to be in favor of privatization?
The chairman of the Haifa Port workers committee is against privatization in principle.
"I think that breaking away from the state will only benefit us. We'll be able to streamline and push ahead. The port workers will earn more if there is privatization."
The port workers are already the second strongest group in the country in terms of income. Don't you think things have gotten out of hand? What do you think is a reasonable wage for a port worker?
"As much as possible."
In this general atmosphere of rule by the workers there was a new development at the port of Ashdod in recent months. Someone of unknown identity called the CEOs of two different companies that operate in the port to set up meetings with them. The two afterward gave an identical account. They had met with the caller in an Ashdod cafe. He told them, "Give me 15 percent of your profits and you won't have any trouble with the port workers." After the meeting he disappeared. It's not clear who sent him, but one thing is certain: He left such a deep impression on the two CEOs that they refused to respond to questions from Haaretz or to file a complaint with the police. Hassan and the port management say they heard nothing about this.
The Ashdod Port Company: “In recent years there have only been a few days of full-scale strikes at the port, most as part of general labor disputes in the country declared by the New Histadrut, not because of local labor disputes. It is true that the committees occasionally take industrial action regarding issues on the organization’s agenda, but fortunately there has been a constant decline in the number of sanctions. The damage due to the labor disputes is not substantially high, and the main damage − estimated at a few million shekels − was caused by sanctions imposed by [one] workers committee, which went on for two years.
“Moreover, the Ashdod Port Company came through the global crisis admirably both in terms of turnover and overall profit. Even though the reform in port fees went into effect in 2011, reducing clients’ fees, revenues continue their growth trend. From 2007 to 2010 the number of ships visiting the port increased 20 percent and the waiting time was reduced 47 percent − figures that reflect streamlining and a dramatic improvement in servicing ships. In this period, the port registered a 25 percent increase in the number of containers, compared with 10 percent at Haifa Port, and an increase in market share to 45 percent, attesting to business and service momentum.
“As for the complaint by Daniel Gedj, in 2006, after the complaint, suspicions arose concerning criminal offenses allegedly committed by port workers. The company thereupon took legal advice, after which Mr. Gedj was referred to the police to submit a complaint. Naturally, we do not know the details of the police investigation, and the company’s directorate received no details whatsoever about the circumstances in which the case was closed. The company’s CEO, Shuki Sagis, gave testimony as requested.
“The company Daniel Group began providing storage services for vehicles according to a three-year agreement signed on May 31, 2007; later the term was extended to September 2011. From the port company’s point of view, this was the granting of authorization only and allowed anyone else to offer the same services as they wished. In fact, over the years, a few importers approached the port company. Some of them received authorization but decided not to operate in car storage.
“As for Alon Hassan’s private business, after requests that reached the port directorate in the past, the company did a check. It was found that Hassan is not working in and is not active in a business he owns but employs managers under his ongoing management, so this is of no interest to the port directorate. We have no information about the basics of Mr. Hassan’s connections with Agrexco or any other company.
“Yigal Gossland is employed by the Ashdod Port Company as an operational instructor. His continued employment will be determined by the results of the legal proceedings he is now involved in.
“Regarding the reports of two CEOs about a demand they received from an anonymous person to take a share of their profits, the port company received no complaints like that. This is a serious criminal matter that obliges those who reported on this to go directly and without delay to the Israel Police.”
Yigal Gossland, for his part, said: “I do not have a business and I am not Hassan’s partner, I just help him.” Gossland did not comment on his arson conviction.
According to Malki Solomon Gedj: “I do not know Mr. Alon Hassan personally, only superficially from my work at Ashdod Port. I did not accuse and do not accuse Mr. Hassan of my husband’s tragic death, which was caused by a pulmonary embolism. And I do not accuse him of anything else. I have no information about what Hassan claims or does not claim about Daniel Group being a monopoly.”