Dimona Nuclear Reactor Gave Millions in Business to Former Senior Employee

Haaretz investigative report: After the reactor was forced to privatize part of its operations, it found new owners – a subsidiary and former employees, even though a legal opinion ruled this out.

A partial view of Israel's Dimona nuclear power plant in the southern Negev desert.
AFP

The Negev Nuclear Research Center near Dimona transferred operations worth millions of shekels to a private company without a tender, at an especially low price and contrary to a legal opinion against such a step.

An investigation by Haaretz has revealed that a former senior employee at the nuclear reactor owns 30 percent of the shares of the company involved, which is valued in tens of millions of shekels since it received the work. Another 35 percent of the shares are held by Shalon Chemical Industries, which has close business ties with the security establishment.

The company involved, Rotem Health and Safety, received the operations from the state-owned company owned by the nuclear center in Dimona, Rotem Industries, which was forced to stop its operations following legal requirements.

Rotem Industries, a wholly-owned subsidiary of the nuclear center, was established with the goal of commercializing the knowledge collected at the nuclear center. The Soreq Nuclear Research Center has a similar subsidiary named Isorad.

Rotem Industries’ office are located in the Rotem industrial park next to the nuclear center; the director of the Negev Nuclear Center, Dr. Ehud Netzer, is also the chairman of Rotem’s board of directors; and a few members of the board are also employees at the Dimona nuclear center. The CEO of the company is Yoram Sadan, who until 2013 was the head of human resources at the nuclear center.

According to public sources, Rotem Industries sells commercial knowledge from the nuclear center. Most of its activities are in two areas: medical products through its Rotem Medical subsidiary, in particular Oxygen-18, which is used in medical devices such as PET scanners; and various developments in the security field, including radiation detectors for airports.

Even though it is a government company, since 2010 the Government Companies Authority has not published Rotem Industries’ financial reports on its website. In that year, the company had a profit of 3.6 million shekels.

In 1998, it was decided that Rotem Industries would also deal with purchasing protective equipment such as helmets, radiation suits, gas masks and gloves for the nuclear reactor facility. Avi Batash was named to head the safety equipment division. Batash worked for the nuclear center for decades, and his brother-in-law, Giora Amir, was a senior official there and even headed the reactor center in the 1980s.

At some stage Rotem Industries started selling safety equipment to other companies. The original idea was to lower costs for the nuclear center as well as bringing in additional income. Various government ministries and the Israel Electric Corporation became customers, but in 2007, a legal opinion determined that such sales of equipment were improper, since government companies cannot conduct such business and compete in the open market.

Rotem then faced two options: to halt this business or to privatize it.

The decision was to privatize, but it was done in a roundabout way, through the new company, Rotem Safety. This company operates in the same location as Rotem Industries, and it seems as if its website is trying to hide that it is a private company.

Haaretz has learned that the transfer of operations from Rotem Industries to Rotem Safety was carried out without a tender. A source familiar with the details of the affair told Haaretz that the amount paid by the new private was significantly lower than what the company could have fetched on the open market. Haaretz has also learned that the legal counsel for Rotem Industries at the time objected to the privatization and the deal, but the nuclear center decided to complete the move anyway.

The Israel Atomic Energy Commission, which is responsible for supervising the Negev Nuclear Center, declined to comment, saying the oversight of the subsidiary is in the hands of the GCA.

The GCA also declined to comment, saying it was an internal matter of the company.

Sadan declined to comment and referred Haaretz to the IAEC.

The rest of those involved in the report also declined to comment.