Israeli Labor Minister Resigns From Cabinet After Graft Charges

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Social Affairs Minister Haim Katz.
Social Affairs Minister Haim Katz.Credit: Emil Salman

Labor, Social Affairs and Social Services Minister Haim Katz resigned from the cabinet Friday, two days after the announcement of fraud and breach of trust charges against him.

Prime Minister Benjamin Netanyahu is expected to reassign Katz’s portfolio to a current cabinet member and not to a Knesset member seeking a promotion.

Katz will continue to represent Likud in the Knesset and will run for reelection in the September 17 election. He has 30 days from the date of the indictment to ask the Knesset to vote and grant him immunity from prosecution.

“Despite not having a legal obligation to do so, as far as I know, I have decided to resign from my role as labor and welfare minister,” Katz wrote on his Facebook page Friday. “The attempt to cast aspersions on my impeccability and accuse me of impure motives in activity at the core of fulfilling my duties ... was baseless and bound to fail.”

On Wednesday, Attorney General Avichai Mendelblit announced the charges against Katz, which also include the use of insider information. The charge of bribery was removed from the indictment in a pre-indictment hearing last October.

Katz allegedly acted in a conflict of interest between his public position as a lawmaker and member of a Knesset committee and his and businessman Moti Ben-Ari’s private interests.

He is suspected of having a quid-pro-quo relationship with Ben-Ari, a friend and financial adviser to Equital, a company believed to be controlled by businessman Kobi Maimon. According to the original draft indictment, from 2010 to 2015 the relationship between Katz and Ben-Ari included the exchange of various illegal favors.

Ben-Ari allegedly advised Katz on his investment portfolio, and prosecutors suspect that the businessman in effect managed it without charging Katz a fee. Ben-Ari is suspected of advising Katz to buy securities issued by an Equital subsidiary as a result of insider information that the former had due to his connection with Equital.