Police Recommend Charging Israel's Labor Minister With Breach of Trust, Fraud

After being probed for months, Haim Katz now faces charges of fraud and breach of trust in a host of cases pertaining to Israel Aircraft Industries; Katz shrugs off allegations as 'bizarre'

Israeli Labor Minister Haim Katz.
Olivier Fitoussi

The police recommended on Sunday to charge Labor and Social Affairs Minister Haim Katz with breach of trust and fraud in connection with actions pertaining to the lsrael Aerospace Industries.

After completing a months-long investigation, police have recommended charges be brought not only against Katz, but also against the chairman of the aircraft industries union, Ehud Nof and other union members and Brig. Gen. (reserve) Amal Asad, as well as Katz’s son, Yair Katz.

“Sufficient evidence has been found for charges against various officials, each according to his part in the suspicions, for obtaining a thing by fraud, fraud, breach of trust and intimidation, as well as other charges,” the police said in a statement. According to the police, the investigation’s findings indicated “a methodical and intentional pattern of action of some of those involved, who acted to promote their personal benefit.”

According to the charges, Katz and others, among them senior union officials in the Israel Aircraft Industries, allegedly sought assistance from senior union members in enlisting company employees as Likud members, and in exchange, allegedly acted to have these individuals appointed to top positions within and outside Israel Aircraft Industries.

Katz is also suspected of acting against a directive of the attorney general when he appointed the chairman of the aircraft industries board, and allegedly interfered in internal matters involving labor organizing of its employees.

Police also claim to have evidence of Katz using aircraft industries union resources estimated at thousands of shekels for his personal and political benefit.

In response to the recommendation, Katz said: “I didn’t expect any different from the police, because it’s clear that they cannot admit that the huge resources they invested in this bizarre investigation were for naught. Any sensible person who knows what the investigation is about understands that there’s not a shred of basis for these bizarre accusations. It’s clear to me that there are sound minds in the prosecution and the legal system,and that it will be decided not to prosecuteme in this matter.”

One of the key suspects in the affair is Eli Cohen, a senior union member, who allegedly gave illicit benefits to a cleaning and painting company, A.B. Flight Services, which provides services to Israel Aircraft Industries. 
Cohen is also suspected of using his position to demand and receive large quantities of food at no charge from the aircraft industries’ suppliers and making personal use of the food, and of illicitly being reimbursed for trips abroad.

During the investigation, it emerged that Brig. Gen. Asad has a business interest in the technology company DruzeNet, which provides services to Israel Aircraft Industries. Asad is suspected of colluding with the owner of DruzeNet to conceal his relationship to the company and to use his position to benefit DruzeNet.

In July, the Securities Exchange Authority found evidence against Katz of alleged insider trading and bribery. It is suspected that while serving as a government minister, Katz purchased stock in the real estate company Nitsba Holdings shortly before the latter announced a merger with the Airport City business park in 2015, reaping alleged illicit profits, together with his financial adviser, of 290,000 shekels ($84,000).