Six of 36 Israeli Arab Party Officials Detained in Fraud Probe Remain in Custody

Police suspect that senior Balad officials systematically transferred millions of shekels to the party’s coffers illegally while committing fraud.

Balad leaders and allies holding a press conference after the arrests, September 18, 2016.
Abdullah Shama

As a police investigation of allegations of fraud and money laundering in the Balad party continued, several suspects were released after detention hearings held in the Haifa and Rishon Letzion magistrate’s courts Sunday and Monday.

Most of the suspects were released with restrictions. Of the 36 suspects that have been arrested, six remain in custody.

Police suspect that senior Balad officials systematically transferred millions of shekels to the party’s coffers illegally while committing fraud. Police believe that funds from a variety of Israeli and foreign sources were falsely reported as having come from hundreds of individual local donors.  

Balad is one of the three mainly that together form the Joint List. None of the party’s legislators has been questioned in connection to the investigation.

“They want to portray us as a crime organization to scare people and humiliate us in public,” Balad Secretary General Matanis Shehadeh told Haaretz Monday outside the Haifa Magistrate’s Court.

“That’s the idea, to hurt us politically, because legally this won’t hold water.”

A lawyer for one of the suspects, who asked that his name not be published, said that it appears that there is something to the allegations.

“It could be that it meets the standards for criminality. In my opinion Balad, as a party, has never grappled with such a serious legal problem. It’s a serious case. I don’t remember any party in the country dealing with such a problem,” the lawyer said.

He went on to say that even the fraud and corruption allegations against figures in Yisrael Beiteinu were less serious than the suspicions about Balad.

“The issue of money laundering and criminal fraud is like a brush fire. It eats everything, green and dry. If it’s proved, of course,” the lawyer said.

“Raising money in contravention of the Party Funding Law, or falsifying corporate documents, are things that can be overcome.” But in this case, he said, at issue is the allegation of money coming from illegal sources, and to launder the funds activists issued Israeli receipts for permitted sums.

“Apparently they issued receipts of a magnitude that matched the contributions that they received in improper ways. That’s a serious offense,” he said.

He added that this suspicion makes it possible for the police and the Anti-Money Laundering Authority to seize suspects’ assets.

“All of those connect to the money laundering had their assets seized,” he said. “Some of them don’t even know what was attached. When they get home they’ll discover that everything they own was attached. Everyone who has a car had it confiscated. They’ll come home and find their bank account frozen and liens on land that they purchased.”

The wife of one of the suspects, who like the lawyer did not want to identify herself or her spouse, said that she still doesn’t know exactly why her husband was arrested. Although she understands what the general allegations are, it hasn’t been clarified who is being accused of what. She added that the arrest itself was traumatic.

“To come get someone in the middle of the night is really disproportionate,” she said. “I’m a strong woman, at least that’s how I think of myself, but I’m helpless facing a system that I don’t understand. We are not criminals; I don’t have the phone numbers of criminal lawyers. I don’t know how to maneuver in this system and I don’t want to know.”

Balad MK Basel Ghattas, who also came to the court, said investigators were trying to make it look as if the party systematically launders funds, with the media talking about suitcases full of cash.

“Forged documents, that’s the most they’ll find,” said Ghattas. He said other parties had been investigated on similar suspicions, “But it wasn’t an operation like this. They didn’t come to collect people in the middle of the night in a military operation.”

A few dozen people demonstration outside the Haifa courthouse, protesting what they said was political persecution by the government.