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Tax Allegations Could End Arye Dery’s Political Career

The Shas leader, who spent time in prison, is expected to do anything to cut a deal to avoid going to trial

Gidi Weitz
Gidi Weitz
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Arye Dery during a Shas party conference, 2019.
Arye Dery during a Shas party conference, 2019.Credit: Oren Ben Hakon
Gidi Weitz
Gidi Weitz

It’s a bit hard to believe, but the opening salvo in the case against Interior Minister Arye Dery was fired more than five years ago. The anti-money-laundering authority informed then-attorney general Yehuda Weinstein that huge sums of money from foreign accounts had been deposited in the bank account of Dery’s brother, attorney Shlomo Dery, and from there to Arye Dery’s account. Weinstein unenthusiastically ordered an investigation against Dery, one of his favorite politicians whom he considers to be a level-headed and moderate force at cabinet sessions.

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A few weeks after Avichai Mendelblit replaced Weinstein, he instructed the police to upgrade the investigation against Dery. The main suspicion was that the minister had taken bribes and that his brother had acted as an intermediary between Dery and interested parties. The police also suspected that charitable organizations run by Dery’s wife Yaffa, which took in millions of shekels from philanthropists and the state, had gone to line the family’s pockets using sophisticated tricks.

At a fairly early stage in the investigations, law enforcement officials realized that those suspicions would not hold water. However, a joint investigation by the police and the Tax Authority turned up other alleged offenses by Dery, such as systematic cash deposits in his bank account and various allegedly dirty tricks in real estate deals that Dery concocted with his brother. His actions, a person familiar with the details of the investigation said, were reminiscent of a low-level money changer. On Friday, after an astronomically long delay, Mendelblit decided to indict Dery for tax offenses, pending a hearing.

Avichai Mendelblit and Shai Nitzan in Jerusalem, December 18, 2019.Credit: Ohad Zwigenberg

During the five years of the investigation, did it not occur to Mendelblit what the destructive impact would be for the leader of a political party to be under a black cloud of criminal suspicions? Did Mendelblit not realize that by delaying the charge sheet for this long, he, the prosecution and the police were adding fuel to the fire of Prime Minister Benjamin Netanyahu’s ongoing criticism against law enforcement, accusing it of waging a deep-state struggle against an elected government and holding politicians hostage? In any properly run country, there would be no justification for holding a minister, or any citizen at all for that matter, in purgatory for five years. This is an extremely serious infraction of his rights.

The last time a similar thing happened was in the case of former minister, Yisrael Beitenu Chairman Avigdor Lieberman, in which millions were deposited in bank accounts of people close to him in Cyprus and the Virgin Islands. In that instance as well, Weinstein and senior prosecution officials sat on the material for years. But it seems that in the Lieberman affair, there were some barely mitigating circumstances for the delay: This was a transatlantic investigation involving several countries, some of which refused to cooperate with Israel. Key witnesses died, disappeared, claimed the right to silence or recanted. As opposed to the Lieberman affair, the Dery case is mainly a local one – unfolding between the ultra-Orthodox neighborhoods of Har Nof and Givat Shaul in Jerusalem, and it should have been decided long ago.

Although Mendelblit started out by saying that the suspicions of corruption against Dery were not corroborated, it’s hard to say that the interior minister can breathe a sigh of relief just yet. If he is found to have committed the tax offenses alleged against him, this will spell the end of the career of the only man in Israel’s history to have gone from prison to a cabinet position. In the attorney general’s announcement of the indictment, Dery appears to have evaded taxes to the tune of hundreds of thousands of shekels in various ways via intermediaries through “fraud, guile and ruses.”

The headquarters of the Lahav 433 unit, Lod, January 16, 2019.Credit: Tomer Appelbaum

Dery, who had waged an aggressive campaign against law enforcement in his first indictment, was admirably restrained this time. Some people thought that the fact that Dery did not join Netanyahu’s war against the prosecution and the police also had a psychological impact on Mendelblit, who had little appetite for an indictment. But Mendelblit himself denied this, telling an associate: “This must not be given any weight.”

If Dery is indicted following the hearing, a ruling in his case will come months after a new government is sworn in. If the attorney general decides to indict, don’t be surprised to see a deal in which Dery leaves politics. He won’t act like Netanyahu; he’ll make every effort to avoid a prolonged court case with him as the accused.

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