Drug Company Executives Suspected of Bribing Aides to Former Israeli Health Minister

Aides to Yaakov Litzman, currently housing and construction minister, are suspected of accepting bribes when he was health minister

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Moti Babchik and Yaakov Litzman.
Moti Babchik and Yaakov Litzman.Credit: Ohad Zwigenberg

Senior executives of two drug companies and former executives of Tnuva are being questioned by police on suspicion of bribing two aides of Yaakov Litzman during his term as health minister. Litzman, who heads the Agudat Yisrael faction of the United Torah Judaism Party, is currently the minister of construction and housing.

The companies are suspected of donating funds to charities connected to Moti Babchik, a close aide to Litzman, and of buying ads in Hamodia, a newspaper affiliated with Agudat Yisrael, in order to have their products included in the government’s “basket” of subsidized health products and services, or to win favorable treatment with regard to product labeling requirements.

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The CEO of the Policy lobbying firm is suspected of making the connection between the companies and the newspaper.

Petah Tikva Magistrate’s Court Judge Erez Melamed said, “This case touches on the holy of holies. An uncomfortable picture is emerging, to say the least.”

Several suspects in the case were arrested Sunday. Babchik, who has been Litzman’s right-hand man in both the Health Ministry and the Housing Ministry, is suspected of accepting a bribe, fraud and breach of trust; the general manager of Roche Pharmaceuticals Israel, Avi Danziger, is suspect of giving a bribe; the CEO of Policy, Erez Gilhar, is also suspected of bribery. Hamodia journalist and former Litzman aide Menachem Gesheid is suspected of taking a bribe and other offenses.

According to police, there is no plan to question Litzman at this stage. Litzman said there was nothing to the allegations against Babchik and praised his aide’s “honesty and diligence.”

“I suggest that everyone wait a bit, and they’ll see that everything was done lawfully and in accordance with proper administration,” Litzman said, adding: “I am sure that the legal authorities examining the issues will shortly come to these conclusions.”

General manager of Roche Pharmaceuticals Israel, Avi Danziger.Credit: Nir Kedar

Danziger allegedly hired Policy, which bought ads in Hamodia in exchange for promoting the addition of Roche drugs to the health basket.

The second drug company, which has not been named, is suspected of offering unspecified bribes. Sources familiar with the investigation said the companies were successful in getting their products included in the health basket.

The former Tnuva executives allegedly gave bribes in the form of donations to charities affiliated with the Gur Hasidic sect, to which Litzman belongs, in order to advance its interests in the Health Ministry with regard to product labeling, among other issues.

Police say the executives told detectives that the decisions about where to make donations were made by the firm’s CEO and other officials. Sources close to the investigation said current Tnuva executives are also expected to be questioned.

Babchik was ordered to remain in custody for three days. Gesheid is expected to be released Monday night to 10 days of house arrest. In addition to bribery, Gesheid is suspected of fraud, breach of trust and fraudulent receipt. A senior police officer, who spoke on condition of anonymity, said that Gesheid “was one of the strongest people in the ministry; he was the one who decided things.”

Danziger was questioned more than 15 years ago in a different bribery investigation, but the case against him was closed. His detention was extended to Monday.

The investigation began in 2017. Detectives wiretapped the suspects, conducted searches and confiscated documents from the Health Ministry, Tnuva, both drug companies and several charities.

Hamodia journalist and former Litzman aide Menachem GesheidCredit: Emil Salman

In a response, Tnuva said it complies with the law and with corporate governance practices, and that the company and its executives are cooperating and will continue to cooperate with the investigation as needed.

Amit Hadad, a lawyer for Babchik called his client “a first-class public servant who is dedicated body and soul to the public good. That’s why we have no doubt that his case will end up being nothing.”

Tal Shapira and Stav Schwartzberg, lawyers representing Gesheid, said their client “vehemently denies the suspicions attributed to him.”

Eitan Liraz, a lawyer for Danziger, said his client was cooperating fully with the investigation, adding that Danziger told him he had acted with complete transparency and is convinced that it will emerge that his behavior was in full compliance with the law.

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