Six months ago, the Israel Police financial crimes unit raided the offices of Shemen Oil and Gas Resources. Investigators spent hours scanning computers, questioning people and hauling away cartons of files. Shemen did not report on the investigation, and the police kept quiet as well.
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Two days ago, police officers came to the homes of Shemen controlling shareholders Avraham Nanikashvili and Jacky Ben Zaken and detained them on suspicion of bribery and fraud. Former Israel Defense Forces Chief of Staff Gabi Ashkenazi, a former chairman of Shemen, was also called in for questioning.
Two years before the raid of the company offices, Ashdod Port trade union head Alon Hassan made his way to Shemen headquarters. The company was planning exploratory drilling in the Yam 3 well, off the coast of Ashdod. Shemen needed warehouse space in the port, but it also needed a guarantee that port workers would not launch any labor actions.
According to figures close to those involved, Ashkenazi emphasized how important it was to Shemen that the work not be interrupted — drilling costs were half a million dollars a day, and the company’s foreign partners were on strict schedules — and asked Hassan to keep things quiet at the port.
In March 2012, the CEO of Shemen was given a tour of the port. Less than a week later, a lease was signed.
These dealings now comprise the heart of a police investigation of alleged fraud at the Ashdod Port, after it was determined that while a private company, Dana Port Services, acting as an intermediary, officially paid 3.1 million shekels for the space, it collected at least 12.5 million shekels from Shemen.
Both the owner of Dana Port Services, who is considered close to Hassan, and Hassan himself were arrested earlier this week on suspicions of bribery, fraud, extortion and money laundering.
The CEO of Shemen, Yossi Levi, says that the CEO of Ashdod Port, Shuki Sagis, told him that the only way to rent space on the docks was through an intermediary company.
Sagis denies the claim, saying it was Shemen that wanted to use the logistics company and its employees.
Things became even more complicated when the port’s logistics officer, Eldad Wachsman, was asked to weigh in on the issue.
“All of the dealings with Dana were improper,” Wachsman said. He told investigators that he had distanced himself completely from Dana. “I told them, I told Mr. Levi that all work done within the territory of the port had to be done by, and only by, employees of the port” Wachsman was quoted as saying. “I tried to figure out what was going on, but I was given a the roundabout answer of ‘everything’s okay.’ Later, when I was uncomfortable, I decided not to ask any more questions.”
Later, there was a disagreement over a request by Dana to lease an additional 14,000 square meters of space on the docks. A request of such magnitude could be problematic in terms of tender laws, so Dana reduced its request to only 1,500 square meters.
Wachsman and the port’s VP of Customer Relations, Eli Bar Yosseph, were reportedly wary of the deal and delayed it but were pressured by Sagis to push it through.
A cousin of Hassan’s, David Hassan, chose the space to be leased. David Hassan was also arrested two days ago in connection to the investigation. He is suspected of bribery and extortion. He is apparently not the only relative of Alon Hassan involved in the scandal.
After that deal went through, Dana began unofficially acquiring more and more space on the dock. By the end of 2012, Dana was using nearly 20,000 square meters of dock space, but was paying rent on only the original 1,500 square meters. Dana was paying 85,000 shekels a month, when the port would have charged any other customer 440,000 shekels per month for the same space.
The corruption investigation into the Ashdod port has only just begun, but new suspicions could soon include leading businessmen and public officials, according to police officials. It remains unclear how exactly the police will handle the investigation, though it seems that senior public officials could be called in for questioning soon, as they apparently had something to do with the special treatment that Hassan enjoyed.
Police are expected to release some of the evidence collected during the investigation in the coming days, including telephone calls and pictures of Hassan’s associates. Police say Hassan set up a “small army” of associates around the port