The police arrested Alon Hassan, the powerful union boss at Ashdod Port, and 15 others on Tuesday on suspicion of bribery, extortion and money laundering at the port.
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Hassan was remanded for seven days on allegations of fraud, corporate breach of trust, money laundering, extortion and fraudulent receiving. Police allege that he acted illegally to promote personal business interests he ran inside the port and that he hid the money he earned from those interests from the tax authorities.
“There is a reasonable suspicion, and even more than that, that links Hassan to the suspicions,” wrote Judge Michael Karshen of the Kfar Sava Magistrate’s Court in his decision to remand Hassan until next Monday.
Among the others arrested was a former senior executive of the port who is suspected of accepting bribes. He will be brought before the court to have his remand extended. A partial gag order was in effect immediately after the arrests but was partially lifted later in the day.
In addition Shemen Oil & Gas suspended trading on the Tel Aviv Stock Exchange on Tuesday and reported that certain, unnamed controlling shareholders had been detained by police in connection with the port investigation. It said police were investigating issues involved in “services for leasing storage and dock space and related services connected with the Yam 3 drilling,” a reference to the company drilling site 16 kilometers offshore from Ashdod.
The police’s elite Lahav 433 investigative unit made the arrests along with investigators from the Tel Aviv office of the Tax Authority. Among the 15 were senior executives of the port as well as private businessmen, a number of whom were also remanded in police custody for a week.
The police and taxmen also raided the homes and offices of a number of the suspects, including offices inside the port. The suspects include a well known figure from the sports world, though the police may choose to release him for now. The police are also investigating links between those arrested and major crime organizations in the south.
The police suspect that the port employees were working to advance the interests of private companies controlled by their friends and relatives, who shared their profits with the employees, either through bribes or other means.
The police also suspect that those involved applied pressure on other companies that requested to operate within the Ashdod Port or to supply services to the port. The suspects allegedly tried to prevent these other companies from competing with their own businesses — even when this was damaging to the port’s own interests and income.
The arrests followed a long undercover investigation conducted by the police, the Tax Authority, the southern region of the State Prosecutor’s Office, and the Israeli Money Laundering and Terror Financing Prohibition Authority.
Hassan’s lawyer called the investigation “political,” asserting that it was dictated by politicians in the wake of complaints that Hassan had made about political influence being exerted on Ashdod Port management and attempts to reform the ports. The judge rejected the claims and said he found no basis for them in any of the material he had received.
Determined to crack down on inefficiency and corruption at the ports, the government is moving ahead with plans to establish two privately operated facilities in Ashdod and Haifa side by side with government-owned ports. The plans have aroused strong opposition from dockworkers who fear their pay and work conditions will be hurt by the competition.
The police asked to remand Hassan for 10 days saying they feared he would try to obstruct the investigation. Hassan’s lawyer said this was no longer relevant since TheMarker already published a story in December which revealed that the investigation was being conducted. In the end the judge ordered Hassan to be remanded for only a week because of the Shavuot holiday that falls in the middle of next week.
The Histadrut labor federation announced in response to the court’s ruling that Hassan’s responsibility as union head would be transferred to his deputy Avinoam Shoshan “until the matter is clarified.”
Police Maj. Gen. Menachem Yitzhaki, the head of the investigations and intelligence branch, told the Israel Bar Association convention on Tuesday in Eilat that the date of the arrests was set well in advance. He said the police act in such cases only when they are convinced they have sufficient evidence to proceed further. Such cases are different than organized crime cases, which involve a direct threat to public safety, such as the case of the bomb found in a schoolyard three weeks ago, in which the police acted rapidly to prevent the threat. “This time we had time, we could work well, mostly with the Tax Authority and the Money Laundering Prohibition authority,” he said.
Isaac Blumenthal, the acting CEO of Ashdod Port, said in a letter to port employees Tuesday that he had learned about the investigation and arrest from the media and said the port would continue to operate as usual.
The port employees union said the workers were shocked to hear the police announcement. “The Israeli public has been exposed in recent years to a campaign of persecution and personal incitement conducted against the employees of the port, based on the intent to establish unneeded new ports that will be a tragedy for generations. The port workers have faith in the police that it will do its work faithfully and expect that the employees who were arrested will be released quickly and return to their jobs cleared of any guilt.”