Ashdod Port in Hot Water as Comptroller Investigates Management Practices

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State Comptroller Joseph Shapira has ordered an investigation into operations at Ashdod Port, following a number of articles about Ashdod Port in TheMarker and Haaretz over the past two months, and criticism that the government is being lax in overseeing Israel's busiest port.

In a directive issued Thursday, the comptroller asked his staff to examine recent events at the port, including the conduct of its chief officials, the rift between the port administration and its board of directors, and the approach the Government Companies Authority has taken in overseeing operations at the state-owned facility.

Shapira said he is also preparing a broad investigation into nepotism and favoritism of close associates in employment practices at a number of government entities, including Ashdod Port.

Shapira added that he would shortly be issuing a report on procurement practices and other business relationships at the port, on Israel’s southern Mediterranean coast.

Over the past several years, the state comptroller’s office − which until last year was headed by Shapira’s predecessor, Micha Lindenstrauss − issued a number of reports on these issues ‏(including one released in 2012‏), but their findings and recommendations have been ignored by government enforcement officials.

Controversy erupted over an anti-nepotism resolution in December by Ashdod Port’s board of directors, barring the hiring of relatives in the offices of the chairman of the board, the CEO, the legal adviser and the internal auditor. The decision was passed following inquiries by the state comptroller and the Government Companies Authority on the issue.

The immediate impact of the resolution was to require the transfer of an assistant to the port’s CEO, Yehoshua Sagis. The assistant, Zehavit Ben-Abu, was the wife of a senior official at Ashdod and has been considered close to the workers committee at the port. The committee launched labor sanctions in response to the board’s decision.

The chairman of the board, Gideon Siterman, accused CEO Sagis of colluding with the workers to foil the board’s decision. Siterman said he himself was put under great pressure to have the board back off from its resolution on the nepotism issue.

In addition, the heads of the workers committee, Alon Hassan and Avinoam Shoshan, lodged a complaint with then Transportation Minister Yisrael Katz ‏(Likud‏), claiming that Siterman’s actions were revenge for his failed alleged attempt to make political appointments at the port, at Katz’s behest. Katz has denied the accusation.

A month ago, TheMarker disclosed a letter that Sagis had sent to the board of directors, in which he accused Siterman of approaching him in an effort to make political appointments, and of interfering in the management of the port.

For his part, Siterman denied any improper conduct, accused the workers committee of harassment and accused Sagis of subversion. In the meantime, a number of alleged incidents surfaced, purportedly involving efforts to redirect management policy to benefit the workers committee and cases of nepotism in hiring practices.

For over a year, the Government Companies Authority and the Transportation Ministry had failed to act to address management deficiencies − which included revelations that the port was operating without a chief financial officer, a chief legal adviser or a full complement of board members. Seemingly compounding matters, the Government Companies Authority chose a former Likud party activist as the authority’s observer at sensitive meetings of the Ashdod port’s board.

Capping off developments on Thursday, the Histadrut labor federation declared a formal labor dispute at the port, after the Finance Ministry’s wage division announced its intention to dock the salaries of port workers over labor sanctions they have imposed in recent months.

The salary deductions, which would range between 10% and 30% and affect about 500 port workers, have not yet been carried out. The declaration of a wage dispute lays the legal groundwork for a potential future strike and follows last week’s disruption of operations at the port.

The Ashdod Port.Credit: Ilya Melnikov

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