Attorney General Avichai Mendelblit last week decided to file indictments against Labor and Social Affairs Minister Haim Katz for a series of offenses including bribery, aggravated fraud and breach of trust. Katz must first be granted a hearing; a final decision on whether to prosecute will be made in a few months.
There is no norm in Israel that requires a minister to resign his post at this stage, but Katz has another job: He is a member of the committee that selects judges to serve on the labor courts. This position gives him authority and status that cannot be accorded to a criminal suspect facing indictment. Although the labor courts operate separately from the regular judicial system and there is no chance of Katz being involved in choosing judges who might later hear his case, everything connected with choosing and promoting judges must be subject to the highest standards of integrity and proper public conduct. Katz doesn’t meet that threshold.
The Tel Aviv prosecution (taxation and economics) notified Katz and his friend, capital market investor Mordechai Ben Ari, of its intention to prosecute them. Katz has been an MK almost continuously since 1999 and served as chairman of the Knesset’s Labor and Social Affairs Committee. The allegations are that between 2010 and 2015, he and Ben Ari developed a quid pro quo relationship that included the exchanging of various benefits. At the time, Ben Ari was a financial adviser to the Equital company, which trades on the Tel Aviv Stock Exchange and is owned by businessman Kobi Maimon, a friend of Katz’s.
Ben Ari is suspected of having given Katz advice on managing his investment portfolio so frequently that in reality it was Ben Ari managing Katz’s investments. He did all this for free, contrary to accepted practice and without any contract governing the relationship, as required. The prosecution argues that as a result, Katz earned millions of shekels and in exchange, allegedly exploited his public position to advance Ben Ari’s business interests.
Katz is also implicated in another case involving Israel Aerospace Industries, in which police have recommended charging him with blackmail and fraud. The investigation concerns the way in which IAI employees were allegedly forced to sign up as Likud members and support Katz, who before entering the Knesset was chairman of the firm’s workers committee.
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If Katz is charged he will have to resign from the government. At this stage, however, he must at least resign immediately from the committee that appoints judges to the labor courts.
The above article is Haaretz’s lead editorial, as published in the Hebrew and English newspapers in Israel.