Israel Aerospace Industries says ‘irregular’ activities led to internal probe before police raid

Results of investigation into suspicious conduct were submitted to law enforcement authorities prior to Wednesday’s arrest of 13 people

Judah Ari Gross is The Times of Israel's religions and Diaspora affairs correspondent.

Illustrative: Drones in a hangar at Israel Aerospace Industries, near Tel Aviv, on May 28, 2013. (AP/Oded Balilty)
Illustrative: Drones in a hangar at Israel Aerospace Industries, near Tel Aviv, on May 28, 2013. (AP/Oded Balilty)

Israeli Aerospace Industries said Wednesday that it had conducted its own probe into a number of “irregular” activities before police carried out an early-morning raid that resulted in the arrests of 13 people at the defense contractor.

IAI, which is at the center of a large corruption investigation, said it had poured substantial resources into rooting out any bad apples from the company.

“At the instruction of [IAI] CEO and the board, the company acted to verify and handle a number of suspicions, with a zero-tolerance approach toward unacceptable conduct,” IAI said in a statement Wednesday.

IAI said that the results of the probe were submitted to law enforcement authorities.

The statement came hours after police said 13 people, including a former high-ranking IDF officer, were arrested as part of a months-long covert police investigation into “widespread corruption” at the company.

All those arrested were suspected of a wide range of corruption charges, including fraud and money laundering. A number of other people were “detained for investigation,” but not formally arrested, police said.

The company is the country’s largest aerospace and defense firm, developing arms and systems integrated with jet fighters and other weapons. The company is valued at NIS 18.3 billion ($5 billion) and employs some 16,000 people.

On Wednesday morning, police raided the homes of the suspects, their companies and IAI offices.

IAI said it had instructed “all relevant officials to cooperate fully and unreservedly with the police and to proceed according to their instructions, in order to allow a full investigation and bring to justice any who have committed offenses.”

“The IAI will continue to serve as a cornerstone of Israel’s security and economy,” the statement read.

Earlier, the employee council of the Israeli Aerospace Industries announced its public backing of the police investigation, saying it would fully cooperate, and demanding that those found guilty be “brought to justice.”

The council said that the 13 suspects arrested, from state-owned IAI and private companies who either supplied or were supplied by IAI, represented a small percentage of the IAI workforce and did not “represent the values of IAI managers and employees.”

“We will not let them tarnish the contribution of IAI to the security and economy of the country,” the statement read.

The former IDF general arrested in connection with the investigation was named as Amal Asad, who had served in the army for 26 years, first in combat units and later as the head of the Coordination and Liaison unit of the Defense Ministry’s Coordinator of Government Activities in the Territories.

He is one of the few Druze Israelis to reach a general’s rank in the IDF and is a well-known figure in the defense establishment.

He joined IAI in 2012.

Police said in a statement early Wednesday that this was an “extensive investigation, with a wide scope, which includes a number of sub-scandals, and raises suspicions of a range of charges — corruption, aggravated fraud, money laundering, theft by public officials, illegal business practices, fraud and breach of trust.”

The “covert investigation” was conducted by the police’s Lahav 433 anti-corruption unit, along with investigators from the Tax Authority and the Director of Security of the Defense Establishment, an internal Defense Ministry investigatory unit.

The financial crimes department of the State’s Attorney’s Office was also involved in the investigation, police said.

“The covert investigation of this affair has thus far shown systemic criminal business practices and the suspicion of deep corruption, which is apparently common in the Israeli Aerospace Industries,” police said.

Those allegedly involved in the criminal activities include board members and managers, as well as junior staff, and “those that are supposed to be gatekeepers and advisers,” police said.

Several of the people arrested are set to be brought before a judge in Rishon Lezion later Wednesday in order to keep them in custody, police said.

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