Police to grill minister in Israel Aerospace Industries probe

Haim Katz’s son Yair, a senior executive in the company, is suspected of coercing employees into joining Likud

Police will question Welfare Minister Haim Katz next week as a criminal suspect in an investigation into alleged corruption at Israel Aerospace Industries, where he served as head of the workers’ union for over two decades before becoming a minister two years ago.

The interrogation, scheduled for next Monday, will come two months after police requested permission from the attorney general to question Katz under caution.

Suspicions of corruption, fraud and breach of trust at IAI became public in March when police raided the defense contractor, arresting 14 people — among them Katz’s son Yair.

The younger Katz, 36, who serves in the senior management of IAI and has been a member of its powerful workers’ union for four years, was arrested on suspicion of coercing employees into joining his father’s Likud party.

He was arrested along with fellow union member David Peretz. The two were held after their homes were raided and searched.

Yair Katz (L), son of Welfare Minister Haim Katz (Likud), at a remand hearing at the Rishon Lezion Magistrate's Court, March 22, 2017. (Flash90) — Yair Katz (L), son of Welfare Minister Haim Katz (Likud), at a remand hearing at the Rishon Lezion Magistrate’s Court, March 22, 2017. (Flash90)

The labor union at IAI, which employs some 16,000 people and is Israel’s largest state-owned company, is seen as closely tied to Katz senior.

Responding to the attorney general’s decision to allow police to question him, the minister said that he and others and the IAI were the targets of an “unjustified smear campaign.”

“I will cooperate fully with the investigation and I am sure that everything will return calmly to the way it was before,” he said in a statement.

In a separate case, the Israel Securities Authority is investigating suspicions that Haim Katz — after being appointed a minister — bought shares in a real estate company shortly before the company announced it was merging with the Airport City business park in summer 2015. Together with another suspected insider dealer, he is thought to have illegally reaped a NIS 290,000 ($75,000) profit.