Welfare minister reportedly set to be charged with fraud, breach of trust

Avichai Mandelblit pushes ahead with indictment against Likud’s Haim Katz for alleged quid pro quo with business associate; bribery charge said dropped

Welfare Minister Haim Katz speaks at a Finance Committee meeting in the Knesset on March 5, 2018. (Yonatan Sindel/Flash90)
Welfare Minister Haim Katz speaks at a Finance Committee meeting in the Knesset on March 5, 2018. (Yonatan Sindel/Flash90)

Attorney General Avichai Mandelblit is reportedly set to indict Welfare Minister Haim Katz of the Likud party in the coming days on charges of fraud and breach of trust.

Katz is accused of an illicit quid pro quo with Mordechai Ben Ari, a leading figure in capital markets, under which the Likud minister allegedly accepted financial benefits in return for using his position in the Knesset to advance the businessman’s interests.

Katz, a veteran Likud MK, is a criminal suspect in a second separate corruption investigation relating to his time as head of the Israel Aerospace Industries (IAI) workers’ union.

The charges against Katz vis-à-vis his links to Ben Ari initially included bribery, but reports in Hebrew-language media Wednesday said prosecutors had dropped that offense after a pre-indictment hearing was held last fall.

The reports said the attorney general will make the announcement before the September 17 elections.

Though Mandelblit intends to advance legal proceedings before the next month’s vote, the reports said no action would be taken against the minister until at least November or December, when the newly elected Knesset can debate and then vote to strip him of his immunity.

In response to the reports, the Justice Ministry released a statement saying that Mandelblit had not yet decided whether to indict Katz. “When a decision is made, the public will be notified as it always is,” the statement said, according to Channel 12.

Prime Minister Benjamin Netanyahu, left, with Welfare Minister Haim Katz at a press conference announcing the raising of disability allowances, January 3, 2018. (Yonatan Sindel/Flash90)

Once charged, Katz will need to resign from his cabinet post or be fired by Prime Minister Benjamin Netanyahu.

According to the Walla news site, State Prosecutor Shai Nitzan was also seeking to charge Ben Ari.

Prosecutors suspect that during the years 2010-2015 Katz and Ben Ari developed a mutually beneficial relationship. Ben Ari, who was a financial adviser for a major public holding company, is suspected of providing free financial management for Katz, earning him millions of shekels. In return, Katz, who from 2009-2013 was the chair of the Knesset Labor and Welfare Committee, allegedly advanced business interests for Ben Ari.

In February this year, police recommended that Katz be indicted on bribery, fraud, extortion and breach of trust charges over suspicions that he used his position as head of the IAI union to advance his own interests, including promising lucrative employment — both inside and outside the company — to board members who cooperated with him. Katz was head of the powerful union for two decades before becoming a Likud minister in 2015.

The investigation is part of an ongoing probe into corruption suspicions at IAI with other dubious links to Katz. His son, Yair Katz, who serves in the senior management of the IAI and has been a member of the workers’ union for four years, was arrested last year on suspicion of coercing employees into joining the Likud party. Police said they were looking into allegations that employees at IAI who refused to register as members of the Likud party may have been systematically denied promotions or raises in salary, and in some cases were even fired.

The labor union at IAI, which employs some 16,000 people and is Israel’s largest state-owned company, is known as a Likud stronghold.

Prime Minister Benjamin Netanyahu, left, during a tour of an IAI facility on December 17, 2018. (Koby Gideon/GPO

Katz is one of four ministers known to be facing possible criminal charges, together with Netanyahu, Deputy Health Minister Yaakov Litzman and Interior Minister Aryeh Deri. Likud MK David Bitan is also being investigated on possible bribery charges.

Katz, like Netanyahu, has denounced all the allegations against him as a “witch hunt” aimed at harming his reputation.

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