Israel’s welfare minister to be indicted for corruption, pending hearing

Haim Katz allegedly had a quid pro quo relationship with top financial adviser, earning millions for himself in return for advancing business interests

Stuart Winer is a breaking news editor at The Times of Israel.

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 informed Welfare Minister Haim Katz Thursday that he is to charge him, pending a hearing, for bribery, fraud, and breach of trust.

The decision was made on the basis of a recommendation from State Prosecutor Shai Nitzan, who suspects the Likud party minister had an illicit quid pro quo with Mordechai Ben Ari, a leading figure in capital markets, in which Katz accepted financial benefits in return for using his position in the Knesset to advance the businessman’s interests.

Tel Aviv district prosecutors notified Katz of the development and told Ben Ari that he will face similar charges, also pending a hearing.

During the hearing the suspects will be able to argue their sides.

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.

Hadashot News reported that some of Ben Ari’s investments for Katz were believed to be made using insider information. The attorney general noted that Katz would invite Ben Ari to give an expert opinion at Knesset Finance Committee meetings dealing with securities laws, without revealing that Ben Ari was his personal financial adviser, the report said.

Attorney Navit Negev, representing Katz, responded to the recommendations saying that presenting the minister’s relationship with Ben Ari as corrupt is “wrong and absurd.”

“In all his actions as a member of Knesset and as a minister, Haim Katz acted practically in the public interest, and things will be clarified and proven,” Negev said.

Attorney General Avichai Mandelblit speaks at a conference in Jerusalem, February 5, 2018. (Yonatan Sindel/Flash90)

In February police announced there was sufficient evidence to indict Katz, his son, and top Israel Aerospace Industries officials on corruption-related charges.

Katz, who has been an MK since 1999, is suspected of bribery, fraud, and breach of trust while serving as the head of IAI’s workers’ union in the past.

Police said Katz used his senior position to advance his own interests, including promising lucrative employment — both inside and outside the company — to IAI board members who cooperated with him.

In addition, police said Katz violated a directive by Attorney General Avichai Mandelblit, who ordered him to distance himself from board members while they appointed a new chairman.

Suspicions of corruption at IAI became public last year when police raided the defense contractor, arresting 14 people, including his son Yair Katz.

Times of Israel staff contributed to this report.

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