Minister Haim Katz to be indicted for bribery pending hearing
State Attorney's Office notifies Welfare Minister Katz of AG Mandelblit's intention to indict him for bribery, fraudulently obtaining benefits, fraud and breach of trust offenses; Katz allegedly promoted affairs of businessman Mordechai Ben Ari, who managed the minister's investment portfolio, while abusing his public office; Katz said to have 'promoted bill Ben Ari pushed for, presented him as expert in Knesset committees.'
Welfare Minister Haim Katz will be indicted for bribery, pending the holding of a hearing, a statement by the State Attorney's Office said Thursday.
The Tel Aviv District Attorney's department of taxation and economy crimes notified the minister that Attorney General Avichai Mandelblit was considering indicting him for bribery, fraudulently obtaining benefits under aggravated circumstances, fraud and breach of trust offenses.
The attorney general's decision was said to have reached his decision based on a recommendation by State Prosecutor Shay Nitzan and District Attorney Liat Ben Ari Sheweky.
The prosecutor's office also notified capital markets man Mordechai Ben Ari that he may also be indicted pending a hearing on similar offenses, as well as for insider trading.
Katz has been a Knesset member since 1999—except for a short intermission—and a minister starting May, 2015. Between 2005 and 2006 and then again from 2009 to 2013, Katz also served as chairman of the Knesset's Labor and Welfare Committee, giving him significant power in promoting legislation and matters of significant public importance.
The Tel Aviv District Attorney said that according to suspicions, provided to both the minister and Ben Ari, Katz held a "quid pro quo" relationship with the capital markets man from 2010 to 2015 that included the mutual exchanged of benefits.
At the time, Ben Ari was a financial adviser for Equital—a prominent public holdings company owned by moguls Koby Maimon and Haim Tsuff.
As part of their relationship, Ben Ari allegedly provided benefits worth millions of shekels, while Katz promoted the businessman's affairs while abusing his public position.
The state prosecutor said that Ben Ari—considered an expert on investment portfolio management—instructed Katz on how to manage his own portfolio with alarming regularity, to the point where it could be said he was effectively managing it himself.
Said management was allegedly carried out without any monetary compensation on the part of the minister and without any formal regulation of their relationship, contrary to accepted procedure.
As part of their relationship, Ben Ari was said to have recommended the purchase securities belonging to an Equital subsidiary, constituting an abuse of internal knowledge on future developments he was only privy to due to his position within the parent company.
The State Attorney's Office further maintained that Katz and Ben Ari carried out coordinated stock market deals for significant sums, in a manner engineered to procure considerable benefits for the veteran Likud minister.
"Ben Ari's expertise and considerable involvement in Minister Katz's securities portfolio netted the minister millions of shekels in gains," the prosecutor's decision said.
Katz was also said to have opened a trust account administrated by Ben Ari when he was appointed welfare minister, but withheld the administrator's identity in contravention of protocol.
"Economic ties between the two included the mutual expectation and understanding that Ben Ari will be able to leverage the minister's public office, his authorities and the accessibility his role provided to receive benefits for him or Equital," the decision added.
In return for benefits, Israel Securities Authority investigators claimed, Katz exercised his power and authority as a public official to promote and assist Ben Ari in his affairs.
Among other alleged improprieties, Katz was said to have acceded to the businessman's request in passing a bill with immense economic potential for both Ben Ari and Equital.
"Minister Katz held discussions about the bill, initiated and even drafted by Ben Ari himself, in the Welfare and Labor committee that he chairs, and invited him to attend its hearings as the sole expert on the matter," prosecutors said.
"This was done while withholding her personal and business relationship with Ben Ari, who he presented as an impartial expert despite the significant economic interest in promoting the bill," they added.
His actions were carried out, the prosecutor's office concluded, while in a severe conflict of interests between his public roles and personal interests.
Katz's attorney maintains relationship was merely 'friendly'
Attorney Navit Negev, who represents the minister, said he and Ben Ari were "very close friends for years now. Presenting their relationship as one of bribery is wrong and absurd. In all of his actions as minister and MK, Katz worked for the public's interest."
Regarding the law Katz allegedly passed to benefit Ben Ari, Negev said it was meant to "right a wrong. It was intended to preserve the interests of small investors and protect them from possible manipulations by company majority owners. Attempt to dress the law up with impure motives is destined to fail."
Ben Ari's attorneys, meanwhile, said they had only recently received the notification of the hearing and have yet to properly examine it.
Nevertheless, they stated, "Our client intends to make his case as part of the hearing process, and we believe that at its conclusion the State Attorney's Office will also reach a conclusion that there is no reason to indict."
Police had already announced its intentions this past February to indict Minister Katz after sufficient evidence was found pointing to fraud and extortion under threats offenses.
Two years ago, sources from within the Israel Aerospace Industries (IAI) reported that the minister pushed for his son Yair to be appointed chairman of the aerospace and aviation giant's workers' union—a position Katz himself filled for years.
Yair Katz, voted into the position earlier this month, was also arrested in the past on suspicion of involvement in the affair. Police claimed that contractors who worked with the IAI provided both bribes and benefits to the company's senior officials in order to sway various tenders.
Some of the suspects, it was alleged, even provided services to the senior officials' homes.
