Ex-Israeli Finance Minister May Be Indicted for Theft from Union

Terrorism may be by far the number-one problem for Israel, but that doesn’t mean its labor unions, or government officials who work with them, get a free pass.  Law enforcement officials in the small Middle East nation, at least, aren’t looking the other way.  This cannot be said of certain ranking government officials.  On September 2, Israeli police recommended that former Finance Minister Avraham Hirchson be indicted for stealing millions of dollars from a trade union during and possibly after the period he’d headed it.  Police spokesman Micky Rosenfeld says there is “substantial evidence” that Hirchson in 2003 embezzled and laundered $2.4 million from the National Workers’ Union (NWU).  Hirchson has not been indicted, but that could change over the next several weeks.  He resigned his government post in July.


Police and tax authority investigators submitted a summary of findings to State Attorney Eran Shendar and the Tel Aviv district attorney, having secured permission from Israeli Police Intelligence and Investigations Division Head Commander Yohanan Danino.  The probe could yield any number of indictments.  Much of the investigation has centered on the bank accounts of Avraham Hirchson and his son, Ofer.  Who funneled money to whom, and for what purpose, is still up in the air.  Authorities have advanced a variety of explanations.  One of them maintains that Hirchson used the funds to pay off his son’s gambling debts.  Another sees the son as using his father’s account to avoid tax liability. 


The investigation is focusing on the National Workers’ Union and two of its subsidiaries:  Nili, the union’s educational system; and Leumi, its health care provider.  Police suspect that Hirchson embezzled cash and benefits from the organizations during his tenure as head of NWU, and possibly afterward.  Five of the elder Hirschson’s former employees at Nili were arrested in January.  He’s not in an enviable position.  “You can’t debate the financial records,” said former Police Investigations and Intelligence Chief Moshe Mizrachi, arguing that the money-laundering charge would be the most difficult to fight.           

The scandal is not the only one to have rocked the nation.  Former President Moshe Katsav resigned this June in the face of allegations that he’d committed various sex crimes, including rape.  Under indictment, he agreed to plead guilty to several lesser charges, thus enabling him to stay out of prison.  Current Prime Minister Ehud Olmert, meanwhile, is under investigation for participation in shady real estate deals and the improper sale of a government-owned bank to private investors.  Mizrachi believes corruption is endemic to Israel’s political leaders, and often enjoys the support of their colleagues.  One may soon see just how endemic.  (Jerusalem Post, 9/3/07; 9/4/07; Associated Press, 9/3/07).