Crime Rings Extort Billions From Israeli Contractors

A senior Israeli contractors' association official has revealed the alarming extent of organized crime's extortion of the construction and infrastructure sectors, estimating that over 80% of contractors in the north and south pay "shadow taxes" to criminal organizations. Yehuda Lashman, Deputy President of the Contractors Association and co-owner of Lesico Group, stated that this amounts to an estimated 5 to 8 billion shekels annually. He emphasized that this is not a minor fee but significant economic crime that inflates costs, causes delays, and creates unbearable pressure on workers, likening it to a "cancer in the belly."

Lashman clarified that the problem extends beyond residential construction to crucial infrastructure projects such as roads, power plants, and schools, which represent hundreds of billions of shekels. He warned that these heavy, non-construction-related costs directly hinder the country's development and its ability to provide basic services. The extortion often involves severe threats against contractors' families, and Lashman cited a case where a contractor who refused to pay was murdered in the Golan Heights, with other incidents including car bombings and equipment arson.

Furthermore, contractors face financial traps with insurance companies. When criminal organizations damage or destroy expensive equipment, claims for damages are often voided under "willful damage" clauses. This has led to a drastic reduction in insurers willing to cover contractors, causing premiums to skyrocket. Lashman criticized the authorities for their inaction, stating that while the military fights Hamas, contractors are left to battle economic crime alone, facing what he called "gross irresponsibility by the regulator."

He noted that many contractors fear reporting to the police due to the risk of being marked, losing insurance, and facing immediate danger. The consequence of this neglect is already evident, with Lashman reporting 800 construction company collapses in the past two years, severely weakening the sector. He predicts that within three to four years, Israel could face a situation where hundreds of thousands of apartments remain empty without essential infrastructure like sewage treatment facilities, preventing residents from moving in. Lashman concluded that if the trend continues, Israel risks becoming a "third-world country" in terms of infrastructure and quality of life, driven by short-sighted political considerations.