Israeli Police Freeze 183 Million Shekels Amid Expanding Labor Union Corruption Probe

The corruption scandal within the Israeli Labor Union, officially known as "Yad Lochatz Yad," erupted in November with a wave of arrests including Labor Union Chairman Arnon Bar-David and prominent insurance agent Ezra Gabay. Eight months later, the investigation has deepened, implicating senior executives at Menora Mivtachim Insurance Group. On Monday, police froze a Menora Mivtachim bank account holding 93 million shekels, along with accounts of five top company officials totaling approximately 90 million shekels.

The executives involved include Group CEO Ari Kalman, Insurance CEO Michael Kalman, Chairman Yehuda Ben Assayag, Menora Mivtachim Holdings Chairman Eran Grifel, and Deputy Insurance CEO Orit Kramer. Menora Mivtachim’s stock dropped over 4% in Tel Aviv following the announcement. The police allege the scandal involves multiple sub-cases, notably concerning 300,000 health insurance policies for union members. These policies were allegedly promoted through bribes and benefits paid to Gabay, who reportedly leveraged his influence over Bar-David to ensure the union renewed and favored Menora’s policies, despite them not necessarily benefiting policyholders.

Police sources describe Gabay’s role as more of a middleman securing the union’s business for Menora rather than a traditional insurance agent, raising suspicions of bribery. The frozen funds are seen as an unusual but strategic move to pressure suspects, though legal experts believe full confiscation would require a conviction for money laundering. The broader investigation, led by the Lahav 433 unit over two years, has examined over 175 suspects, with 72 formally suspected of crimes including bribery, fraud, breach of trust, and money laundering. The probe extends beyond the union to local authorities, businesses, sports, and government corporations.

Bar-David faces allegations of exploiting his position to orchestrate a bribery scheme benefiting himself and others. Initially barred from his role, he has since returned under restrictions. Other notable figures investigated include Bar-David’s wife, Hila Kanister Bar-David, and Culture and Sports Minister Miki Zohar, who denies any wrongdoing despite multiple interrogations. Menora Mivtachim stated the frozen funds do not affect its operations and pledged full cooperation. Gabay’s lawyer called the allegations baseless, emphasizing his client’s lawful conduct. Zohar’s attorney also denied any connection to corruption, framing the investigation as politically motivated. All suspects maintain their presumption of innocence as no indictments have been filed yet.