13 arrested in Israel Aerospace Industries corruption scandal

It remains to be seen what the impact of the arrest of more than a dozen employees at Israel Aerospace Industries will have on the company in the long term.

Israeli police on Wednesday arrested 13 people suspected of corruption at Israel Aerospace Industries (IAI).

The IAI, which is wholly owned by the Israeli government, is the country’s leading military and aerospace technology manufacturer, accounting for nearly half of Israeli arms exports, with more than three quarters of its sales abroad. The police did not say whether the alleged corruption affected trade with foreign countries.

“This is a complex and extensive investigation, which involves a number of different actors being suspected of a variety of offenses including bribery, aggravated fraud, money laundering, theft by a public servant and breach of trust,” police said in a statement.

The months-long undercover investigation into IAI by police and the tax authority looked at all levels of the company’s hierarchy as well as investigating private companies who worked with it. The corruption investigation focused on suppliers providing bribes and kickbacks to company officials in order to win various tenders, and fraudulent payment invoices being submitted by IAI officials for services that never occurred. Police revealed that the undercover investigation uncovered “systematic criminal conduct and deep suspected corruption that is apparently the norm in IAI.”

“Everywhere we looked, we found elements of corruption,” a police spokeswoman added.

The 13 arrested IAI employees include top directors, heads of department and a prominent former senior military official, police said in a statement.

The undercover investigation was handled by the Lahav 433 unit of the Israel Police special department for public servant bribery at government-owned companies and the director of Security of the Defense Establishment (“Malmab”) as well as other bodies, including the economic department of the State Attorney’s Office.

IAI’s response to the investigation was given in a released statement:

“This morning, IAI became aware of an Israel Police investigation regarding the company. IAI’s management has no further details regarding this issue. IAI’s CEO has directed all relevant parties to cooperate fully, as and where necessary, with the Israel Police, to act in accordance with its regulations, and help to bring the current investigation to a successful conclusion and charge all those who may have committed an offense. Israel Aerospace Industries continues to play a central role in both the security and economy of the State of Israel.”

IAI has a long and historic relationship with Israel’s military. The company, founded in 1953, was established to support the Israeli Air Force by upgrading fighter jets and providing missile systems to the military. Today, IAI holds major role in producing military technology for Israel, including satellite and space technology, missile systems, drones, radar systems and other aerospace technologies.

It remains to be seen what impact this ongoing investigation will have on the company.

By: World Israel News Staff