Welfare and Social Services Minister Haim Katz will face corruption charges pending a pre-indictment hearing, Attorney General Avichai Mendelblit said on Thursday.
The Likud minister is facing charges of fraud, breach of trust and bribery.
According to Mendelblit, Katz's Knesset activities between 2010 and 2015 were tainted by his relationship with businessman Mordechai Ben Ari. This includes the period in which Katz was chairman of the Knesset Labor, Welfare and Health Committee, from 2009-2013.
Mendelblit said Katz is suspected of promoting legislative measures that were favorable to Ben Ari's business interests in exchange for receiving financial services worth millions of shekels.
At the time, Ben Ari was a financial adviser at Equital, a large, publicly traded holding company in Israel. Ben Ari allegedly gave Katz frequent advice as to the way the minister should manage his personal investment portfolio, to the point that it was essentially run by Ben Ari himself.
This arrangement was carried out contrary to proper norms and without formally defining their relationship. At one point, Ben Ari allegedly advised Katz to buy shares in an Equital subsidiary, which constitutes insider trading.
When Katz was appointed a minister, he opened a trust that was essentially managed by Ben Ari. Having Ben Ari play that role without disclosing his involvement was apparently in violation of proper practice, leading to a mutual understanding that Ben Ari could leverage Katz's public role for his own benefit.
Navit Negev, an attorney representing Katz, issued a statement Thursday saying that the two men "have been close friends for many years" and that "any attempt to portray their relationship as part of a bribery scheme is unfounded and false. Katz's actions have always been for the public good and this will ultimately become clear."
