JNS
Government ministers and senior officials, including the Israeli labor federation's chairman, Arnon Bar-David, are being investigated.
Israeli police on Monday launched one of the country’s largest anti-corruption operations in years, detaining senior officials from the Histadrut, Israel’s main labor federation, including its chairman, Arnon Bar-David.
The arrests marked the public phase of a long-running investigation into alleged bribery, fraud and misuse of public funds within one of Israel’s most powerful institutions.
The operation, codenamed “One Hand Washes the Other” and conducted by the Lahav 433 major-crimes unit, began with coordinated raids at 6 a.m., targeting the Histadrut’s headquarters, the homes of senior union officials, and the offices of local authorities and corporations across Israel.
By the end of the day, eight people had been formally detained and another 27 questioned under caution. “This case involves the theft of large sums across the country by individuals in positions of power,” a police representative said in a recent court filing. He added that 55 searches had been carried out and that the investigation was expanding rapidly.
The sweep signaled the start of what authorities called a “systemic exposure” of alleged corruption networks spanning Israel’s public sector, business community, and labor institutions. As part of the probe, authorities compiled a list of nearly 350 individuals, including heads of local authorities and senior business figures, expected to be questioned over the coming days.
Israel Police Commissioner Danny Levy described the affair as “one of the most serious cases we have investigated,“ adding, "There is a connection between businesspeople and senior figures in the economy, including labor unions, for both electoral and promotional purposes. We will act decisively and without fear of investigating senior figures to get to the truth.”
In its first formal response, the Histadrut stressed that it was working with investigators. “We are confident in the innocence of our people and are cooperating with enforcement authorities,” spokesman Yaniv Levy said in a statement.
When reached out for comment, Police Spokesperson Dean Elsdunne told JNS that police “won't be elaborating at this time on the case,” due to the sensitive nature of the investigation.
What is the Histadrut?
Founded in 1920 in Haifa under the British Mandate, the Histadrut, or General Federation of Labor in Israel, began as an umbrella organization for Jewish workers. Its early mission was to organize labor, promote workers’ rights, and build the economic foundations of the emerging Jewish state. Over the following decades, it grew into one of Israel’s most powerful and influential institutions, a body that was simultaneously a trade union, an employer, a health provider, and an economic conglomerate.
“Over time, the Histadrut became what some people describe as a ‘state within a state,’ Guy Mundlak, a professor in the Department of Labor Studies and the Faculty of Law at Tel Aviv University, told JNS. “They tried to set themselves up to be entirely independent of the outside economy,” he added.
At its peak in the mid-20th century, the Histadrut controlled or operated large portions of Israel’s national infrastructure, including the Clalit Health Fund, industrial firms, agricultural cooperatives, and transport companies. It became a central pillar of the Labor Zionist movement and maintained deep ties with the ruling Mapai/Labor Party, effectively shaping national wage policy, social insurance systems, and collective bargaining frameworks.
“The basis of the Histadrut's power was its strong relationship with the ruling party. The state actively encouraged people's membership in the Histadrut by giving them monopolies and powers over many critically important economic functions,” Mundlak noted. By the late 20th century, it represented more than a million workers and was regarded as the largest voluntary organization in the country, a dominant force in both the economy and politics.
In recent decades, the Histadrut's power has significantly waned. Many of its central assets, including its bank and book publisher, have been disbanded, and its membership has progressively decreased.
“The Histadrut is not what it used to be. Many of the pillars of its power have fallen,” Mundlak observed. “However, collective agreements still cover about 50% of the workforce. Many sectors are still completely dominated by the Histadrut, so the Histadrut still has significant leverage over labor market governance in Israel,” he added.
The close ties with government and labor have consistently exposed the Histadrut to allegations of misconduct. The Histadrut has repeatedly faced corruption and governance scandals. In 2011, eight regional heads were investigated for “graft through hotel vacations,” accused of using union funds for personal benefit. In 2017, a leadership contest was marred by mutual accusations of corruption and nepotism, exposing the enduring patronage culture within the union’s senior ranks.
Critics have frequently pointed to the conflict of interest inherent in the Histadrut’s dual role as both labor representative and major economic stakeholder. Mundlak explained that while cases of corruption have definitely been uncovered in the past, the Histadrut’s prominent position has also made it a target of unfounded accusations. “There have been several cases of corruption in the past. However, it is also important to remember that there were also claims against the Histadrut in the past that led to nothing,” Mundlak noted.
Details of the investigation
According to police, the current corruption probe into the Histadrut has been underway for more than two years. Investigators said the undercover operation uncovered a network in which senior officials across multiple municipalities and public institutions allegedly accepted bribes and benefits from businessmen in exchange for promoting their companies and business interests.
At the center of the alleged network is Ezra Gabay, a veteran insurance agent and longtime associate of Histadrut chairman Arnon Bar-David. Police suspect that Gabay leveraged his influence within the labor federation to secure insurance contracts with labor unions, municipalities, and government-owned corporations. In return, he is accused of arranging appointments and senior positions in public bodies for individuals who could advance his business interests.
The investigation has widened to include several major institutions and municipalities, among them The Jewish National Fund (JNF), the Wingate Institute, Israel Railways, and local authorities in Rishon Lezion, Ashdod, Kiryat Bialik, Harish, Rosh HaAyin, and Kiryat Gat.
Police sources told N12 that Gabay allegedly sought insurance portfolios from these entities and cultivated relationships with political figures who could steer contracts toward his firm.
Investigators are also examining whether senior Histadrut officials planned to sell federation assets worth millions of shekels and steal part of the proceeds through intermediaries.
Superintendent Ronen Gingold, who is leading the investigation, described the case as involving “unusually large sums and abuse of entrusted power,” adding that the evidence points to a systemic exploitation of influence across labor, business, and political networks. Lahav 433 officers submitted a confidential report outlining the next phase of the probe. According to officers, the case has been broken into 13 separate sub-files, with more than 300 people expected to be questioned.
The day after the raids, the Rishon Lezion Magistrate’s Court ordered Bar-David remanded in custody for at least eight days. Police had asked for a 10-day remand, arguing that his release could enable obstruction of justice and tampering with the investigation. Gingold warned that there was a concrete concern that Bar-David could interfere with witnesses, “some of whom are his subordinates.”
Bar-David’s attorney, Micha Fettman, rejected the accusations, saying the union leader has fully cooperated, surrendered both of his mobile phones, and provided access codes. Fettman noted that Bar-David's relationship with Gabay was purely personal and had nothing to do with his role as Histadrut leader. “He’s had a close friendship with the insurance agent for 30 years. There’s nothing to hide,” Fettman told the court.
Judge Dorit Saban Noy accepted the police position and ruled that Bar-David would remain in custody. “There is reasonable suspicion that the suspect was part of a network exchanging bribes with the agent,” she said. “Given the complexity and number of people involved, releasing him could lead to evidence tampering.”
The court also examined the case of Bar-David’s wife, Hila Kanister Bar-David, who is suspected of bribery, bribery mediation, fraud, and breach of trust. Police had originally sought a ten-day detention, but Judge Noy approved only a seven-day remand. Fettman called her arrest arbitrary, saying she had no contact with Gabay and had stepped down as CEO of the Histadrut-affiliated Shahar On non-profit in 2024. “She handed over her phone and passcode; she has nothing to hide. She now works as an independent attorney,” he said. He argued that Hila Bar-David was arrested simply “to pressure her husband.”
The police further requested an extension of the detention of Gabay’s son, a senior executive at Gabay Insurance. Investigators say he played a parallel role in the alleged bribery scheme and was directly involved in advancing shared interests with his father. “The suspect was part of a quid pro quo system,” an officer told the court, noting that he is implicated in all 13 of the probe’s sub-cases. The court heard that 141 additional investigative actions are still planned, many of them considered vulnerable to interference if suspects are released.
In a separate hearing, attorney Moshe Zchut, representing Gabay, pushed back on the allegations. He said Gabay and Bar-David had been close friends long before Bar-David became union chief, and argued that Gabay’s firm had actually lost a series of tenders, including a health-insurance tender in March, undermining the claim that favors were granted. Police confirmed in court that the company had not won new contracts recently.
Gabay, who voluntarily handed over his phone and passcode, told the court that officers “searched every corner” of his home, “including the air conditioner,” and found no cash. “They told me in questioning: give us something on Bar-David and you’ll go home,” he claimed.
The Likud connection
As the investigation widens, police are examining whether the alleged bribery network within the Histadrut had links to senior figures in the Likud party.
Gabay’s role as a veteran Likud activist sits at the nexus of the political connection. Gabay began his political career in Likud’s Ramat Gan branch and rose to become a fixture of the party’s Central Committee, where he reportedly commands the support of several hundred members.
Police believe this influence made him an attractive intermediary for senior politicians seeking access to the labor federation’s networks, while he allegedly leveraged those ties to secure insurance contracts with state-owned companies and municipal corporations.
Photographs circulating in Hebrew media show Gabay alongside several top Likud figures, including Culture and Sports Minister Miki Zohar, Energy Minister Eli Cohen, and Foreign Minister Gideon Sa’ar. According to Channel 12, testimonies collected in recent days have mentioned the names of Zohar, Sa’ar, Cohen, Justice Minister Yariv Levin, Tourism Minister Haim Katz, Communications Minister Shlomo Karhi and Regional Cooperation Minister David Amsalem.
Investigators are reportedly considering whether to summon these ministers to provide open testimony, depending on how the evidence develops. Police have emphasized that no charges have been filed, and all those mentioned remain presumed innocent unless proven otherwise.
Zohar seems to be most directly implicated in the ongoing investigation. His name was reportedly directly mentioned in text communications between Bar-David and Gabay. Fettman sharply denied any involvement by Zohar in the entire affair.
“The evidence is preliminary,” he said. “Zohar appears in text messages where the agent seeks favors from Bar-David, who ignores the requests. There’s no money, no favors, just an insurance agent with a big mouth,” Fettman observed in a recent court statement.
For his part, Zohar dismissed any connection to the affair, saying, “I do not understand what I am supposed to address. I have no connection to the affair.”
The investigation’s reach has also extended beyond the Knesset. Kiryat Gat Mayor Kfir Suissa, a former CEO of Likud Global, confirmed that he was questioned as part of the broader probe.
His office stated that “the mayor was asked about various matters as part of a broad investigation involving hundreds of individuals. His public service record is clean, and integrity is his guiding principle.”
