IAI Labor Chief Helped Propel Netanyahu's Win

TEL AVIV, Israel — Among those who helped propel Benjamin Netanyahu into his fourth term as Israeli prime minister last week is a dual-hatted Likud lawmaker and longtime labor union boss from Israel Aerospace Industries (IAI).

Little known abroad, Haim Katz is a household name in Israeli politics, with influence over nearly 100,000 employees and pensioners of IAI and their families who are card-carrying members of Netanyahu's right-of-center Likud Party.

Netanyahu's come-from-behind sweep of 30 seats in March 17 elections — a six-seat lead over opposition leader Yitzhak Herzog — was due, in part, to union bosses like Katz.

He forgave Netanyahu for an insulting campaign video that appeared to conflate labor unions with Hamas terrorists as special interest groups harmed by his government's hardline policies. Netanyahu apologized to Katz and other union chiefs, disavowing all knowledge of his role in the failed attempt at campaign humor.

"We talked more than once in those days [before the election] … He apologized. He appreciates the important support of the workers and pensioners over all of Israel," Katz said.

For some two decades, Katz has represented employees of IAI, Israel's largest state-owned firm, whose current roster numbers 16,000.

And since 1999, he's been a six-term lawmaker with enormous influence over salary levels, pensions and benefits of workers, soldiers and their families as chairman of the Knesset's Labor, Welfare and Health Committee.

An IAI employee since 1968, Katz has been on unpaid leave since he took up his Knesset seat, yet continues to accrue pension and other benefits based on his continuous 47-year position in the company.

Now ranked 17 in Likud, down from 13 in previous party lists, Katz acknowledges he's unlikely to be minister in the next Netanyahu government. However, he fully expects to retain his Knesset influence in a "key legislative capacity," along with his role at IAI.

But within IAI management, the Israeli comptroller's office and the Government Companies Authority (GCA), many sardonically expressed hope that Katz would be appointed government minister.

At least then, they say, it would solve a glaring problem of conflicting interests by Katz's twin roles as IAI strongman cum lawman.

"It may seem strange for outsiders to know that in Israel, for 16 years, one man reigns in parallel realms that normally must be kept separate and distinct," said a top government watchdog in the Israeli Comptroller-General's office.

"We've written many reports over the years. Nothing ever changes," he added.

A former senior IAI executive put it this way: "We're talking about a guy — a union boss from a wholly owned government company — that uses company facilities and infrastructure to solidify his power in the Knesset, where he then influences financial and social issues that impede efficiency plans, " said a former senior executive at IAI.

"Only if he becomes a minister will he have to give up his union leadership and his Knesset chairmanship," the executive said.

"Irregularities … over a period of years," was how Ori Yogev, GCA head, described Katz's role, and IAI's unwillingness to challenge that role, in a November 2014 letter to IAI Chairman Rafi Maor.

When contacted March 19, Yogev said he would be willing to speak about Katz, IAI and his plans to prepare the firm for an initial public offering once he knows which finance minister he'll be reporting to in the next Netanyahu government.

"No doubt, these issues are important, with direct bearing on privatization plans we aim to implement in 2016," Yogev said.

In an interview, Maor said he would not interfere with the will of the workers, who consistently choose Katz to do their bidding.

"I'm chairman of IAI; not the prime minister of Israel. I don't sit on the Knesset's ethics committee and I'm not on the Supreme Court. The subject of Haim Katz was reviewed twice by the Knesset Ethics Committee and they approved it. There was once a case that went all the way up to the Supreme Court and they approved it. So who am I to argue whether it's right or wrong?"

Maor noted that in the two decades that Katz has led IAI's union, there has been no labor disruptions or strikes. "What we're doing with Haim Katz on the board of directors is based on the good of the company; it's part of sound corporate governance. … If, tomorrow, the authorities rule that there can be no duality, I'll be the first to enforce it," Maor said.

"But until then, I've been informed by the head of the Histadrut [national labor union] that they would object if IAI takes any action to prevent Haim's continued role in the IAI union."

Maor added: "Let's be honest: Haim Katz is here nearly 50 years. IAI is in his veins. He's not an easy person. He's not my friend. We don't hang out on weekends with our families. But I give him lots of respect. I need to focus on how to work together to the benefit of the company."

More than that, he sees no conflict in continuing to straddle both realms.

"I don't see any conflict," Katz told Defense News. "On the contrary, through my 47 years at IAI and my years in the Knesset, I am bringing a uniquely rich experience to better serve the entire defense establishment and workers nationwide.

"There were those who may have seen it that way [a conflict], and they took their concerns all the way up to the Israeli Supreme Court, where former Chief Justice Aharon Barak ruled that it was OK."

Katz said in his past two terms as chairman of the Knesset's Labor, Welfare and Health Committee, he has 180-some laws that have passed their second or third [and final] readings.

"My committee distinguished itself by the number of laws actually passed. My record is unprecedented, not only with regard to labor issues, but to ways we've worked to improve the benefits of Israel Defense Forces soldiers, officers and their families and to strengthen the entire Israeli defense establishment."

Email: bopallrome@defensenews.com

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