7 arrested in latest Tax Authority scandal

Employees are arrested under suspicion of exchanging tax credit for bribes.

The troubled Israel Tax Authority, still shaking from a massive corruption scandal that implicated much of the organization's leadership earlier this year, was dealt yet another blow Thursday when police confirmed that six employees were arrested under suspicion of exchanging tax credit for bribes. The six ITA employees - as well as one Jerusalem Municipality employee - were arrested on Wednesday, following the culmination of an undercover investigation into the allegations against them. The investigation was initiated months ago, after the ITA's own internal oversight department voiced concerns to police that something suspicious was going on in Jerusalem. "The ITA will continue to help the police in whatever they request in order to help reach the truth," wrote ITA officials in a prepared statement released Thursday. "The subject of ethical behavior is in our eyes of the highest value, and all the more so as a law enforcement organization. The authority is acting consistently with full cooperation with the Israel Police to reveal and isolate this phenomenon wherever it exists." The case was assigned to the Jerusalem District's elite Central Investigative Unit's Fraud Squad, which inserted an undercover agent who is also a financial expert to try to gather evidence. From the information gleaned by the undercover agent, police believe that the suspects took kickbacks from local business owners to reduce income tax payments, as well as to speed up processing times on new business files and increasing tax returns. All of the ITA suspects, some of whom were supervisors, were employed in the Income Tax Authority. They may have received cash as well as other bribes and favors in exchange for their services, police said. The municipality official is suspected of altering the amounts of payments due on the municipal arnona taxes, which are computed according to size and location of properties. On Wednesday, detectives raided ITA and Income Tax offices in Jerusalem, removing files and computer data that they hoped to use to further build the case against the employees. But police emphasized that they did not believe that the list of people involved in the scam was confined to the suspects arrested Wednesday, and said that they planned on making more arrests in the future. Police said that the suspects may face a series of white-collar charges including accepting bribes, fraud and violation of trust. All seven appeared in Jerusalem Magistrate's Court Thursday, where their remands were extended by periods of one to eight days. One of the suspects was remanded to house arrest, while the rest will remain behind bars until their remands expire or are extended. But ITA officials were quick to downplay this latest case as an isolated incident. "It must be emphasized that the suspicions cannot in this case cast a shadow on all ITA employees who faithfully carry out their duties," they said Thursday.