Moderate to high corruption risks are faced by businesses venturing into public procurement in Israel. Bribes are sometimes exchanged in order to obtain public contracts (GCR 2015-2016). Businesses believe that funds are sometimes diverted to individuals or businesses due to corruption and report that favoritism is widespread among procurement officials (GCR 2015-2016). The public procurement process lacks transparency and state-owned companies very often make use of selective tendering procedures, which, combined, greatly undermines fair competition (ICS 2016). Companies found guilty of foreign bribery are not automatically debarred from participating in future tenders (OECD, Jun. 2015). Authorities have not enforced procurement laws and regulations consistently (ICS 2016).
In march 2016 Isaac Herzog, the head of the Labor/Zionist Union and opposition leader, was named as a suspect in a corruption investigation. Herzog allegedly received illegal donations to campaign for the ouster of Shelly Yachimovich from his party’s leadership during 2013. Herzog was allegedly ‘reimbursed’ by a nursing company he had helped during his time as welfare minister, by giving a political operative ILS 40,000 to run a negative campaign against Yachimovich, whom Deri hoped to disadvantage in the race for party leadership (Times of Israel, Mar. 2016). Another corruption case related to the diversion of public funds has implicated several public officials, including former deputy minister of the interior, former minister of tourism, former Ministry of Agriculture director-general and many others, who had allegedly illegally transferred government financial support to entities in return for kickbacks to members of the Israeli parliament and their associates and/or lucrative public positions to these associates (Globes, Oct. 2015). In October 2015, the police recommended putting several of the people involved on trial (Arutz Sheva, Oct. 2015). No further information is available on the case.