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Yadlin Arrested; Jailed for 15 Days

October 20, 1976
See Original Daily Bulletin From This Date

Asher Yadlin, who was designated to be the next Governor of the Bank of Israel, was remanded to Jail for 15 days this afternoon, 24 hours after he was arrested for allegedly accepting bribes and engaging in other illegal activities. Two other persons allegedly associated with Yadlin were also remanded in custody and a fourth suspect who fled the country faces extradition proceedings.

These sudden developments in the Yadlin affair will force the Cabinet to select a new Governor for the Bank of Israel, a post Yadlin was to have assumed Nov. 1. At its regular meeting last Sunday, the Cabinet had decided to defer a decision on whether or not to revoke Yadlin’s appointment for two weeks in the ex pectation that the police investigation underway for some time, would yield firmer information on which to base a decision.

Yadlin’s arrest was precipitated by testimony given in court yesterday by the chief police investigator, Benjamin Ziegel. Ziegel said there was sufficient evidence to charge Yadlin with receiving bribes, making false declarations to avoid payment of property improvement taxes, violation of foreign currency regulations by transferring funds to banks abroad and other related acts. The offenses were allegedly committed while Yadlin served as chairman of Kupat Holim, the powerful Histadrut sick fund.

Ziegel testified that Yadlin is suspected of having received IL 48,000 as a bribe in connection with various land transactions by Kupat Holim. He told the court that the police had learned that efforts were made to influence or intimidate witnesses and therefore Yadlin’s detention was essential to the investigation.


Also arrested were Mordechai Ellison, who formerly headed a department in Solel Boneh, the Histadrut construction company, and Shlomo Gory, an attorney who worked for Yadlin. Ellison, who reportedly offered to become a State witness in return for a promise of immunity, was said to have confessed to various charges.

He and Yadlin allegedly accepted kickbacks when Kupat Holim purchased for $2.5 million, an uncompleted medical center said to be worth $1.4 million. Ellison was not granted immunity. Gory allegedly prepared false tax declarations for Yadlin and false property registrations aimed at evading taxes.

Police said many of the suspects interrogated have refused to sign statements. One left the country two days ago and the police are expected to ask for an extradition order once his whereabouts are ascertained. The persons questioned by police are said to include at least one senior government official who is director general of a ministry.

Yadlin himself was interrogated for four days before his arrest. The 55-year-old economics expert insisted on his innocence and claimed the charges stemmed from an act of vengeance by a former woman friend, Chava Ehrlichman, who he refused to marry. Ehrlichman herself was connected with possible illegal property transfers by Kupat Holim.

Police are also questioning Meir Kimche, a sick fund accountant, who decided to testify after initially refusing to cooperate in the investigation. Kimche was questioned after police discovered that he was a silent partner in a pharmaceutical firm that had dealings with Kupat Holim.


The party which named Yadlin, a staunch Laborite and former kibbutz member, to the immensely prestigious and influential post of Governor of the Bank of Israel, is trying to adopt a neutral stance until all the evidence is in.

Premier Yitzhak Rabin told a Labor Party meeting last night that his Cabinet would not become a courthouse and the judicial system must be allowed to run its course. He refused to comment further on the Yadlin affair on grounds that it is still under investigation. But he assailed the atmosphere of “witch hunt,” an obvious rebuke to Israel’s news media which has been playing up the scandal for weeks.

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