Israeli contractors pay ₪8 billion protection money annually

More than 80% of construction and infrastructure contractors in Israel's North and South pay protection money to organized crime, according to Yehuda Lashman, vice president of the Contractors Association and owner of the Lesico Group. The total annual sum, he estimates, is between ₪5 billion and ₪8 billion.

"In the North and South, the percentage of companies in our sector paying protection is over 80%," Lashman stated. The phenomenon, he added, extends beyond construction: "It's also in agriculture, industry, restaurants and more."

He emphasized that this is not a minor fee but full-scale economic crime. "Protection is a shadow tax, an additional tax we estimate at between ₪5 and ₪8 billion a year imposed on the contracting and project sector," he explained. "It makes projects more expensive and delays them, and it creates unbearable pressure on workers. It's simply a cancer in the belly."

Interview with Yehuda Lashman, VP of the Contractors Association

A blow to national infrastructure

"Forget the word real estate," he said. "You're talking about execution contracting, those who build not only apartments, but mainly infrastructure: roads, sewage treatment facilities, power stations, schools and transport infrastructure. This is a sector worth hundreds of billions of shekels."

The heavy costs unrelated to actual construction directly harm the state's ability to develop and provide basic services to citizens.

Threats to children and assassinations

Asked where the billions go, Lashman was blunt: "To criminal elements! The threats are usually against your wife, against your children, and they carry them out."

He recalled a severe case from about six weeks ago: "A contractor who refused to pay protection was murdered in the Golan Heights. These are not trivial matters. It ends in murder, in bombs under cars and in equipment being torched."

Beyond the physical threats, contractors are caught in a financial trap with insurance companies. Once a crime organization sabotages expensive equipment or burns pumps, filing an insurance claim creates a deadly snowball. "The moment there's a claim, the 'malicious damage' clause is canceled. Companies refuse to insure contractors, and the number of companies willing to insure has dropped to just three or four. They triple and quadruple the premiums."

"Shocking irresponsibility by the regulator"

Lashman leveled sharp criticism at the helplessness of law enforcement and the government: "Against Hamas, the IDF fights, but against economic crime they send the contractors, the restaurateurs and the industrialists to fight alone. This is shocking irresponsibility by the regulator! You can't send helpless people to fight guys who come, burn and threaten."

He said he has participated in numerous Knesset committees, Economics, Law and Justice, Negev and Galilee, but encountered indifference. "The general feeling is that there's apathy. People are afraid to file complaints with the police because the moment they complain, they're marked, they lose their insurance and they enter immediate life-threatening danger."

800 collapses a year: "On the way to becoming a third-world country"

The price of the abandonment is already being paid on the ground. "In the last two years, there are 800 collapses of execution companies every year! The execution sector has weakened greatly," Lashman revealed.

Construction in Jerusalem (Photo: Courtesy of the photographer)

This collapse, he said, will hit every citizen of Israel in the coming years: "Today they're building over 200,000 apartments, but to populate them you need infrastructure and sewage treatment facilities. In three to four years, 100,000 empty apartments will be standing here without a Form 4 because there's no infrastructure, and the tenants won't be able to move in."

Lashman concluded with harsh words: "If this continues, in terms of infrastructure, the ability to leave your house and the ability to obtain an apartment, we're going to be a third-world country. There's neglect here and contempt for the quality of life of citizens. The vision is short-term and this conduct is simply lethal to the state."