The total damages come to 4 million shekels ($1.19 million), to be paid in annual installments, to the family of Ben Zygier, Haaretz reported. Zygier, who held joint Australian-Israeli citizenship, hanged himself in 2010 while he was being held as "Prisoner X" in an isolation cell in Ayalon Prison.
The government said it was making the payments to keep further details about the case secret, the Jewish Telegraphic Agency reported. Israel has not disclosed why Zygier was arrested or what charges he faced, although the Australian Broadcasting Corp. has said he allegedly sabotaged an operation to recover the bodies of slain soldiers.
"The reasons the state agreed to pay this sum stemmed from its desire to avoid a court hearing in which details that could harm national security might be revealed," the Justice Ministry said in a statement Wednesday, adding that there has been no admission of responsibility for Zygier's suicide.
The suicide and Zygier's alleged status as an agent for Israel's famed secret intelligence agency only became public in February. The disclosures were widely publicized in Israel and in Australia, where Zygier was born.
A report released in April said failures in the prison system helped cause Zygier's death but did not rise to the level of criminal misconduct by any officials. It said Zygier saw three psychiatrists and met with social workers 57 times during his 10 months behind bars.
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