New allegations about Leumi tender surface against PM

October 25, 2006 00:00
4 minute read.

Attorney-General Menahem Mazuz said Tuesday he has referred allegations that Prime Minister Ehud Olmert intervened in the tender for the controlling stake in Bank Leumi to the state attorney. Meanwhile, a senior official in the State Comptroller's Office told the Knesset's State Control Committee that additional information had been uncovered regarding allegations that Olmert made political appointments in the Authority for Small and Medium-Sized Businesses during his term as minister of industry and commerce. Regarding the Bank Leumi allegations, Justice Ministry spokesman Moshe Cohen wrote on Tuesday that "a few weeks ago, the state comptroller handed over to the attorney-general material related to a tender for the sale of the core control of Bank Leumi. As is customary, the attorney-general handed the material to the state attorney to examine and prepare an opinion regarding what to do with the material. At this point, no decisions have been taken, there is no criminal procedure and the police are not involved in the matter." "After the report was published, we discovered new material," said Ya'acov Borovsky, head of the Anti-Corruption Unit in the State Comptroller's Office. "The material links Olmert and the directors of the ministry to the political appointments referred to in the report. The additional material and the report were sent to the attorney-general along with our opinion that they raise suspicions of criminal activity." The Knesset State Control Committee delayed the meeting finally held on Tuesday for two months because Olmert said he was too busy until then to appear before it to discuss the report. However, on Friday, Olmert's aide, Yoram Turbovich, informed acting committee chairwoman Estherina Tartman that the prime minister could not attend because of an urgent security meeting. Tartman said Olmert's decision was "mistaken and incorrect." United Torah Judaism MK Moshe Gafni went a step further, calling Olmert a "coward." The Leumi allegations were first raised by journalist Yoav Yitzhak on October 15 on his Internet newspaper Web site, News First Class. Yitzhak charged that after Olmert was appointed acting finance minister in August 2005, he intervened in the tender for the privatization of Bank Leumi on behalf of several personal friends with whom he also had business connections. One of them was Daniel Abrams. Abrams had contributed to Olmert's election campaign for mayor of Jerusalem, bought his apartment on Jerusalem's Rehov Kaf Tet B'November and rented it back to Olmert at an allegedly low fee. Yitzhak charged that while the tender bids were being accepted and several of Abrams friends were trying to get him involved, Olmert did not reveal the special relations between them. Another close friend of Olmert's, Frank Louis, an Australian Jewish businessman, also made a bid for control of the bank. Louis was represented by a law firm whose owner was Olmert's brother-in-law, Yossi Gross. Yitzhak wrote that since Louis lost the bid, another friend of Olmert's, Alfred Akirov, has been trying to persuade the winners to involve the law firm in Bank Leumi. The material regarding the alleged political appointments in the Authority for Small and Medium-Sized Businesses is also currently being examined by the state attorney. Borovsky said the state comptroller handed over the report and the additional material on September 3. The procedure in this case is identical to that of Yoav's allegations regarding Olmert's conflict of interests. During an interview on Channel 10 on September 19, Mazuz said he would have to decide soon whether to order the police to launch a criminal investigation into the matter. Olmert served as minister of industry and commerce from 2003 to 2006. The ministry director-general was Ra'anan Dinur. According to the State Comptroller's Report, "at the beginning of 2004 the directors of the ministry, headed by Ehud Olmert and Ra'anan Dinur, took action to change the authority's in-house rules so they could have more flexibility in appointing the chairman and allocating the budget. By doing so, they increased their ability to manage the affairs of the authority and control it. After changing the in-house rules, the ministry directors used the authority as a cushion for making political appointments through improper procedures." State Comptroller Micha Lindenstrauss pointed out that the head of the authority appointed a deputy director-general, Lilach Nehemia, who had been rejected by the Ravivi Committee for another job because of her political connections with the Likud. After her appointment, 14 people were appointed to run projects funded by the authority, including three who were Likud Party members. One of the three projects was halted after one month but the manager, Yitzhak Michaeli, was paid NIS 140,000. Ya'acov Padida, the head of another project, did not submit monthly work reports and it was unclear what he did to earn the NIS 196,000 he was paid. The third manager, Shimon Moshe, was given a project after Olmert had chosen him as his candidate for the post of deputy head of the Employment Service. However, the Ravivi committee rejected his candidacy because he lacked the necessary educational qualifications. He got the project management job almost immediately after being forced to leave the Employment Service. Dinur rejected the charges included in the report. He said Moshe got the job because of his overall qualifications rather than his political connections. He added that neither he nor Olmert had anything to do with the Michaeli and Padida appointments. Dinur also denied that the changes in the in-house rules had been introduced to make it easier to make political appointments. He argued that the ministry had made efforts to turn the authority into a statutory body that would place it under the supervision of the Civil Service Commission and make public tenders mandatory for most jobs. "This is inconsistent with the claims of the state comptroller," said Dinur.

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