Two suspects in tax scandal released

Allegations made against Olmert based on speculation police tell 'Post.'

By REBECCA ANNA STOIL
January 3, 2007 05:40
4 minute read.
Two suspects in tax scandal released

shula zaken 298 AJ. (photo credit: Ariel Jerozolimski [file])

Eitan Rub, 46, former director of the Tax Authority is expected to be released on Thursday afternoon following the police investigation into his alleged part in the tax bribery scandal. Rub would be released to house arrest after three days of investigation. Earlier Thursday, police released businessman Sima Toubul, another suspect in the emerging case. After the number of suspects arrested in the Israel Tax Authority (ITA) scandal jumped from 22 to 30 on Wednesday, police emphasized that the number could still grow in what may become the largest alleged government corruption ring uncovered in Israel's history. Police continued to question the suspects on Thursday morning.

  • No administrative steps taken against tax authority suspects
  • Figures in the tax scandal
  • Analysis: So how bad is the corruption? Despite a Channel 1 report claiming that Prime Minister Ehud Olmert may be questioned in relation to the scandal, sources in the Israel Police told The Jerusalem Post that any allegations made in the media against Olmert were not based on evidence uncovered by investigators, but rather on speculation alone. "At this moment in time, there is absolutely no connection to the prime minister himself," an officer at the National Headquarters told the Post Wednesday. "On the other hand, the teams are working and the case is developing on a day-to-day basis. The case is growing - yesterday 22 were brought in and today the count is up to 30. As we know from previous investigations, these things grow, but it doesn't necessarily mean that the case will develop in the direction of deeper involvement in the Prime Minister's Office." But, the officer added, much was still dependant on the blame game that would inevitably occur behind the closed doors of the National Fraud Squad's interrogation rooms. Investigators are likely to try to turn at least one of the suspects into a state's witness, who could offer damning testimony that would go beyond the information gleaned from wiretaps and documentary evidence. Sources close to the investigation said Tuesday that Olmert's name had not been mentioned once in the months of wiretaps that police recorded in connection with the investigation. Olmert's involvement in the affair, in which businessmen allegedly arranged for the nomination of key members of the Tax Authority in exchange for tax breaks, has been a question since the arrest of his bureau chief Shula Zaken. Olmert was finance minister when Tax Authority chief Jackie Matza was appointed, and his approval was necessary for Matza's appointment to take effect. Detectives suspect that Zaken's brother, Yoram Karshi - another lead suspect in the case - worked to ensure that Matza would take over for former ITA head Eitan Rub, who left the office in January 2005. But Navot Tel Tzion, Matza's attorney, emphasized that his client was nothing more than an honest and highly successful public servant. "It was a very professional appointment of a very honest person" Tel Tzion said Wednesday. Zaken, who was one of the suspects arrested Tuesday in connection with the scandal, was questioned for a second time Wednesday morning. Her interrogation at the National Fraud Squad's Bat Yam headquarters came hours after a late night court appearance at the end of which she was remanded to 10 days of house arrest. The ITA was sent into a tailspin Wednesday, as its offices continued to operate despite the arrest and imprisonment of Matza, his predecessor Rub, and two assistant directors. Dozens of other ITA employees, particularly appraisers, were also called in for questioning. Police said Wednesday night that 20 ITA employees were currently suspected of involvement in the affair, and emphasized that more arrests were expected in the near future. One of the detectives involved in the case said Wednesday that the version of events Matza presented under questioning directly contradicted evidence the police had collected during their investigation. Police would not, however, elaborate on what the evidence was, or what part of Matza's account had allegedly been proven false. The potential charges against the ITA head include accepting and offering bribes, fraud, violation of the public trust and aiding in illegal appointments. Despite reports circulated Wednesday morning that Finance Minister Avraham Hirchson was considering appointing a temporary replacement for the embattled ITA chief, Hirchson's office announced later in the evening they had no such intention. The finance minister said in a speech that he wished to "strengthen those who work under this ministry" and met with the remaining ITA leadership to discuss the implications of the scandal. Hirchson also met with Olmert Wednesday to discuss how to ensure that the ITA continued to function despite Matza's arrest. Sources close to the prime minister said Olmert was very troubled by the prevailing atmosphere in light of the scandal and was concerned that the public's trust in the ITA was being undermined. The investigation was opened approximately 10 months ago, after police began to examine allegations that Tax Authority appointments - including that of Matza himself - had been influenced by powerful businessmen. Police suspect that after these suspects were appointed, businessmen would approach them for preferential treatment in tax assessments. Businessmen Kobi Ben Gur, Yoram Ela are all suspected of arranging the appointments of and establishing contact with members of the ITA, especially tax appraisers, in order to gain reduced tax burdens. Police believe that Karshi - a member of the Jerusalem City Council and dealer in Judaica - may have been an intermediary and beneficiary in the arrangements. Toubul, who owns two Jerusalem restaurants and deals in building materials, was suspected of using his contacts in the ITA to interfere with an ITA probe against him, coming out of the affair with a lightened tax load.


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