Witness: Olmert and Lupolianski took bribes

Ex-PM’s spokesman: Holyland trial built on witness with feverish, lying mind; identity of key state witness S.D. remains protected.

July 2, 2012 02:40
Ehud Olmert arrives at J'lem court for trial

Olmert arriving at trial 311. (photo credit: Marc Israel Sellem)


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The Holyland trial, holding in the balance the fates of former prime minister Ehud Olmert, former Jerusalem mayor Uri Lupolianski, former Bank Hapoalim CEO Dan Dankner and 13 other well-known defendants, kicked off on Sunday with the state’s key witness testifying.

Two dozen defense attorneys and reporters from every major network and newspaper in the country were jam-packed into a small courtroom on the sixth floor of the Tel Aviv District Court before Judge David Rozen.

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In his first day of testimony, the state’s main witness declared that the Holyland Affair could “never have happened” without Olmert. He also said that businessman and owner of the Holyland corporation Hillel Cherny was “absolutely involved” in every aspect of the affair.

Regarding Olmert, “S.D.” said that when they met to discuss the real estate initiative, Olmert questioned him in a detailed fashion both regarding the development and about how Olmert would get “reimbursed” for assisting with project approvals. According to his testimony, at the end of one meeting, Olmert told S.D. that he should turn directly to him for any help he needed with getting government approvals.

A spokesman for Olmert said on Sunday that S.D.’s allegations against Olmert are “a collection of tales from One Thousand and One Nights, [taken] from the feverish mind of the lying” state witness.

“Instead of putting the man behind bars,” Olmert’s media adviser Amir Dan continued, the prosecution “bought his testimony for millions and continues, even today when he is testifying, to hide from the public his identity and details of the many things promised him.”

The identity of S.D. has been and will continue to be protected by court order even as he began his testimony in open court. Defense attorneys renewed a previously made objection to the order, but the court put off the issue for a separate hearing.


S.D., in his first day on the stand as part of a series of 12- hour appearances he is due to make in court nearly every day for the next two weeks, also implicated Polar Investments CEO Avigdor Kellner, Polar Investments manager Amnon Safran and Kardan Real Estate CEO Shimon Galon.

S.D. said Cherny was the mastermind of the Holyland Affair (even though S.D. said he himself initially proposed the idea) and that he served as Cherny’s chief frontman in all transactions involving the bribery of public officials to obtain favorable treatment, and in some instances to approve building plans that should have been rejected as illegal. S.D. said Cherny gave him NIS 9 million to be used during the years 1994 to 1999.

Cherny also made all decisions about who to pay bribes to, how much each official was “worth” and when to pay the bribes, the witness said. There were even instances where S.D. tried to reach a compromise with a particular public official on how high the bribe should be, and Cherny vetoed the amount as too large a bribe relative to what he conceived of as the particular official’s “fair market value” in the hierarchy of being bought off, S.D. said.

According to S.D., Cherny paid him a regular salary to meet with public officials and coordinate the advancement of the Holyland project with them.

The salary included set minimums and could be significantly increased based on how much additional profit S.D.’s fraudulent activities and bribes brought in to the project.

S.D.’s method of operation was designed to insulate Cherny from potential criminal charges and involvement in the project in general, the witness said. For example, Cherny allegedly made S.D. the in-name-only CEO of a company.

In reality, S.D. merely signed official documents to avoid Cherny needing to have his name appear, but Cherny made every decision and S.D. took no actions without his approval, S.D. said. He was not even paid specifically for his “job” as CEO of the company, since in reality all of his activities for the company were merely to cover Cherny as part of the overall fraud for which S.D. did get paid, he said.

Despite Cherny being kept at arms’ length of most of the fraudulent transactions with public officials, S.D. said that Olmert, Lupolianski, Kellner, Safran, Golan and others were all told that S.D. represented Cherny, and all knew the fraudulent nature of the Holyland project.

S.D. stated that his activities definitely paid off as the construction authorities eventually approved a significant increase in the area in which the Holyland project could be built.

Originally, the project was only approved for building on 25,000 meters of land, while eventually 311,000 meters of land were approved for construction.

Also, at first, 75 percent of the land for the Holyland project was designated for hotels, whereas only 6,000 meters were designated for residential units. However, after S.D. bribed key officials for approving construction and rezoning, 160,000 meters were approved for residential units, despite exceeding the regular construction standards for the area on an “unprecedented” scale, he said.

After more than five hours, S.D. asked to be excused for the day and to resume his testimony on Monday. He had previously asked that he only have to testify in the mornings, but his request was rejected by the court.

Apparently, now that the court has observed S.D. up-close, Rozen was more willing to show flexibility and halted the proceeding almost six hours early.

Defense attorneys on Sunday lodged a number of complaints, including alleging that the documents S.D. was presenting as evidence of the defendants’ supposedly illegal actions were forgeries.

In that light, several defense attorneys repeatedly demanded copies of the original of each document being submitted into evidence so they could investigate the possibility of tampering.

The defense attorneys especially jumped on the state’s use of S.D.’s documents when S.D. three times incorrectly referred to a photocopy he was holding as an original.

Rozen effectively postponed the discussion of the documents’ veracity by ruling that he would accept them into evidence, but withhold judgment until a later date on how much weight to assign the documents.

Accepting documents into evidence merely means that the judge will consider the possibility that the documents may be relevant to his ultimate verdict. If a document is rejected or found inadmissible, it is ignored completely as if it does not exist. If it is accepted, the judge can still ultimately decide that all or part of it is of questionable value.

The defense attorneys’ numerous objections and interruptions signaled that their strategy in the case will be to discredit S.D. at every turn, arguing that there is no reason to accept either his testimony or his documents at face value since S.D. has already admitted to lying and to helping orchestrate a massive fraud.

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