AG may sanction PM over Leumi affair

Attorney Yossi Fuchs to petition High Court to order Mazuz to suspend Olmert.

By JOSHUA BRANNON, DAN IZENBERG, AMIR MIZROCH
mazuz 248.88 (photo credit: Ariel Jerozolimski [file])
mazuz 248.88
(photo credit: Ariel Jerozolimski [file])
Attorney General Menahem Mazuz said Thursday he had not ruled out the option of sanctioning Prime Minister Ehud Olmert's powers in accordance with any revelations made in the criminal probe into Olmert's role in the 2005 privatization of Bank Leumi. The probe officially got underway Wednesday, but was overshadowed as the prime minister was delivered another blow in the form of the resignation of IDF Chief of General Staff Lt.-Gen. Dan Halutz. Attorney Yossi Fuchs, who petitioned the High Court of Justice to suspend President Moshe Katsav because of the continuing police investigation into sexual harassment claims against the president, announced Thursday he would petition the High Court to order Mazuz to suspend Olmert from his duties as prime minister. Fuchs wrote a letter on Wednesday asking Mazuz to suspend Olmert for the same reason as Katsav, and had asked Mazuz to reply within three days so that he would have time to petition the High Court if Mazuz refused his request. In the case of Olmert, Fuchs pointed out, Mazuz was under no legal constraints. "In the matter of the prime minister, you have the authority to declare that he is temporarily unable to carry out his duties, and there is nothing in the Basic Law that grants him any further immunity," wrote Fuchs. Police officials also denied reports that Bank of Israel Governor Stanley Fischer, or any other party for that matter, testified before police on Wednesday about the Leumi sale, as had been reported by Israel Radio. Officials also denied reports of police searches. The report was most likely referring to statements made by Fischer to two senior police officers at his Bank of Israel office six weeks ago, during the preliminary investigation following the state comptroller's report, police sources said. According to the sources, Fischer told the officers that Olmert and Accountant General Yaron Zelekha had several disagreements during the meetings in which the Bank Leumi tender was discussed. Zelekha, the sources said, filed the complaint against Olmert and is the key witness in the criminal investigation. Fischer was reportedly asked to keep the two-hour meeting confidential. Police said Olmert would likely be the last person questioned, after all relevant evidence had been collected and investigators were better able to determine if, and how, he had been involved in any interference with the Leumi tender. Authorities suspect that Olmert, while finance minister, demanded changes to the tender to improve the chances that his associate, Australian billionaire Frank Lowy, would win it. Channel 10 reported that investigators had obtained a document listing some of the changes made in the conditions of the tender. The report alleged that Lowy presented the document during a meeting with Bank Leumi officials, and that Olmert referred to the same document when he asked for the changes. Reports earlier this week indicated that the piece of evidence that might have persuaded State Attorney Eran Shendar to order a criminal investigation into Olmert's alleged role in the Leumi scandal was a piece of paper bearing the logo of a hotel in which Lowy had stayed in New York. Lowy allegedly wrote down the changes he wanted to see and read them out to officials during a meeting in the US. Olmert was reportedly seen later with the same piece of paper and referred to it when he changed the terms of the tender, ostensibly to make it more attractive to all bidders. While there were no new developments on Wednesday in the criminal investigation, officials said police investigators had previously spoken with several parties reportedly involved in the sale of the Leumi stock, including individuals who had not been questioned in State Comptroller Mica Lindenstrauss's audit. Lindenstrauss's report and testimony from Zelekha brought Olmert's alleged interference to the attention of legal authorities in the first place. According to sources familiar with the sale, only after these unnamed individuals were questioned did Shendar decide to proceed with a formal criminal investigation. Police Insp.-Gen. Moshe Karadi announced Tuesday night that the probe would be carried out by the National Fraud Unit, the same unit that handled the earlier examinations. In a related development, the watchdog organization Ometz wrote to Mazuz, asking him to examine whether Olmert's lawyer, Eli Zohar, had a conflict of interest in the case. Zohar represents both Karadi and Olmert, who is now being investigated by Karadi's subordinates. Ometz pointed out that their group had complained about the alleged conflict of interests in the past, and that Mazuz had replied that so long as Olmert was not under investigation, there was no reason to consider their complaint. Now, wrote Ometz, the situation had changed, with Zohar representing Karadi in his dealings with the Winograd and Zeiler Commissions. Lowy welcomed the announcement of the inquiry into the Bank Leumi sale. The Lowy Family Group was invited to join an international consortium to take part in the tender process for the sale of the shares. The consortium decided to pass, and has not been involved since. Lowy categorically rejects any suggestion that he or anyone acting on his behalf behaved improperly and is confident the inquiry will bear this out, he said in a statement. Lowy has known Olmert for many years but, contrary to some media reports, has never made a financial contribution to Olmert or to any political campaign associated with him, the statement continued.