(photo credit: YAAKOV LAPPIN)
The Israel Police's National Fraud Unit arrested on Thursday businessman Avigdor Kelner on suspicion of involvement in the Holyland real estate bribery investigation - described by law enforcement officials as the most severe episode of corruption that has surfaced
in Israel's history.
Kelner, 67, managed the Polar Investments company between 1996 and 2007, and had majority stock ownership in the the Holyland Park and Zera companies.
He is suspected of paying hundreds of thousands of shekels in bribes via companies he owned to public officials in the Jerusalem municipality in order to promote the Holyland residential development.
A partial media ban remains in place on details of the investigation.
It appears likely that police suspect money reached members of the municipality's planning and construction committee, as well as other officials whose approval was required for construction to go ahead.
Other possible suspicions against Kelner include paying bribes to Israel Lands Authority employees in order to ensure that the Zera company received several plots of land which it then developed. The illicit funds allegedly enabled the Zera company to stray from
original plans for certain plots of lands and develop alternative projects on the properties.
Rishon Lezion Magistrate Judge Avraham Haiman extended Kelner's custody by six days.
Kelner was arrested on insider trading suspicions in 2007, prompting his resignation from Polar Investments.
He has also been linked to a previous corruption investigation which led to the indictment of Israel Lands Authority senior official Oded Tal. Tal has been charged with receiving bribes from Kelner and businessman David Appel. While Appel and Tal were indicted, Kelner
escaped prosecution and appears in the case as a state witness.
Earlier on Thursday, former National Fraud Unit investigator Dep.-Cmdr. (ret.) Boaz Guttman told The Jerusalem Post
Uri Sheetrit, former chief Jerusalem Municipality engineer, who was
arrested on Tuesday on suspicion that he dropped his initial opposition
to the Holyland project in Jerusalem and became a supporter after
accepting very large bribes, had been under the police's "magnifying
glass" for several years.
"Sheetrit has been on the police's
radar for a while. Information in the National Fraud Unit's possession
has tied him to problematic projects. His name is known to me from past
checks of real estate projects," Guttman said. "But until now, police
were unable to put it all together and see the bigger picture. The
breakthrough usually takes place when someone comes forward with
Under modern Israeli law, prosecution of suspects
on bribery charges requires police to prove that money was transferred
to a recipient and that favors were granted in exchange for the funds,