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State Attorney Eran Shendar ordered police on Tuesday to begin a criminal investigation into allegations that Prime Minister Ehud Olmert intervened in the government tender for sale of a controlling interest in Bank Leumi on behalf of two of his friends and business associates.
"The results of the preliminary investigation led to the conclusion that there is enough evidence to warrant opening a criminal investigation," Justice Ministry spokesman Moshe Cohen announced in a press communique.
Officials in Olmert's office responded Tuesday evening to Shendar's decision by saying that Olmert would cooperate fully with the investigation, and that there was no question that he would "be found innocent."
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The officials said Olmert's behavior in the matter was completely "correct and legal" and that he was advised during the sale process by the Finance Ministry's legal advisers.
The officials pointed out that Olmert would be the fourth prime minister in a row to come under a criminal investigation, and they expressed their belief that this investigation would also not lead anywhere, just as was the case with the investigations of Binyamin Netanyahu, Ehud Barak and Ariel Sharon.
Tuesday's decision is the result of an investigation into the tender procedure that was originally begun by State Comptroller Micha Lindenstrauss in January 2006. The key witness in the investigation was Accountant-General Yaron Zelekha, who, during testimony before the state comptroller, accused Olmert, then-acting finance minister, of interfering in the tender procedures to help his friends, American businessman Daniel Abram and Australian businessman Frank Lowy.
Lowy dropped out of the running two days before the tender was closed.
Abram did not submit a bid but afterwards joined the group that had won the tender and now wanted to exercise its option to purchase another 10 percent of the bank.
Zelekha testified before the state comptroller in April 2006. Three months later, Lindenstrauss decided to halt his investigation and handed over the material he had gathered to Attorney-General Menahem Mazuz. On October 25, after learning that Mazuz was dissatisfied with the way he had handed the matter over to him, Lindenstrauss sent an official letter to the attorney-general in accordance with the State Comptroller's Law, according to which he is to inform the state comptroller of any suspicions of criminal behavior that arise out of his investigations.
Four days later, on October 29, Shendar ordered the police to conduct "preliminary investigations" to study the potential significance of the state comptroller's findings and to question other witnesses involved in the sale of Bank Leumi.
In the wake of the results of the preliminary investigation, Shendar decided Tuesday to order a full-fledged investigation.
Mazuz has disqualified himself from taking part in the investigation of Olmert because his sister, Yamima, is a legal adviser in the Finance Ministry and was involved in the tender procedure.
As early as July, when Lindenstrauss handed over the material to the Justice Ministry and said he would stop investigating the matter, Shendar appointed a team of three attorneys in his office to look into the matter. According to reports, the team came to harsh conclusions regarding Olmert's conduct in the affair and one of the attorneys recommended opening a criminal investigation immediately instead of holding a preliminary investigation.
Olmert is not the first person to serve as prime minister while undergoing a police investigation. His two predecessors, Ariel Sharon and Ehud Barak, were also in office while being investigated. Although each case is supposed to be decided on its own merits, it seems very unlikely that Mazuz or the High Court of Justice will order Olmert to suspend himself while his investigation is taking place.