(photo credit: Ariel Jerozolimski [file])
State Comptroller Micha Lindenstrauss said Sunday he would inform Attorney-General Menahem Mazuz of his suspicions that Petah Tikva Deputy Mayor Sinai Gilboa was guilty of conflicts of interest that could be criminal in nature.
Lindenstrauss issued a special report on the actions of Gilboa and Petah Tikva mayor Yitzhak Ohayon in connection with a local town planning scheme that included a large plot of land belonging to the Dan bus cooperative.
Ohayon is head of the Petah Tikva city planning council and Gilboa, who represents the Shas Party, is the deputy head of the council.
The plan was presented to the public on November 2001 according to a fixed legal procedure in which members of the public had two months to register complaints about the plan's provisions.
According to the plan, the Dan plot, which included a parking lot for buses, was included in a much larger municipal area earmarked for reparcellation and redevelopment. In return for taking over the Dan plot, the city gave the bus company the right to build 7,920 square meters of residential housing in 64 apartment units.
During the period allotted, Dan submitted a complaint, asking the local planning authority to grant it building rights to the tune of 27,000 square meters. It backed its demand by arguing that the city had given the company a permanent business permit in 1977.
The local planning council and the planning appraiser rejected Dan's complaint, and subsequent negotiations between the bus company and Petah Tikva town planning professionals failed. The local council recommended to the district planning council to reject Dan's complaint, which the district committee did in November 2002.
That same month, then-Dan general-manager David Hermesh asked Ohayon to reconsider his position. Ohayon agreed, and on November 24, 2002, he asked the district planning council to reconsider Dan's complaint.
On January 2, 2003, Gilboa informed Dan that there was a valid town planning scheme from 1957 which granted the company building rights for a garage on their plot. One day later, Dan signed a contract with "Harel Dvir Properties and Construction," a company owned by Gilboa's wife. Gilboa himself is the only manager of the company. According to the contract, the company would try to increase Dan's building rights in the plan and would receive a fee of 2.625 percent of the value of any additional floor space or apartments granted to Dan.
On the same day, Dan also signed a contract with Gilboa, giving his law office rights to the sale of all the apartments that Dan would be allowed to build at 2% per transaction.
Lindenstrauss estimated the value of the first contract to Gilboa at $1.8 million and the second at $1.5m.
Soon after the contracts were signed, Ohayon met at his home with Hermesh and agreed to leave Dan's plot of land intact and outside the planning scheme, and to allow the bus cooperative to build 288 apartment units.
In July 2003, the Petah Tikva planning council decided to recommend to the district planning committee to accept Dan's demands, including detaching the plot of land from the town planning scheme, granting it permission to build 350 apartment units.
Gilboa did not participate in the committee meeting on the Dan issue, but Lindenstrauss wrote that both he and the mayor influenced its outcome.
In February and March 2004, Dan paid Gilboa a total of $1.5m. In March 2005, Gilboa urged Dan to ask for permission to build another 60 units, for which both he and his wife's company would have received additional income. The planning committee rejected the request.
According to Lindenstrauss, "in providing services to Dan, Gilboa involved himself in a clear act of conflict of interests. He exploited his public position and his connections with the municipality and the planning committee to advance his own private interests and to receive benefits."
Lindenstrauss added that in his response to the state comptroller's queries, Gilboa told him that his relations with Dan were purely business. He invested many hours in the work, he said, and did not conceal the fact and that he had done so to speed up the implementation of the planning scheme and prevent legal delays, and that this was in keeping with the public interest.
Gilboa added that he had made sure not to represent Dan in the local planning committee meetings, but only before the district planning committee. Therefore, he maintained, there was no conflict of interests.
Lindenstrauss rejected Gilboa's defense of his actions. He wrote that it was not enough that he had not participated in local planning committee meetings. He had used his influence on the planning committee and the Petah Tikva municipal council on Dan's behalf even without sitting in on the meetings involving his clients.
"Gilboa's conduct regarding Dan is not appropriate for an elected official," concluded Lindenstrauss. "Because of the seriousness of facts presented in this report and given the concern that Gilboa may have been involved in conflict of interests on other occasions during his years on the municipal council, the state comptroller has decided to inform the attorney-general about this matter, as is required by law."â€¢