Police extend tax director's remand

Say evidence the suspects in fraud case is "very solid."

By REBECCA ANNA STOIL
January 2, 2007 10:30
3 minute read.
Police extend tax director's remand

shula zaken 298 AJ. (photo credit: Ariel Jerozolimski [file])

 
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Police emphasized Tuesday night that Prime Minister Ehud Olmert is not a suspect in the bribery scandal that led to the arrest of Olmert's longtime bureau chief and most of the top leadership of the Tax Authority. Shula Zaken, one of Olmert's most trusted associates, was one of 22 suspects arrested Tuesday morning in Operation Open Card, in connection with a scandal in which, police believe, businessmen influenced the appointment of senior officials and tax assessors at the Israel Tax Authority in exchange for receiving tax breaks. After posting NIS 100,000 bail, Zaken was released for 10 days of house arrest on Tuesday night, and forbidden to enter the Prime Minister's Office or to leave the country for the next 14 days. "As far as we're concerned there is no connection between the Prime Minister's Office and this scandal other than Shula Zaken," Ch.-Supt. Mickey Rosenfeld told The Jerusalem Post late Tuesday, adding that nobody else from the office - including Olmert - had been questioned. Police also arrested Tax Authority head Jacky Matza, his immediate predecessor, Eitan Rub, Zaken's brother, Yoram Karshi, and businesspeople Yoram Ela, Sima Toboul and Kobi Ben-Gur. On Tuesday night, the Tel Aviv Magistrate's Court extended Matza's remand by six days. The four lead suspects are Zaken, Karshi, Rub and Ben-Gur. Karshi, whose remand was extended by nine days, is suspected of taking advantage of his proximity to both Tax Authority officials and his sister to involve influence appointments to the authority. Police believe that Karshi - a member of the Jerusalem City Council - may have been one of the businessmen who allegedly influenced Matza's appointment. Police said they believed Matza had arranged for the businessmen's taxes to be lowered, and that Rub, even after leaving his position at the Tax Authority, was involved in establishing contact between the businessmen and Matza. National Fraud Squad detectives said they suspected Matza of involvement in both accepting and offering bribes, fraud, violation of public trust and aiding in illegal appointments. Ten months ago, police said, the National Fraud Squad (NFS) began to examine allegations that Tax Authority appointments - including that of Matza himself - had been influenced by powerful businessmen. Police suspect that after these people were appointed, the businessmen would approach them for preferential treatment in tax assessments. As part of the investigation, then-NFS head Dep.-Cmdr. Miri Golan ordered a wiretap on Zaken's office phone, after suspicions arose that Zaken was involved as a go-between, in contact with the businessmen and Tax Authority officials. The existence of the wiretap was only revealed when its results were used as evidence during the ongoing sexual harassment trial of former justice minister Haim Ramon. Golan was reprimanded for the use of the wiretap, but the legality of the evidence has been confirmed in court. In addition to the arrests, police searched 20 of the suspects' houses and searched the Tax Authority offices in both Tel Aviv and Jerusalem for documentary evidence. All of the suspects, including Zaken and Matza, were taken to the NFS's Petah Tikva offices for questioning. Zaken's attorney, Micha Patman, said his client, who was questioned under warning for eight hours on Tuesday, was cooperating with police. "She denies the suspicions against her. We agreed to release with restricted terms and she is happy to return home this evening. Shula Zaken did not bring about appointments in the Tax Authority," Patman said. Patman confirmed that Zaken's office and home had been searched, and said that only one item had been taken from her house. Zaken's absence from work, he said, would not affect the daily management of the Prime Minister's Office. "People are frequently on leave or overseas and the office continues to function. The first phone call [Zaken made] was to the Prime Minister's Office, telling them that she would not be coming to work. All of this investigation surprised her. I believe that in the coming days, she will also speak with the prime minister, but obviously not about matters related to the investigation." According to the police request for her remand extension, Zaken is suspected of "illicit involvement in the appointment of Jacky Matza," accepting bribes, fraud, violation of public trust and interfering with a police investigation. Matza, 38, is an accountant who began to work in the authority's Income Tax Division in 1993, and worked in the private sector from 1997-2000 before returning. He was deputy director for professional matters when he was appointed to lead the authority in January 2006.

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