Legal affairs: Ehud Olmert is hit for six, but will he be bowled out?

Attorney-General Menahem Mazuz announced this week that he would not order Prime Minister Ehud Olmert to suspend himself because it was not his job to do so.

olmert 224 (photo credit: Ariel Jerozolimski)
olmert 224
(photo credit: Ariel Jerozolimski)
Attorney-General Menahem Mazuz announced this week that he would not order Prime Minister Ehud Olmert to suspend himself because it was not his job to do so. The latest calls by politicians and others for Mazuz to suspend Olmert were triggered by the disclosure that police had begun a sixth investigation into allegations of corruption against him. But Mazuz insisted he had not changed his mind after saying the same thing following damaging testimony against Olmert by New York financier Morris Talansky in Jerusalem District Court in late May regarding the fifth allegation of corruption against the prime minister. The responsibility for taking measures against Olmert at this point lies with the public and political echelons, said Mazuz. "You must not sit on the sidelines and only wait for judicial procedures," he said. "The public must respond to the conduct of public figures." In fact, something actually has been done to end Olmert's premiership. Following Talansky's testimony, Labor Party leader Ehud Barak warned Olmert that Labor would leave the government unless he agreed to hold primaries in Kadima to elect a new party leader. Olmert promised to do so, but did not say when. Barak then threatened to join a Likud-sponsored bill to hold new elections. Olmert caved in again and a date for the Kadima primaries was set in mid-September. Given the near certainty that the prime minister will not run in the primaries, his political career appears to be drawing to an end. At any rate, there seems to be no practical justification for demanding that Mazuz order Olmert's immediate suspension since his days in office are already numbered. Even after he leaves office, however, Olmert will still face serious legal problems, the fruit of a highly controversial political career. At this point, the police have finished investigating one affair, which they have handed over to the state prosecution for final decision, and are in various stages of investigating the other five. The police launched the first investigation against Olmert on January 16, 2007, regarding what has come to be known as the Bank Leumi Affair. On September 24, 2007, Mazuz ordered the police to investigate allegations pertaining to Olmert's purchase of a house on Rehov Cremieux in the German Colony neighborhood of Jerusalem. On October 14, police began investigating two separate affairs involving Olmert's conduct while serving as minister of industry and trade. One concerns alleged political appointments in the Small and Medium Businesses Authority. The other involves charges that he gave favorable treatment to the clients of his close friend and former law partner Uri Messer at the Investment Center. The fifth investigation, known as the Talansky Affair, became public at the beginning of May, after the courts lifted a gag order prohibiting details of the investigation which had already gotten underway. And just last week, the latest investigation was disclosed when police questioned Olmert over allegations that he had double- and triple-billed non-profit organizations for trips he had made to raise money on their behalf. 1. Bank Leumi tender: According to the allegation, Olmert, who was serving as acting finance minister in 2005, changed the terms of a tender that the government was about to issue for the sale of core ownership of Bank Leumi. The criminal investigation was preceded by an investigation by State Comptroller Micha Lindenstrauss. The key witness in the affair is former accountant-general Yoram Zelekha, who charged that Olmert had interfered with the terms of the tender in order to help his friend, Australian businessman Frank Lowy. Zelekha complained that Olmert had improved the terms of the tender by allowing the winner to purchase 20 percent (originally 10 percent) of the bank's shares. He also delayed the publication of the tender by two weeks. After questioning Olmert twice, the police completed their investigation on November 30, 2007 and recommended closing the case for lack of evidence. Mazuz, who normally would have made the final decision on whether to indict a prime minister, suspended himself because of the involvement of his sister, Yamima, a Finance Ministry legal adviser. State Attorney Moshe Lador has not yet decided whether to indict Olmert or close the file. 2. The House on Rehov Cremieux: The affair was first raised by Yoav Yitzhak, who edits the Internet news site News First Class. Leading up to it were allegations that Olmert had been involved in shady deals regarding two other homes that he owned, but nothing came of these suspicions. However, on February 4, 2007, Yitzhak charged that Olmert had taken a bribe of $320,000 by purchasing a home far below market value. In return, he allegedly promised to help the land developer and building contractor, a company called Alumot, obtain favorable terms from the Jerusalem Municipality so that he could increase his building rights on the property. Lindenstrauss investigated Yitzhak's allegations and decided to hand over his findings to Mazuz to determine whether Olmert had committed a crime. In response, Olmert demanded that Mazuz order a police investigation of Lindenstrauss. The investigation is still under way and Olmert has not been questioned yet. Earlier this week, police questioned his close aide, Shula Zaken, on the matter. 3. Political appointments in the Business Authority: The police investigation into allegations that Olmert made political appointments while serving as minister of industry and trade was the direct outcome of a report published by the state comptroller on August 28, 2006. According to the findings, Olmert and ministry director-general Ra'anan Dinur appointed Lilach Nehemia to the newly created post of deputy director-general of the authority. Nehemia had been the aide of Olmert's close friend, Avraham Hirchson, who is currently on trial on suspicion of stealing NIS 2.5 million from the National Workers' Federation. Nehemia, in turn, appointed three new project managers who were members of the Likud central committee. Lindenstrauss wrote that the appointments were made improperly and without giving others a fair chance. The investigation is still under way and Olmert has not yet been called up for questioning. 4. The Investment Center: This affair was first discovered by Haaretz, which published an investigative report on August 31, 2006, charging that Olmert was guilty of a conflict of interest because he participated in applications for government grants made by the clients of his close friend and former law partner Uri Messer. Haaretz charged that Olmert personally dealt with most of the grant applications by Messer's clients. Lindenstrauss launched an investigation into the allegations and published a report on April 25, 2007, charging that Olmert had intervened in a request by Silicat Industries for status as an approved industry so that it could be eligible for a $10 million grant. Silicat was represented by Messer. The ministry approved the request in less than six months from the time the negotiations began. Lindenstrauss concluded that Olmert was guilty of a conflict of interest and should have stayed out of the negotiations because of his friendship with Messer. Once again, he handed the findings to Mazuz. Olmert announced that he had lost all confidence in the state comptroller, whom he accused of conducting a personal vendetta against him. The investigation is still under way and Olmert has not been questioned yet. 5. Talansky's cash: The origins of the investigation are unclear. Police called Talansky in for questioning a few days after his arrival in Israel to celebrate Pessah with his family. According to the allegations, the American-Jewish businessman gave Olmert $150,000 in cash over a 10-year period, allegedly to help him in four election campaigns, including two for mayor of Jerusalem and two Likud primaries. In addition, Talansky allegedly gave Olmert tens of thousands of dollars contributed by American Jews who attended campaign dinners for various Israeli and American Jewish philanthropic organizations. Talansky said this money went to upgrade Olmert's flight tickets and hotel rooms. During a pre-trial testimony on May 27, Talansky was also questioned about the possibility that he had given Olmert more than $200,000 to cover debts from his 1998 Jerusalem mayoralty campaign. Although Talansky has been questioned in court by the state prosecution and is currently being cross-examined by Olmert's lawyers, the police have not completed their investigation. So far, they have questioned the prime minister twice over this affair. 6. Double- and Triple-Billing trips: The latest of the investigations began five weeks ago and became public last Friday, after police questioned Olmert on the matter for two hours. The prime minister is suspected of having sent bills to more than one non-profit organization for trips that he made abroad to raise money for them. When he spoke on behalf of two or three different non-profit organizations on the same trip, he would charge each of them the full flight fare. According to the allegations, the extra money went into a special account managed by Rishontours, his travel agency, and was used to pay for private trips made by him and his family. Police estimate that he collected $110,000 by this system. Currently, almost no money remains in the account.