Finance Minister Avraham Hirchson made a long-awaited announcement on Sunday, saying he is suspending himself for three months so he can fight embezzlement allegations. Hirchson's lawyers said he would resign if he were indicted; legal experts speculated this was likely to happen soon.
Analysis: The waiting game at the Finance Ministry
Prime Minister Ehud Olmert, who met secretly with Hirchson on Saturday night, told the cabinet Sunday he would take over the portfolio temporarily. Olmert praised Hirchson's performance as finance minister and immediately invited top Treasury officials for a working meeting.
Olmert is expected to hold the post until at least May, when former justice minister Haim Ramon finishes serving his sentence of 120 hours of community service for forcibly kissing a female soldier without her consent, and the state would no longer be able to appeal the Tel Aviv Magistrate's Court's decision to allow him to return to the cabinet.
But Olmert's associates said he might wait until a runoff for Labor Party chairman expected on June 11 and an expected reshuffle in the cabinet. Although MK Ramon is considered the most likely candidate for the post, Interior Minister Roni Bar-On and Construction and Housing Minister Meir Sheetrit are also interested in the job. All three men are members of Kadima.
Another possible scenario mentioned by a source close to Olmert was that if MK Ami Ayalon won the Labor race, he could decide to trade in the Defense portfolio for the Finance Ministry, which he could give to his running mate, MK Avishay Braverman, a Stanford-educated economist who served in a senior position at the World Bank in Washington.
In such a scenario, Ayalon would take Defense Minister Amir Peretz's title of deputy prime minister and could replace Yuli Tamir as education minister, a post Ayalon has described as his dream job.
Representatives of Olmert and Ayalon said it was too soon for such speculation.
Labor leadership candidates praised Hirchson for quitting but said he should have done so sooner. A coalition of women's organizations released a statement expressing concern about the possibility of Ramon's return to the government.
In a statement released to the press, Hirchson complained that the public had made up its mind about his guilt without hearing his side of the story. Hirchson said he chose to avoid flinging criticism at the legal authorities, the press and the political system.
"I prefer to stay quiet even at the price of biting my tongue," he said. "I will not violate my silence even now. I believed, and I still believe, that these authorities should continue their work of finding out the truth."
Hirchson vowed to clear his name and said he preferred to be with his family during "a difficult time - one of the most difficult I have ever known."
On Sunday, new information was revealed indicating that Hirchson may have received medical treatment - including medications - worth tens of thousands of shekels - from a union he headed, over the course of six to seven years. Hirchson did not deny that the National Workers Union's coffers financed his medical treatment, but said he returned the money at a later date.
Cmdr. Yohanan Danino, head of the police's Investigations and Intelligence Division, and his star subordinate, Lt.-Cmdr. Yoav Segelovich of the National Fraud Squad met Sunday afternoon with Attorney-General Menahem Mazuz and showed him the evidence gathered in the case.
This was their third meeting, and it is expected to be one of the last before a decision is reached on whether to indict the minister. Police have repeatedly said they had enough investigative material to do so.
It is certain, however, that Hirchson will be questioned at least once more before any indictment is delivered.
The investigation concerns on the period during which Hirchson led the union. Initially, police believed that Ovadia Cohen, the former head of Nili, an organization that ran educational institutions and operated under the union's umbrella, embezzled approximately NIS 5.5 million.
But police now suspect Hirchson was the main beneficiary of the embezzled money.
At least one former Hirchson subordinate said he had seen him, as head of the labor organization, accept envelopes "full of cash" from Cohen, and police are investigating allegations that Hirchson embezzled - or laundered - money through a number of the labor organization's subsidiaries.