Morris Talansky will not come to Israel to continue his cross-examination by the attorneys of Prime Minister Ehud Olmert and his close aide Shula Zaken, due to his involvement in a similar investigation in the US, Talansky's American lawyers informed his Israeli lawyer, Jacques Chen, on Thursday. This development will not necessarily impact the police investigation or the prosecution's decision as to whether or not to indict Olmert and Zaken. The state prosecution conveyed the letter from Bradley Simon and Neal Sher to attorneys Eli Zohar, who represents Olmert, and Micha Fetman, who represents Zaken. "Since Mr. Talansky returned from Israel in connection with the ongoing investigation of Prime Minister Olmert, we have learned that he is the subject of a grand jury investigation in the United States District Court for the Eastern District of New York," Simon and Sher informed Chen. "It is our understanding that the New York federal investigation mirrors in many respects the matters at issue in the Israeli investigation. In fact, we have learned the FBI accompanied Israeli officials during their investigation in the United States. By cooperating with Israeli authorities, Mr. Talansky has placed himself in legal jeopardy in the US." The American attorneys added that Talansky would not return to Israel until "the US grand jury matter is resolved so that he is not once again placed in the position of providing testimony that will then be used against him in the United States in violation of his rights under the Fifth Amendment of the US Constitution. Accordingly, Mr. Talansky does not intend to appear in court on August 31, 2008." In response to the letter, Olmert's lawyers issued a written statement saying, "The prime minister's defense team was caught by complete surprise by the announcement of Morris Talansky's lawyers that he does not intend to return to Israel to resume his cross-examination. In the coming days, the defense team will consider the grave consequences stemming from his decision." Meanwhile, the state prosecution issued a statement saying that the reason it had insisted that Jerusalem District Court hear Talansky's testimony in pre-trial hearing was out of concern that he might not return to Israel once he left the country. The Justice Ministry spokesman also stressed that when Olmert's lawyers had asked to postpone their cross-examination of Talansky by two months instead of questioning him immediately after the state, they had said they were prepared to take the risk that he would not return. "Nevertheless," the spokesman continued, "we hope that in the end, despite the attorney's statement, Talansky will be able to return to Israel to complete his testimony." At the same time, Talansky's public relations firm, Morell-Tzur Communications, issued a statement reminding the state prosecution that "at the beginning of the hearing, the state prosecution said in court that Mr. Talansky would not be hurt in any way by his testimony. "While he was testifying, based on the information he gave during his interrogation by police, Israeli investigators, in cooperation with American authorities, conducted an inquiry which apparently led to the launching of an investigation against him by US authorities," the statement continued. "We expect the state prosecution to do everything necessary to keep its promise to Talansky so that he can return to Israel to continue and complete his testimony." Meanwhile, Yehoshua Reznik, Chen's law office partner, wrote to State Attorney Moshe Lador that Talansky's decision not to return to Israel "created a serious difficulty and we expect your intervention and involvement in finding a suitable and worthy solution to the matter." Chen is due to return to Israel on Tuesday. Talansky's pre-trial testimony began on May 27 when he was questioned in direct examination for almost eight hours by Lador. When Lador finished his examination, Olmert's lawyers asked to postpone their cross-examination for two months. They explained to the court that they had received a flood of investigative material from the state prosecution and had not had time to read it. Originally Lador had asked the court to agree to hear pre-trial testimony from Talansky on the grounds that if the witness were to leave Israel without testifying in court, he might not return if and when Olmert was put on trial. Lador said Talansky's testimony was vital to the state's case and that it must be introduced as evidence in court while he was still in Israel, because the state would not be able to force him to return once he left. At the end of the Talansky's first day of testimony, Olmert's lawyers agreed to let him leave Israel without being cross-examined because they needed the time to prepare their case. The court granted their request and allotted them five days for cross-examination beginning on Thursday, July 17. In the meantime, more investigative material was streaming in to Olmert's lawyers. As the fifth day of cross-examination drew to a close on July 22, the lawyers told the court they needed time to read the new material and asked to continue their cross-examination at a later date. The court agreed and granted them two more days, on August 31 and September 1. Now, it looks like that cross-examination may not take place. It is not clear what effect Talansky's decision will have on the proceedings against Olmert and Zaken. The police have managed to interrogate Talansky eight times, and it is safe to assume they obtained all the information they could from him. Furthermore, even though the 75-year-old Talansky proved to have a very faulty memory and clearly fabricated, deliberately or not, some of the things he said to police and to Lador in court, he still told the court some highly damaging facts. These included the transfer of $300,000 to an account controlled by Olmert's lawyer Uri Messer and apparently used as security for a bank overdraft in the 1998 municipal elections, and Talansky's presentation on one occasion of $72,500 in cash to Zaken for Olmert. In addition, the state's case is also based on Messer's testimony to police and Zaken's computer diaries, listing the cash payments that Talansky gave to her or to Olmert. The key question at this point is, what will Olmert's lawyers do now? It is possible that they will demand that the court strike all of Talansky's testimony, including his answers to Lador's questions on May 27. They could claim that Olmert did not get a fair chance to rebut Talansky's version of events in his direct examination. It could be said that Olmert's lawyers were aware they were taking a risk by not questioning Talansky while he was in Israel, knowing, as the prosecution knew, that once he left, he was not obliged to return. But the lawyers could justifiably argue that they needed the time to prepare the cross-examination and that the investigative material kept coming over a prolonged period of time. Lador did not seem to be overly perturbed by the fact that Talansky may not return to resume the cross-examination. In response to the letter by Talansky's New York lawyers, the state attorney did emphasize that Olmert's lawyers had told the court they were willing to take the risk that Talansky would not return. The question is whether, under the circumstances, they had any reasonable option other than to postpone the hearing.