Police claim new evidence against Sharon in Kern affair

By YAAKOV KATZ, JPOST STAFF
cyril kern 298.88 (photo credit: Gideon Markowicz)
cyril kern 298.88
(photo credit: Gideon Markowicz)
Police announced on Tuesday that they had collected evidence indicating that Ariel Sharon allegedly received $3 million from Austrian businessmen Martin and James Schlaff. The money, police suspect, may have been given as a bribe to Sharon to promote the Schlaff brother's business interests in Israel. Part of the money, police said, was used by Sharon to repay illegal campaign contributions he received in the 1999 Likud primaries. The rest of the money, sources said, was pocketed by the Sharon family. The prime minister's office refused to comment on the matter. On the other hand, Sharon's associates called the leak a deliberate and orchestrated attempt to harm Kadima's election campaign. In court documents, obtained by The Jerusalem Post and first revealed by Channel 10 on Tuesday night, the police spelled out its suspicions against the prime minister and claimed to have evidence that the money was transferred to Sharon by the Schlaff brothers - known Austrian-Jewish businessmen. "During the investigation, evidence was found that points to the involvement of James Schlaff and his brother Martin in the transfer of $3 million to the prime minister's family," read the document, which was presented to the Rishon Letzion Magistrate's Court this week. "Part of the money was used to return illegal campaign contributions the prime minister received and had to return, and part remained in the hands of the Sharon family." On December 22, after learning that James Schlaff was visiting Israel, police raided his parent's home here and confiscated two laptop computers, cellular phones and documents. "The new evidence is material that we did not have before and is certainly a positive turn in the investigation," one senior officer said. Schlaff's attorney Nevot Tel-Tzur petitioned the court against the police raid and asked that his client's possessions be returned immediately. Police sources said Tuesday that investigators had yet to review the new evidence and that they were waiting for the court's approval. The court documents backed up remarks Austrian State Prosecutor Gerhard Jarosch made to the Post in September by which Sharon had likely been bribed by the Schlaff brothers. "There is a strong suspicion that there was bribery," Jarosch, who has run the Austrian side of the investigation since 2003, told the Post at the time. "There is no other plausible reason that so much money should go to the Sharon family. The reasons that have been given by the Sharons [in explaining the money transfers] were meager and insufficient." Lior Chorev, a key Sharon aide, refused to comment. "No official is saying this, a reporter is saying this," he said. "Since when do I need to respond to speculation of a reporter on Channel 10." Officials at the Justice Ministry were not available for comment. Sharon's associates expressed confidence that the Channel 10 report would not harm his re-election campaign. They said that there was nothing new in the report and that Sharon's innocence will be proven over time. "The Cyril Kern investigation will end up the same way the others did and the prime minister will be cleared of all charges," a Sharon associate said. "Sharon doesn't have a part in this and he hasn't even testified in the Kern affair. The report won't do any damage, because no one will be talking about it." Attorney Tel-Tzur denied any involvement of his clients in the affair. "There was no breakthrough today, except maybe a leak to the press, which perhaps aimed at keeping the case alive," he told Channel 1. According to Tel-Tzur, "James Schlaff was not interrogated as a suspect nor was he questioned under warning. Computers, containing personal and business information of the Schlaff family, had been seized. They have yet to be examined and I am certain that investigators will not find anything related to the case in them." Schlaff has been mentioned in the past by police as the possible source for some $4.5 million transferred to Sharon family bank accounts by South African businessman Cyril Kern. The investigation began following Sharon's victory in the 1999 Likud Party leadership primaries when the then-Likud Party chairman went into debt to repay NIS 4.7 million in illegal campaign contributions. In 2002, Sharon's son Gilad received a $1.5 million loan originating in Austria from South African businessman Kern to repay a loan the family had taken out to repay the donations. In November 2002, after Gilad allegedly learned police were tracking the money transfer, he received two additional transfers from the Austrian bank BAWAG totaling close to $3 million. In total he received close to $4.5 million. Gil Hoffman contributed to this report