Daily Israel Report

Report of Impending Criminal Investigation Catches PM in China

The State Prosecutor is expected to recommend that police open a criminal investigation against Prime Minister Ehud Olmert. Olmert: "I am confident of my innocence."
By Nissan Ratzlav-Katz
First Publish: 1/10/2007, 2:48 PM / Last Update: 1/10/2007, 9:41 AM

According to a report broadcast Tuesday night by Channel 10 television news, State Prosecutor Eran Shendar will instruct the police to investigate Prime Minister Olmert's alleged illegal involvement in the public tender for the purchase of Bank Leumi. In addition, the investigation may focus on three other cases of alleged corruption involving the prime minister.

The Channel 10 report said the Attorney General's Office will make the announcement of the investigation upon Olmert's return from his ongoing three-day state visit to China.

Prime Minister Olmert has thus far refused to provide any immediate reaction to the report - finding himself in a very awkward position in the midst of an official visit to an important world power. Sources close to him said that it is nothing more than speculation and analysis, not reliable foreknowledge, and that no information regarding an impending criminal investigation was given to the prime minister or his staff.

Prime Minister Olmert and Attorney General Menachem Mazuz held a working meeting ahead of the prime minister's trip to China, which began Tuesday. Aides accompanying Olmert said Mazuz made no mention of the potential criminal investigations.

The Ministry of Justice responded to the Channel 10 report with a statement saying, "We wish to make it clear that we are not considering reacting to any publication, report or speculation in this matter. When the decision-making process in these sensitive and complicated matters - a process that is still ongoing - is concluded, an announcement will be made to the public."

The decision whether or not to recommend a police investigation is being made by Prosecutor Shendar, because Attorney General Mazuz disqualified himself from the Bank Leumi case. Mazuz's sister is responsible for legal oversight of the tender process in the Finance Ministry.

Investigative reporter Yoav Yitzchak also reported Tuesday that State Comptroller Micha Lindenstrauss is planning to caution Prime Minister Olmert regarding the administrative aspects of the suspicions against him.

Mounting evidence collected in the Bank Leumi case indicates that Olmert had a clear conflict of interest as Acting Finance Minister while involved in the public tender for the bank's purchase in 2005. The allegations are that Olmert intervened in the tender on behalf of two business associates and friends, an American and an Australian, in exchange for unspecified personal benefits.

Also under examination in the Attorney General's Office are Olmert's appointments in the Small Businesses Authority when he served as Minister of Industry and Trade under then-Prime Minister Ariel Sharon. In addition, Mazuz's office is looking into benefits Olmert allegedly arranged for the clients of his personal lawyer, Uri Messer, as well as alleged promises Olmert made when he was mayor of Jerusalem to act to increase the building rights of a contractor who sold Olmert a large apartment below market value.