Attorney General Menachem Mazuz has instructed the police to launch a criminal investigation against Prime Minister Ehud Olmert regarding his purchase of a private home on Cremieux Street in Jerusalem when he was Mayor of Jerusalem in October 2004. Olmert is suspected of receiving a hefty discount on the apartment's purchase price from the contractor, Alumot, in return for his acting to speed up the approval of construction permits for the project.
The affair was initially exposed by investigative website NFC, which filed formal complaints against Olmert with the State Comptroller and the AG in February of 2006. The discount Olmert received in the apartment's purchase is suspected to have totaled about $500,000 (according the the Comptroller, he paid $1.2 million but the home's true value was about $1.7 million).
In April of 2007, the Comptroller presented the results of his inquiry to the AG, leaving it to the AG to decide whether to call for a comprehensive police investigation.
After going over the material, the AG asked that the value of the apartment be assessed and compared with Olmert's and Alumot's contentions regarding its worth.
After several consultations with members of the state prosecution staff, Mazuz decided to give the go-ahead for a police investigation.
according the the Comptroller, he paid $1.2 million but the home's true value was about $1.7 million
The results of the initial phase of the police investigation will be presented to the AG and Chief Prosecutor for evaluation.
Olmert's bureau responded to the news Monday by saying that the investigation was "unnecessary." The Prime Minister's bureau said it was "certain and convinced of the cleanness and purity of the process by which the Olmert family's apartment on Cremieux St. was purchased."
"We regret the decision to continue the investigation," the bureau said. "However, the Prime Minister will fully cooperate with the investigation in order to bring it to as speedy and end as possible."
Olmert is already under criminal investigation in another affair, which involves suspicions that in 2005, as Acting Finance Minister, he acted illegally to help two of his friends, Jewish billionaires Daniel Abrams from the USA and Frank Lowy from Australia, get control of Bank Leumi's shares. Olmert is suspected of acting in a way that constituted receipt of a bribe.
AG Mazuz is expected to announce his decisions regarding two other matters in which Olmert is suspected of corruption. These are known as the "Small Business Bureau affair" and the "Investment Center affair." Both involve illegally exertion of influence to assist friends and political allies.