Testimony by Prime Minister Ehud Olmert before the National Fraud Investigation Unit in the next few days is expected to clinch a decision by State Prosecutor Eran Shendar as to whether to issue an indictment in the Bank Leumi privatization affair.

Investigators will grill the prime minister about his involvement in the sale of the government shares in the bank during his reign as acting Finance Minister. The tender was issued by Olmert in November 2005, during the term of former Prime Minister Ariel Sharon.

Olmert is suspected of using his position to help two business associates compete in the bidding for the bank shares. One of the two, Australian business tycoon Frank Lowy, was set to become a controlling shareholder in Bank Leumi after it was privatized.

Both men eventually withdrew their bids, however.  A subsequent visit by Israel Police investigators to question Lowy in Australia cleared the businessmen of any suspicion of wrongdoing. 

State Prosecutor Eran Shendar is right now deciding whether or not to proceed with the investigation of the Prime Minister, or even to indict him. Olmert's future months therefore depend heavily on the lengthy testimony he is expected to give in the next few days.

Attorney General Menachem Mazuz has recused himself from the case due to a conflict of interest: his sister, Yemima Mazuz, was the Finance Ministry’s legal advisor while the bank share deals were being coigned. .

Shendar announced in April that he would retire this month after three years on the job, although he had signed on for a 6-year term. He agreed to stay on until a replacement is appointed, with Mazuz’s approval.

The 55-year-old State Prosecutor was appointed to the post in 2004 after having already retired from the Office of the State Prosecution. Until that time, he was the head of the Justice Ministry’s Department for Investigation of Police Officers.