Criminal Probe Launched Against Olmert, Other Probes Possible

Police Launch Criminal Probe Against Olmert on Bank Leumi Sale, by by Gil Zohar (Israel National News)

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State prosecutor Eran Shendar ordered Israel Police to launch a criminal probe Tuesday against Prime Minister Ehud Olmert concerning the sale of the government’s shares in Bank Leumi.

Olmert, it is alleged, used his former position as finance minister in order to help two friends who were interested in buying the shares. Olmert has denied interfering in the tender for the state’s controlling interest in the bank.

The Prime Minister was notified of the prosecution’s order on Tuesday afternoon.

The investigation will focus on suspicions that Olmert tried to steer the tender for the sale of Bank Leumi in order to help Australian real estate tycoon Frank Lowey, a close personal associate, and Daniel Abrams.

Police opened an unofficial “inspection” into the suspicions two months ago. Shendar decided to open a criminal probe after Attorney-General Menachem Mazuz removed himself from the case due to his sister Yemima Mazuz’s employment as the Finance Ministry’s legal adviser in the privatization of Bank Leumi.

Police Commissioner Moshe Karadi is expected to decide Tuesday who will conduct the investigation along with the prosecution’s finance department.

Suspicions that Olmert, in his former role as finance minister, was improperly involved in the Leumi sale first came to light in a report by State Comptroller Micha Lindenstrauss. The main evidence against him is apparently the testimony of former Accountant-General Yaron Zelikha.

An opinion prepared by attorney Michael Karshan of the Justice Ministry recommended a criminal investigation against Olmert in the Leumi affair, on suspicion of fraud, breach of trust and other crimes. However, Shendar then decided that more information was needed, and asked the police to carry out certain inquiries as part of the process of deciding whether to open a formal investigation.

The PM may be probed over two additional affairs as well: the alleged illegal appointments at the Israel Small and Medium Enterprises Authority during his tenure as minister of Industry, Commerce and Labor; and his association with his confidante Attorney Uri Messer who was a partner in Olmert’s law firm until 1988.

Messer was one of the key figures in the affair involving Olmert’s purchase of a luxury apartment on Cremieux Street in Jerusalem. Messer allegedly conducted the business negotiations on Olmert’s behalf.

Reports said Olmert received a US$320,000 discount on the apartment in the capital’s ritzy German Colony in exchange for expediting construction permits.

Speaking for the first time last week on Attorney-General Mazuz’s recommendation that he be investigated, Olmert told reporters in China, “I do not feel persecuted; similar reports have been published in the past.”

The police investigation ordered by state prosecutor Shendar could result in a coalition crisis and early elections. Olmert was elected in March 2006 as Israel’s 12th Prime Minister.

Criminal Probe Launched Against PM, by Amir Mizroch (Jerusalem Post)

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Senior Kadima officials said Tuesday evening that if the criminal investigation against Prime Minister Ehud Olmert runs into complications, the party won’t wait for the probe’s results and will work to replace Olmert in order to avoid elections, Army Radio reported.

A Kadima minister called the party’s situation “serious,” adding that “the announcement could ruin his standing in the polls.”

The minister said, however, that it was important to remember that three other prime ministers had undergone criminal probes before Olmert.

One Kadima MK went so far as to say that the party had “finished its career.”

Earlier, State Prosecutor Eran Shendar officially ordered police to investigate the prime minister for his alleged interference in the tender for the state’s controlling interest in Bank Leumi.

Sources involved in the investigation concluded that there was sufficient evidence to open a criminal probe, and Israel Police Insp.-Gen. Moshe Karadi was expected to convene a special meeting Tuesday evening to put together an investigation team.

Police spokesman Micky Rosenfeld said the police anti-fraud unit would handle the probe. He declined to say how long it would take.

Olmert, who has been dogged by corruption allegations during his three-decade political career, has denied any wrongdoing in the case. His lawyer, Eli Zohar, said Olmert looked forward to a chance to clear his name.

“I welcome the decision to open an investigation so that once and for all we can end this irrelevant misunderstanding,” Zohar told Israel Radio. “We hope the investigation will be conducted quickly and efficiently so that the witch hunt and criticism will disappear.”

Sources close to the prime minister said in response to the decision that “it’s hard to say that the announcement surprised Olmert.”

The sources contended last week that false accusations had deliberately been leaked to the press in an attempt to harm Olmert.

Reports in the media have charged that Olmert tried to steer the Bank Leumi tender in favor of his friends, US real estate magnate Mort Zuckerman, Brazilian banking tycoon Joseph Safra and Australian billionaire Frank Lowy.

Yoav Yitzhak, editor of the Internet site News First Class, who first reported Olmert’s alleged interference in the tender, wrote that the prime minister convened a meeting of top Finance Ministry officials and tried to change the protocols of the tender to favor the three wealthy Jewish businessmen.

Olmert allegedly tried to help Lowy, owner of the Westfield Group, in return for assistance in financing Olmert’s Jerusalem mayoral campaign years before.