Ehud Olmert - Corruption and Bribery Criminal Investigations

Corruption and Bribery Criminal Investigations

On 7 March 2006, it was disclosed that an inquiry was being carried out on the 1999 sale and lease-back of a Jerusalem property purchased by Olmert in 2004, which allegedly was done on financial terms very favorable to Olmert, in what would amount to an illegal campaign contribution and/or bribe. Olmert was alleged to have paid $325,000 below market value. A criminal investigation regarding the matter was formally launched on 24 September 2007. The investigation closed in August 2009 due to lack of evidence.

On 16 January 2007, a criminal investigation was initiated against Olmert. The investigation focused on suspicions that during his tenure as finance minister, Olmert tried to steer the tender for the sale of Bank Leumi in order to help Slovak-born Australian real estate baron Frank Lowy, a close personal associate. Israeli Finance Ministry Accountant General Dr. Yaron Zelicha was as a key witness, according to the State Comptroller's office. The state comptroller testified against Olmert. Israeli Police who investigated the case eventually concluded that the evidence that was collected was insufficient for indictment, and no recommendations were made to press charges. In October 2007, he was questioned for five hours by three officers from the National Fraud Investigations Unit in his Jerusalem residence. State Prosecutor Moshe Lador closed the case in December 2008 due to lack of evidence.

In April 2007 it was further alleged that, during his office as minister of trade, industry and labor, Olmert may have been guilty of criminal behavior by taking an active part in an investment center. Prosecutors said that Olmert placed himself in a conflict of interest by personally dealing with issues involving business figures represented by his friend and former business partner, lawyer Uri Messer. Olmert was alleged to have changed some decisions made by his ministry in their favor. During a parliamentary inquest in July 2007, Olmert flatly denied these accusations.

In October 2007, Attorney General Mazuz ordered a police investigation into allegations that Olmert, when he held the positions of trade minister, communications minister and finance minister, had improperly appointed associates from the Likud party to posts on government bodies. Police completed their investigation in 2009, and concluded that there was a basis to indict Olmert and others for fraud and breach of trust.

In May 2008, it became public that Olmert was the subject of another police investigation, concerning allegations of bribery. Olmert said that he took campaign contributions from Jewish-American businessman Morris Talansky when he was running for mayor of Jerusalem, leadership of the Likud and candidacy in the Likud list for the Knesset. It was alleged that Olmert unlawfully received millions of shekels in illegal campaign funding from Talansky over a 15-year period. Olmert resisted calls to resign, and stated: "I never took bribes, I never took a penny for myself. I was elected by you, citizens of Israel, to be the Prime Minister and I don't intend to shirk this responsibility. If Attorney General Meni Mazuz, decides to file an indictment, I will resign from my position, even though the law does not oblige me to do so." On 2 May, head of the National Fraud Investigations Unit Brigadier-General Shlomi Ayalon and two investigatiors questioned Olmert for 90 minutes in his Jerusalem residence. On 23 May, National Fraud Investigations Unit officers interrogated Olmert for an hour in his Jerusalem residence. On 27 May, Talansky testified in court that over the last 15 years he gave Olmert more than $150,000 in cash in envelopes to fund political campaigns, and hinted that Olmert also used the money for fine hotels, cigars, pens and watches. On 6 September 2008, the Israel Police recommended that criminal charges should be brought against Olmert. In their indictment, prosecutors claimed that Olmert had received some $600,000 from Talansky in either cash or bank transfers, and that $350,000 of this was held in a "secret cache" managed by Olmert's close associate Uri Messer. The prosecution also claimed that Olmert used his official capacity as minister of trade and industry to facilitate introductions with hotel managers for Talansky, a partner in a firm providing mini-bars for hotels. It was alleged that Olmert sometimes used official letterheads. The charge sheet said that Olmert was aware he was in an "acute conflict of interest".

In July 2008, Haaretz wrote that in 1992, Olmert took a loan from U.S. businessman Joe Almaliah, but never repaid it, and concealed the true size of the loan from the State Comptroller. In March 2003, State Comptroller Eliezer Goldberg asked Olmert to submit the wealth-declaration statement required of all cabinet ministers. Olmert disclosed that he had taken a loan from Almaliah, but did not say when it was due. In 2004, Olmert conceded that he had taken $75,000, and stressed that Almaliah had not asked for repayment of the loan. At Goldberg's insistence, Olmert signed a contract with Almaliah undertaking to repay the loan in January 2009. According to an indictment, Olmert had actually taken another $100,000 from Almaliah, which was deposited into his personal bank account. The State Prosecutor's office said that it was not aware of Olmert's repayment of either loan.

On 26 November 2008, Attorney General Menachem Mazuz informed Olmert that he decided to file an indictment against him in what has come to be known as "Rishon Tours" affair, pending a hearing before Mazuz. The scheme allegedly worked as follows: Olmert would speak abroad on behalf of groups such as the Yad Vashem Holocaust memorial, a support group for the Israel Defense Forces or a charity for mentally disabled Israeli children. Rishon Tours then billed each group for the same trip as if they alone were paying, and placed the money in a special bank account allegedly for Olmert's personal use. Prosecutors charged that Olmert had gained $92,164.

On 1 March 2009, Attorney General Mazuz informed Olmert's legal representatives that he had decided to file an indictment against him, in what has come to be known as the "cash envelopes" affair, pending a hearing before the attorney general.

In 2010, it was cleared for publication the National Fraud Investigations Unit suspected Olmert of involvement in the "Holyland Affair", where officials took bribes in exchange for promoting real estate projects, especially the Holyland real estate development project in southwest Jerusalem, which was allowed to grow 1,200% beyond the limit authorized. As Mayor of Jerusalem, Olmert allegedly took thousands of shekels in bribe money from businessmen, entrepreneurs, and stakeholders.