Olmert chief suspect in Holyland scandal

Former Israeli Prime Minister Ehud Olmert was identified as the chief suspect in a massive real estate scandal.

Police on Thursday identified Olmert as the senior figure in the Holyland project scandal.

Olmert voluntarily cut short a planned visit abroad Wednesday to return to Israel in order to be questioned in the corruption investigation. He is suspected of accepting nearly $1 million in bribes during the construction of the Holyland apartment project in Jerusalem, built on the site of the former Holyland Hotel. Olmert is currently on trial in other corruption scandals.

Also on Wednesday, former Jerusalem Mayor Uri Lupolianski was arrested in connection with the Holyland scandal. Five other officials, including Uri Messer,a former aide to Ehud Olmert when he was mayor of Jerusalem, were arrested last week in connection with the corruption scandal.

Lupolianski is suspected of accepting about $750,000 in bribes during the construction of the Holyland apartment project in Jerusalem, built on the site of the former Holyland Hotel.

Police believe that Olmert received his money through Messer and through his former bureau chief Shula Zaken, who is also on trial in another corruption scandal involving Olmert.

The Holyland project started while Olmert served as mayor of Jerusalem from 1993-2003, and ended with his successor, Lupolianski, who served until 2008.

The scandal, which became public last week, is being described as one of the worst corruption scandals in Israeli history.

Olmert indicted in corruption case

Former Israeli Prime Minister Ehud Olmert was indicted in three corruption cases.

Israel’s State Prosecutor’s Office filed the charges on Sunday in three cases alleging that Olmert double-billed for overseas trips, made improper appointments when he was minister of trade and labor and accepted cash from American Jewish businessman Morris Talansky. The charges include fraud, breach of trust, tax evasion and falsifying corporate records. The indictment does not include charges of bribery, for which police investigators reportedly had been pressing.

It is the first time that the former Israeli prime minister has been criminally indicted.

Olmert’s former bureau chief, Shula Zaken, also was indicted for her alleged involvement in two of the cases.

Three other corruption investigations against Olmert were closed this summer.

As Olmert Exits, Creeping Doubts About His Ouster

After finally leaving office this week, Ehud Olmert will have his hands full fighting the corruption charges against him.

There is little sympathy in Israel for the outgoing prime minister, who is widely viewed as a corrupt politician who failed to achieve the lofty goals he set for himself when he took office.

But there are some nagging doubts about the system that brought down Olmert: An elected prime minister has been forced out of office even though he has yet to be found guilty of any crime.

Three major investigations against Olmert—for allegedly tampering with terms for the sale of Bank Leumi to help a friend, and receiving substantial discounts in the rental and purchase of two Jerusalem apartments in return for favors—have been closed for lack of evidence.

It’s possible that Olmert was forced out of office by muckraking political opponents without his having committed any crime, Olmert confidants say.

In a mid-February interview in Israel’s daily Yediot Achronot, Olmert’s wife, Aliza, implied as much, saying politically motivated people had been out to get her husband. She declined to go into detail.

Amnon Dankner, a former chief editor of the daily Ma’ariv and a close friend of Olmert, was more forthcoming.

“From the moment he placed himself as the predominant leader of the peacemaking left,” Dankner wrote of Olmert in Ma’ariv last August, “right-wing elements started digging through his affairs going back down the years to produce suspicious material for the authorities.”

On the face of it, Dankner’s allegations seem to have merit.

Yoav Yitzhak, the investigative journalist who produced the allegations on the two Jerusalem apartments, was instrumental in bringing down another peace-leaning politician, the late President Ezer Weizman. The official who came up with the Bank Leumi allegations was then-accountant general Yaron Zelekha, who is close to Likud’s Benjamin Netanyahu, a prime Olmert rival. And Moshe Talansky, the American Jewish businessman who allegedly gave Olmert envelopes stuffed with cash, and who then testified against the prime minister, has spoken of his disappointment in the once hawkish Olmert’s transformation to a political dove.

The trouble with the picture of Olmert as victim, however, is that some of the allegations against him seem to carry merit: Police have recommended that Olmert be indicted in three separate cases. If Olmert’s political enemies found serious instances of fraud and breach of trust, what difference does it make if their initial muckraking motivation was political, Olmert’s critics ask.

In two of the cases, Israel’s attorney general has decided to indict Olmert pending a hearing: the Talansky affair, in which Olmert is alleged to have received hundreds of thousands of dollars in cash over a 13-year period, and the Rishon Tours affair, in which Olmert allegedly double-billed for trips and lectures he made abroad, using the excess money to finance travel by family members.

The fact that the attorney general has decided to indict is no small matter. It means that after going through all the material, he is convinced the state has enough evidence to convict.

Indictment by the attorney general is generally considered the signal in Israel for ministers under investigation to resign. In Olmert’s case, the pressure on him to step down was so great that he tendered his formal resignation last September, even before the attorney general announced his intention to indict.

Two other Olmert investigations are ongoing: awarding contracts to his former law partner Uri Messer and appointing cronies when Olmert was minister of trade and industry from 2003 to 2006.

The sheer weight of police probes and corruption scandals with Olmert’s name on them may be about to catch up with a man who long has operated under a cloud of investigations.

In 1981, Olmert received a $50,000 loan via Yehoshua Halperin, CEO of the Bank of North America, which he was never pressed to pay back. Although the circumstances suggested a possible attempt to bribe a sitting Knesset member, Olmert was not prosecuted.

In 1997, Olmert was acquitted in court of responsibility for an election scam in which Likud officials provided fictitious receipts to donors in 1988, when Olmert was the party’s co-treasurer. Olmert successfully pleaded ignorance, but three other Likud officials were convicted.

In 1999, as mayor of Jerusalem, Olmert was investigated for arranging a reception for the mayor of Athens as an alleged favor to an Israeli developer seeking to build an ambitious tourist facility on a Greek island. The developer had just promised to support Olmert in an upcoming race for Likud leader. The case was dropped.

The problem facing the Israeli legal system is finding a balance between fighting corruption in high places and not allowing political opponents of incumbent politicians to abuse the system to subvert the democratic process.

Hebrew University’s Shlomo Avineri, one of Israel’s top political scientists, says the main problem is the slow pace of investigation. In the case of public figures, drawn-out investigations are not only unfair to the politicians, but they hamper government functioning and can pervert democracy, Avineri says. Investigations should be expedited, he says.

Some have suggested adopting the French system, under which the country’s leader cannot be investigated while in office. Another possibility would be something akin to the U.S. system of impeachment: no indictment unless and until a politician is impeached by a two-thirds majority in the Knesset.

As for Olmert, he’s still hoping his name will cleared—and once it is, he will find a way back to the top sooner than most people think.

Ehud Olmert era comes to ignominious end

(JTA) – A day after Ehud Olmert formally submitted his resignation as prime minister, Israeli President Shimon Peres officially tapped his Kadima Party successor, Tzipi Livni, to form a new government.

Livni now has 42 days to put together a coalition government. Though Olmert still heads the interim government until Livni is sworn in, Sunday’s resignation effectively spelled the end of the Olmert era.

Before meeting with Peres on Sunday evening, Olmert informed his Cabinet of his intention to resign.

“I must say that this was not an easy or simple decision,” Olmert said. “I think that I have acted properly and responsibly, as I promised the Israeli public from the beginning.”

Olmert congratulated Livni and said he would help her form a coalition government, and the two shook hands.

It was an ignominious end to a premiership marked by multiple corruption scandals, a failed war in Lebanon and unfinished business on the Palestinian, Syrian and Iranian fronts.

At first an accidental prime minister following Ariel Sharon’s crippling stroke in early 2006, Olmert won his first election as Kadima leader a couple of months later under the banner of maintaining the path of unilateral disengagement Sharon had begun. Olmert would do in the West Bank what Sharon had done in Gaza: unilaterally extricate Israel from its adversaries, even if those adversaries were unready or unwilling to make peace.

But the shortcomings of Israel’s unilateral approach became evident early on in his premiership. The 2006 summer war with Hezbollah exposed the deficiencies of Israel’s unilateral withdrawal from Southern Lebanon in 2000 under Ehud Barak, and the increasing rockets attacks from Gaza and Hamas’ takeover of the strip in June 2007 exposed the limitations of Sharon’s pullout.

The violence shattered Olmert’s plans for unilateral withdrawals in the West Bank.

Olmert adjusted his approach, but his responses to Israel’s challenges were seen as inadequate. The prime minister’s approval ratings plummeted as each crisis seemed to be shadowed by one corruption scandal or another.

After Hezbollah launched a cross-border raid in July 2006, the Olmert government launched a war to recover the two soldiers taken captive in the raid and neutralize the threat to Israel from Hezbollah. But the war failed to recover the soldiers or deliver a mortal blow to the Shi’ite terrorist group in Lebanon.

Rather, Hezbollah rallied as a political force in Lebanon after the war and became a veto-wielding presence in the Lebanon Cabinet. Hezbollah also rebuilt its forces and missile arsenal to three times its prewar size, according to Israeli estimates.

In Gaza, Olmert watched as Hamas routed the more moderate Fatah faction from power and took over the strip in June 2006. Hamas kept up daily barrages of Kassam rockets into southern Israel, and the Israeli army was unable to impose quiet.

Unwilling to risk the same approach in Gaza that had failed in 2006 in Lebanon, Olmert held off on ordering a major invasion of the strip.

The need to isolate Hezbollah, Hamas and especially their backer, Iran, drove Olmert to push harder for peace. It led to the re-launching last year of peace talks with the Palestinians at Annapolis, Md., and to this year’s renewed talks with Syria under Turkish auspices, but Olmert ended his abbreviated term with those major policy initiatives unfinished.

Now it will be up to Livni, who led the Olmert administration’s talks with the Palestinians, to see the process through—assuming she succeeds in assembling a governing coalition.

Israel’s next prime minister also will inherit an unsolved Iranian problem. Iran’s suspected march toward nuclear weapons has been Israel’s central foreign preoccupation during Olmert’s term, but Olmert did not manage to rally sufficient international pressure on the Islamic Republic to bring its uranium enrichment activities to a halt.

Throughout his 2 1/2-year term, Olmert was dogged by corruption allegations that cast a shadow over nearly everything he did.

Even his decision to re-launch the indirect peace talks with Syria and sign a cease-fire deal with Hamas in Gaza in June—finally bringing quiet to southern Israel, with the exception of the occasional violation—were viewed with suspicion by some who derided the moves as ploys to ensure his political survival.

The major corruption scandal that erupted in May, in which American Jewish businessman Morris Talansky said he gave Olmert $150,000 in cash over the course of the decade and a half before Olmert became prime minister, crippled Olmert’s ability to govern.

Calls for his resignation accelerated several weeks later with the revelation by police that Olmert was suspected of double-billing overseas trips to various Jewish charities.

Though he always denied any wrongdoing, Olmert acknowledged at the end of July that it had become impossible for him to continue as prime minister, and he announced that he would resign as soon as his party, Kadima, chose a new leader in September.

After Olmert handed his resignation letter to Peres on Sunday, the president offered a few solemn words.

“This is not an easy decision, and I am convinced that this is a difficult evening for him,” Peres said. “I wish to take this opportunity to thank the prime minister for his service to the people and the state over the course of many years of public activities—as the mayor of Jerusalem, as a minister in the government and as the prime minister of Israel.”

Ron Kampeas in Washington and Marcy Oster in Israel contributed to this report.

A Rosh Hashanah message from Ehud Olmert

Ehud Olmert: A political time line

NEW YORK (JTA)—The following is a time line of Prime Minister Ehud Olmert’s political career:

Sept. 30, 1945 Born to Bella and Mordechai Olmert in Binyamina, near Haifa.

November 1963-1971 Begins military service in the Golani Brigade, but hand and feet injuries that predate his service force him out of the combat unit. He completes his service as a reporter for the IDF magazine, Bamahane.

1965 As student representative of the Herut Party, the predecessor to Likud, Olmert makes a name for himself by demanding the resignation of party chief Menachem Begin.

December 1973 Elected to the Knesset as a Likud Party member.

December 1976 After Olmert discloses to the Knesset that Housing Minister Avraham Ofer is likely to be the subject of a police investigation, Ofer kills himself.

December 1988 Appointed minister without portfolio in charge of minority affairs by Prime Minister Yitzhak Shamir.

April 1989 Comes under criticism for receiving a $50,000 loan from a fictitious company owned by the head of the Bank of North America, Yehoshua Halperin. Olmert is tried and acquitted.

June 1990 Appointed health minister under Yitzhak Shamir.

November 1993 Elected mayor of Jerusalem, defeating longtime incumbent Teddy Kollek.

September 1996 Indicted with other Likud party members for illicit fund raising from corporate donors and for knowingly signing a false statement. Olmert is acquitted of the charges.

February 2003 Appointed deputy prime minister and minister of industry, trade and labor by Prime Minister Ariel Sharon.

December 2003 Throws his support behind Sharon’s plan to disengage from Gaza, retreating from his former assertions that high Arab birth rates are not a threat to Jewish democracy.

November 2005 Leaves Likud and follows Sharon to his newly formed centrist party, Kadima.

January 2006 – Becomes acting prime minister after Sharon suffers a debilitating stroke.

March 2006 Wins general elections and becomes prime minister.

July 2006 Wages a 34-day war against Hezbollah, the Lebanon-based terrorist group.

September 2006 Questioned by the State Comptroller’s office over suspicions of bribery after purchasing a property in Jerusalem for far less than market value.

January 2007 Questioned by investigators about whether, as finance minister, he used his influence to favor a friend in the sale of a large portion of the newly privatized Bank Leumi.

April 2007 Found ultimately responsible for the failures of the Lebanon war in the interim report by the Winograd Commission appointed to investigate the war’s failures; commission stops short of calling for his resignation. In the same month, the commissioner for standards in public life speaks out against Olmert’s activities during his term as industry minister, accusing him of a conflict of interest when a friend, Uri Messner, applied for government financial benefits.

October 2007 Diagnosed with non-terminal prostate cancer.

January 2008 Leadership during Lebanon War determined by the Winograd Commission’s final report to be conducted in good faith, despite serious failings and faulty decisions.

May 2008 Investigated by police for illegal fund raising, possible bribery and double billing overseas trips in the years before becoming prime minister. Olmert denies any wrongdoing but promises to resign if indicted.

July 2008 Accedes to calls for his ouster and announces he will resign the office of prime minister after Kadima primaries in September, allowing the party’s new leader to form a new government.