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Police investigate whether Israeli PM received money illegally

  • Story Highlights
  • Probe of Ehud Olmert covers his time as Jerusalem mayor, trade minister
  • Olmert denied Thursday that he illegally accepted any money
  • He said that he has never taken a bribe, but that he would resign if indicted
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JERUSALEM (CNN) -- Police are investigating whether Israeli Prime Minister Ehud Olmert received money illegally while he was mayor of Jerusalem and the nation's minister of industry, trade and labor.

Authorities on Thursday lifted a strict gag order on the investigation of Israeli Prime Minister Ehud Olmert.

Olmert denied the accusation Thursday in front of reporters. He said that he has never taken a bribe but that he would resign if indicted.

Authorities lifted a strict gag order on the investigation Thursday.

"It is suspected that the prime minister received significant sums of money from a foreigner or number of foreign individuals over an extended period of time, partly directly and partly indirectly," Israeli police and the Ministry of Justice said in a statement.

Police spokesman Micky Rosenfeld said that the "foreigner" in question is named Morris Talansky and that the "extended period of time" is from 1998 through 2006, while Olmert held the mayoral and minister positions and was involved in Likud party primaries.

The Jerusalem court said this week that it may question a foreign national in connection with the investigation.

"One of the central witnesses in this case is a foreign resident and a citizen who came to Israel for a visit over the Passover holidays, and his testimony was taken during this time," authorities said Thursday. "The witness involved was brought in for questioning after his alleged involvement in transferring the money."

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In his remarks to reporters, Olmert said Talansky had helped him raise money.

Olmert was questioned Friday and was cooperative, police said, but denied receiving money illegally.

"Due to the prime minister's busy schedule, Olmert was asked at this initial stage to give one hour of his time ... but it was made clear that the investigation would continue on another date," police said.

Because Talansky is a foreigner, Israel has asked the Jerusalem court to hear his testimony as soon as possible, the police statement said, as he wishes to return to his home country.

The gag order initially was requested because authorities were concerned that the investigation might be harmed, police said.

Shula Zaken, Olmert's right-hand woman for 30 years, was suspended last year as head of the prime minister's office amid allegations that she appointed cronies to Israel's Tax Authority. The prosecution is expected to decide soon whether to file charges against her, according to the Israeli daily newspaper Haaretz. Zaken has refused to cooperate in the investigation into Olmert and has been placed under house arrest, the newspaper reported.

According to Haaretz, it is the fifth investigation into Olmert since he became prime minister two years ago and "the latest in a longer string of probes to dog him during his three decades in politics." The newspaper points out that Olmert has never been convicted of wrongdoing.

He is still under investigation for the purchase of a house in an upscale Jerusalem neighborhood that he is said to have bought while he was Jerusalem's mayor for below-market value in return for favors.

Israeli officials also are investigating an alleged $10 million business deal that he participated in while he was labor minister that involved his former business partner.

A yearlong investigation into Olmert's role in the privatization of Israel's second-largest bank wrapped up in November with no charges filed against the prime minister.

Olmert supporters maintain that the investigations are a political move by opponents who want him out of office.

Olmert has been dogged by dismal approval ratings since Israel's 2006 war with Hezbollah militants in Lebanon, which some analysts say failed to weaken the group either militarily or politically. He is also under intense pressure from the United States, a key Israeli ally, to forge a peace agreement with Palestinians by the end of the year.

A weekend visit by U.S. Secretary of State Condoleezza Rice was largely overshadowed by media reports of the current investigation.

President Bush is to be in Israel on Tuesday to mark the Jewish state's 60th anniversary.

All About Ehud OlmertHaaretz Daily Newspaper Ltd.

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