Last update - 00:00 20/03/2007
Police suspect Finance Minister used embezzled funds for political activity
By Roni Singer-Heruti and Yuval Yoaz, Haaretz Correspondents, and Haaretz Service
Finance Minister Abraham Hirchson is suspected of using funds embezzled from Nili, a non-profit organization associated with the National Workers Histadrut Union, in order to finance political activity.
Hirchson, who was questioned under caution by the police financial crimes unit for seven hours Tuesday, is suspected of fraudulent gain under aggravating circumstances, theft by a director, fraud, breach of trust, and forging documents.
Police intend to summon the finance minister for additional questioning. Hirchson's son Ofer and former Nili director general Yitzhak Rosso have also been questioned under caution.
The Justice Ministry denied on Monday claims by police sources that Attorney General Menachem Mazuz had given police permission to question the finance minister under caution.
Police believe that Ovadia Cohen, who served as Nili chairman from 2000-2003 and is currently Ramat Gan deputy mayor, knew of Hirchson's embezzlement and may even have been involved, but failed to tell police about it during questioning.
Cohen himself has confessed to embezzling roughly NIS 5.5 million, saying he gave the money to his brother in order to help him pay off debts. Cohen's brother has also been arrested in connection with the and.
The former Nili chairman informed Hirchson of the embezzlement three years ago, which police originally suspected Hirchson of failing to report. At the time, Hirchson was chairman of the National Workers Histadrut Union.
Police are also investigating whether the offices of the March of the Living foundation, which Hirchson founded in the 1980s, were used by Hirchson to conduct his campaign during the Likud Party primaries in the late 1990s.
Between 1995 and 1999, when Hirchson was chairman of the National Workers Histadrut Union, large sums of money were transferred from the union to the March of the Living foundation. At first, the transfers were defined as a loan, but later redefined as grants.
The March of the Living takes place every Holocaust Memorial day from the Auschwitz concentration camp to the Birkenau extermination camp in Poland. Thousands of Jewish and non-Jewish youth from around the world participate in the march, along with senior politicians.
The Israeli March of the Living foundation was removed from the government list of foundations several years ago due to suspicions that the foundation failed to issue reports as legally required. In recent years the march has been run by the American March of the Living foundation, which is managed by a close associate of Hirchson.
The American foundation has received in recent years grants totaling millions of dollars from the Conference on Jewish Material Claims Against Germany, which conducts negotiations with Germany on Holocaust damages. In addition, the foundation has received private donations.
The American foundation has never detailed the sources of is funding nor its financial expenditures, beyond general reports when filing income taxes.