Last update - 00:00 25/09/2007
Police tap National Fraud Unit to probe PM over real estate deal
By Yuval Yoaz and Jonathan Lis, Haaretz Correspondents
The National Fraud Investigation Unit will open a criminal investigation against Prime Minister Ehud Olmert over suspected corruption in a real estate deal, police announced on Tuesday.
The Chief of Investigations and Intelligence, Major General Yohanan Danino, appointed the unit to handle the probe after Attorney General Menachem Mazuz ordered police on Monday to initiate the investigation.
Senior police officials expressed pessimism Monday following Mazuz's directive. The prime minister and his wife, Aliza, are suspected of purchasing an apartment on Cremieux Street in Jerusalem at a discounted price and granting benefits in turn to the real estate firm which brokered the deal.
Senior police circles doubt their ability to carry out the investigation in the case of Olmert's acquisition of the property. The officials cite the amount of relevant information that has already been published in official documents and the media as the cause of their pessimism and frustration.
"It is very difficult to run an investigation a year and a half after all the information on the case has been published in the media," senior police sources said Monday, expressing their frustration with the order.
"We are not accustomed to running investigations after the material has been spread all over the newspapers, and we do not like it," a police source told Haaretz Monday.
For police investigators, the fact that much of the information of the case has already been made public means that they are not likely to be able to bring 'untainted' evidence against the prime minister that will lead to an indictment.
Police sources said Monday that they hoped the investigation would be completed soon.
The decision to order a police investigation into the Cremieux Street home of Ehud and Aliza Olmert aims at clarifying suspicions of criminal conduct that emerged during an investigation by State Comptroller Micha Lindenstrauss.
It has been reported that the home purchased from Alumot, a real estate development firm, was offered at a considerable discount to the Olmerts in return for assistance in receiving unusual building permits through Ehud Olmert's connections at the Jerusalem Municipality.
A statement issued by the Prime Minister's bureau Monday expressed confidence in the honest acquisition of the property at Cremieux Street.
"We regret the decision to proceed with the investigation," read the statement, which described the investigation as "unnecessary."
Alumot issued a statement saying that "it hoped and believes that at the completion of the investigation, the witch hunt will end."
"We trust and are sure that in the end the truth will emerge, and it will be shown, unequivocably, that the company behaved accordingly," the statement added.
At this stage it is not clear whether the suspicions of criminal conduct are directed at Olmert himself, or primarily at persons in the Jerusalem Municipality.
The decision by Mazuz followed a recommendation by State Prosecutor Eran Shendar, whose office evaluated the evidence in the case.
Following the Sukkot holiday, Olmert is also expected to be questioned under caution for his alleged role in the tender for the privatization of Bank Leumi.
Mazuz is also expected to make a final decision on whether to initiate a third criminal investigation in the role of Olmert in the case of the Small Business Authority, and other cases which date back to Olmert's tenure as Minister of Industry and Trade.
Final discussions on these cases are currently being held in Mazuz's office.
The Cremieux Street affair began following a story that investigative journalist Yoav Yitzhak published in February 2006. A complaint was then filed with the State Comptroller's office as well as with the attorney general.
During the initial probe, reports say Olmert received as much as $500,000 in 'deductions' from Alumot during the purchase of the apartment on 8 Cremieux Street in October 2004.
According to the investigation carried out by the State Comptroller's office, Olmert purchased the apartment for $1.2 million, even though its real value ranged between $1.6 million and $1.8 million.
Suspicions revolved around the benefits that Alumot received in return, in the form of unusual building permits that allowed them to make significant profits. More specifically, the company was allowed to build on 750 square meters, instead of the 330 square meters allowed by law.
Once the complaint was received, it was agreed that State Comptroller Micha Lindenstrauss would investigate the case, and on the basis of his findings, a decision would be made by Mazuz on how to proceed.
Lindenstrauss issued a recommendation to Mazuz five months ago to initiate an investigation, in view of that fact that "the findings [of his probe] do not remove suspicions and do not resolve the contradictions in the case."
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