The alleged involvement of Shula Zaken, Prime Minister Ehud Olmert's office manager, in a bribery and fraud scandal at the Tax Authority is the worst crisis yet to hit Olmert's bureau.

Since the bureau was staffed some eight months ago, Olmert's office has been under the shadow of frequent crises, including a variety of investigations by the State Comptroller's Office into Olmert's dealings, former justice minister Haim Ramon's alleged forcible kiss and this summer's war in Lebanon.

Zaken, who has worked closely with Olmert for 30 years, was questioned Tuesday on suspicion that she was behind Tax Authority director Jacky Matza's appointment to the job. Matza and his predecessor, Eitan Rub, were arrested Tuesday on suspicion of widespread bribery and fraud. Police suspect that the two appointed people to key positions who would be acceptable to businessmen Kobi Ben-Gur and Yoram Karashi, Zaken's brother. Police also suspect that after Matza's appointment, Zaken utilized his good offices to help Karashi, a Judaica merchant and Jerusalem city councilman for the Likud party.

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The grave suspicions against Zaken, and the pictures of her on her way to being questioned, do not only spell personal trouble for her; they have a direct influence on Olmert's public image, even as he himself is suspected of corruption.

Olmert associates realized on Tuesday that Zaken's alleged involvement in the Tax Authority scandal could be used to harm Olmert personally and politically, and that it would be difficult to distance him from the affair. They also realized that this was a scandal that would keep them busy for quite a while.

Over the last few weeks, staff members close to Olmert had relaxed a bit, as the coalition had been stabilized and a majority was found to pass the budget. They even began to think that the crises were coming to a close as the year was winding down. But on Tuesday, the bureau went into crisis mode once again, deciding this time not to react to the allegations against Zaken and to try to play down the affair as much as possible. Bureau officials, including new and veteran Olmert aides as well as those who had assisted former prime minister Ariel Sharon, called Zaken to give her some encouragement.

Olmert, who by all accounts has come to view Zaken as family over the years, is upset by the alleged involvement of Zaken and her brother in a corruption scandal. Although Zaken's professional future is not at all clear, no one is talking about appointing a replacement, and even if she has to absent herself for a long period, her position is expected to go unfilled.

But it is Olmert himself who will soon be back in the hot seat. The attorney general is expected to decide in the next few days whether to open a criminal investigation into Olmert's role in the sale of Bank Leumi, and the state comptroller is due to decide whether to recommend a criminal probe into the political appointments that Olmert allegedly made as industry and trade minister.