Prime Minister Ehud Olmert testified before police investigators Tuesday regarding the alleged Tax Authority corruption scandal.

The questioning was conducted by a National Fraud Investigation Unit team headed by the unit's commander Shlomi Ayalon at the Prime Minister's Residence. The questioning lasted four hours.

Police suspect that Tax Authority Director Jacky Matza and his predecessor Eitan Rub appointed to key positions people who would be acceptable to businessmen Yoram Karashi and Kobi Ben-Gur.

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The allegations are that the appointees then helped Karashi, Ben-Gur and their associates to obtain tax breaks.

Olmert was questioned regarding the alleged involvement of his bureau chief, Shula Zaken, who is suspected of acting to ensure the appointment of her associates to key Tax Authority positions in exchange for favors. He was also questioned about the Matza's appointment, which was made when Olmert was finance minister.

The prime minister himself is not suspected of any wrongdoing in the Tax Authority affair.

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