Attorney General Menachem Mazuz instructed Prime Minister Ehud Olmert on Thursday that he cannot continue to hold the finance portfolio himself, leading Olmert's aides to announce that he would appoint an acting finance minister by the end of May.

The position is not currently filled because the finance minister, Abraham Hirchson, announced earlier this month that he was suspending himself for three months due to an investigation of allegations that he embezzled funds from the National Workers' Union, the Leumit health maintenance organization and several related non-profit organizations.

Mazuz told Olmert to appoint an acting finance minister as soon as possible. He said Olmert could not maintain control of the treasury in view of the investigation into his involvement in the sale of Bank Leumi, as this would put Olmert directly in charge of the officials being questioned as part of the investigation.

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However, Mazuz did not give Olmert a time limit for appointing an acting finance minister.

"Since appointing a minister to such a central and sensitive ministry involves various considerations and preparations, the attorney general did not prevent the prime minister from serving as acting finance minister for a limited period of time," an aide to Mazuz explained.

Olmert's aides said an acting finance minister would be appointed before the Labor Party primaries on May 28, indicating that Olmert intends to hold the treasury for a few more weeks at most. The aides said the candidates would first agree on a candidate with Mazuz.

According to the aides, Mazuz said shortly after Hirchson's decision to suspend himself that there was no reason for Olmert not to keep the portfolio for a short period. However, Mazuz's instructions Thursday had a "slightly different tone" regarding the urgency of appointing a finance minister, they said.

PM aides advising against appointing Ramon
Olmert would like to appoint MK Haim Ramon as finance minister, although some associates are advising him against it, due to the public criticism and even petitions to the High Court of Justice that the move would probably provoke. Ramon is expected to complete his community service sentence in mid-May and tell Olmert whether he intends to return to political life. Other candidates include Kadima ministers Roni Bar-On, Meir Sheetrit and Shaul Mofaz.

Olmert's aides said that he would not deal with this matter before the release of the Winograd report on this summer's war in Lebanon next week. They dismissed statements by associates of Defense Minister Amir Peretz to the effect that Peretz was ready to swap portfolios immediately and take the treasury.

Meanwhile, Haaretz learned on Thursday that Mazuz intends to open a criminal investigation against Olmert over his alleged interference in decisions by the Investment Center and political appointments in the Small Businesses Authority.

Mazuz received the findings of the police and prosecution examination of the political appointments in the Small Businesses Authority months ago. However, he decided to wait until the release of the state comptroller's report on the Investment Center, and then make a decision at once on all the suspicions against Olmert during his term as industry and trade minister.

Mazuz asked for the probe into political appointments in the Small Businesses Authority after the release of the state comptroller's report in August 2006. The report said that when Olmert was industry minister, he and senior ministry officials used the Small Businesses Authority as source of jobs to hand out as favors to party cronies.

Justice Ministry sources predicted that Mazuz will start the criminal investigation into both these affairs soon, as most of the evidence had been submitted to the State Prosecutor's Office long before the release of the comptroller's report.

In other news, the Ometz association for good government demanded pm Thursday that Mazuz limit the time period in which Olmert can serve as acting finance minister and restrict him from dealing with matters connected to either Bank Leumi's sale or the probe into the Tax Authority. Some of his confidants, including his office manager, Shula Zaken, are involved in the latter.

Outgoing State Prosecutor Eran Shendar told Channel 10 news last night that the investigation against Olmert in the Bank Leumi affair is in advanced stages, and he hopes to decide on an indictment against Olmert before he resigns in August. He said the criminal probe against Hirchson is also expected to be completed in a few weeks, and that Mazuz should make his final decision within a month and a half.