Attorney General Menachem Mazuz told State Comptroller Micha Lindenstrauss in August 2006 that Lindenstrauss' findings on Prime Minister Ehud Olmert's purchase of a Jerusalem home have the "potential for a criminal investigation" into Olmert, according to documents Lindenstrauss gave Mazuz on Sunday.

Lindenstrauss submitted the results of his probe into Olmert's purchase of a home on Cremieux Street in Jerusalem to Mazuz on Sunday, in light of the prime minister's failure to respond to the charges raised in the comptroller's report.

Mazuz will examine the findings in order to decide whether to order a criminal investigation.

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According to Lindenstrauss, the findings show that Olmert received a $480,000 discount on the home - which is $330,000 more than the standard discount for paying in cash, as the prime minister did.

"[The fact that] a major public figure, a government minister, receives such a large discount on the purchase of a home, requires a detailed explanation without delay, according to the norms of transparency, ethics, and proper administration," wrote attorney Rina Karmef from the State Comptroller's Office.

The home Olmert purchased was one of several residential units that were part of a project that necessitated the transfer of a historic Templar building designated for preservation. When Olmert purchased the home, the project had yet to receive the necessary authorizations for the transfer of the historical building. According to Lindenstrauss, officials in the Jerusalem Municipality granted "excessive priority" to the project in order to accelerate the authorization process.

"Until the [prime minister] signed the contract, the full dismantlement and reconstruction of a structure was never done in Jerusalem, and only the decision on dismantling and reconstructing the structure allowed the Olmert family to receive the apartment in the agreed upon conditions," said the findings. "Advancing the granting of authorizations in a special and irregular manner to a public figure 'because he has rights in the city' is an improper act that harms the norms of proper administration."

In early February, Olmert was given one month to respond to the allegations in the draft of the comptroller's report, which claimed he received a substantial discount on the purchase price as well as other favors.

Olmert's attorneys argue that the fact that Lindenstrauss' passed the materials on to Mazuz rather than publishing his report on the Cremieux probe proves that the comptroller has no evidence that Olmert broke the law.

Meanwhile, Mazuz is considering initiating a criminal investigation of Olmert with regard to appointments at the Ministry of Industry and Trade's Small and Medium Enterprises Authority (SMEA), and his involvement with the ministry's Investment Center. Both affairs concern Olmert's tenure as minister of industry, trade and labor.

The state comptroller's report issued last week calls for investigating allegations that Olmert gave preference in a government tender to a factory which is represented by his long-time partner, attorney Uri Messer. Fraud and breach of trust are alleged in this affair.

Mazuz is expected to make a decision on the issue in the very near future.