The State Attorney's Office is seen as likely to announce the closure of one of the most sensational cases of the past decade, sometimes known as the Cyril Kern affair. It involved allegations that former Prime Minister Ariel Sharon received millions of dollars of bribes from Kern, a South African businessman, and from the Austrian businessman Martin Schlaff, through Sharon's sons. In February 2011 a special investigative team from the Israel Police national fraud squad recommended that Gilad Sharon and Omri Sharon be charged as accessories to bribery.

The Tel Aviv District Attorney's Office reviewed the stacks of evidence in the case, a task that took a number of months and was only recently completed. Prosecutor Noa Tavor subsequently recommended that the case be closed due to lack of evidence, Haaretz has learned. Contributing to the decision was the fact that Ariel Sharon has been in a coma since suffering a massive stroke in January 2006 and is therefore unfit to stand trial.

A number of meetings have been held on the case recently in the office of State Prosecutor Moshe Lador. The police investigative team, headed by Commander (ret. ) Nahum Levy, felt it had enough prima facie evidence to prosecute.

Former Attorney General Menachem Mazuz said just before he retired in 2010 that he had decided not to close the file because "the suspicions under investigation were so serious and with great public interest." Mazuz did not make a decision on the case before leaving office, leaving it his successor Yehuda Weinstein, who is expected to announce his decision soon.

Campaign finances

In late 2001 Sharon announced announced that he planned to return $1.5 million to American donors because the state comptroller determined that it was illegal to receive such large sums. The contributions were for Sharon's Likud primary campaign, earlier that year.

In early 2002 Kern, a friend of the Sharon family, deposited $1.5 million into a bank account of a member of the Sharon family, as a loan. The Israel Police asked South African authorities to investigate the matter.

Kern was suspected of being a front man for Schlaff, who had economic interests in Israel. Kern had transfered the loan money from Bawag, an Austrian bank that was Schlaff's partner in the Oasis casino in Jericho, in the West Bank. Schlaff was considered a major strategic partner at the time in the casino, together with Bawag, the Palestinian Authority and Casinos Austria.

It is believed that Sharon repaid Kern's loan, but the police suspected that the money was given to a company owned by the Schlaff family. In November and December 2002 two additional deposits, totaling around $3 million, were made to Sharon family accounts.

Police suspect that Schlaff transferred a total of $4.5 million to the Sharon family: $1.5 million was returned to U.S. donors, $1.5 million remained in Sharon family bank accounts and $1.5 million was returned to Kern by Gilad Sharon in late 2002. This sum was transferred to a company clearly affiliated with Schlaff, the Liechtenstein-based Universal Finanz Holding. The funds eventually wound up in another Liechtenstein-based company, one controlled by a business partner of Schlaff's in Germany.

Since the affair broke, Schlaff has stayed away from Israel, even missing his father's funeral in Jerusalem.

Gilad Sharon has invoked his right to remain silent throughout the investigation.

In early 2002 Gilad moved the money into a joint bank account held with his father in Israel. In late 2002 an additional $3 million was transferred from Getex, a large exporter of seeds (peas, millet, wheat ) from Eastern Europe, to the bank accounts of Gilad and Omri Sharon.

Gilad Sharon was paid as a consultant on developing communes in Russia - a service bought by Getex, one of whose owners was Robert Nowikovsky, a businessman with very close ties to Schlaff.

A Caribbean-based company owned by Kern concluded an agreement with Getex to assist with the communes project. Kern's company, Gebo, hired the services of Charington, a company set up by Gilad Sharon in the Virgin Islands, for what it said was Gilad's know-how and management knowledge. It called him an expert with experience in agriculture. The police investigation uncovered significant funds transfers from Schlaff's company to Getex. Police said Nowikovsky is also behind a $1 million loan guarantee for Yisrael Beiteinu in 1999.

Other affairs involving the Sharon family were also examined during the investigation, such as allegations of huge profits made by Gilad Sharon on property deals in Canada along with Israeli businessman Arie Genger.

The Justice Ministry said in a response Sunday that no decision on the Kern case has been made at this time.