Morris Talansky preparing while testifying in Jerusalem in June 2009. Olmert Trial
Morris Talansky preparing while testifying in Jerusalem in June 2009. Photo by Archive: Tess Scheflan
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Moti Kimche
The businessman S.D. confronting the media in 2010. Photo by Moti Kimche

Two key witnesses against former Prime Minister Ehud Olmert told the police two years apart about how they transferred enormous sums of money to Olmert in his previous jobs as mayor of Jerusalem and industry and trade minister.

The statements of one of those witnesses, U.S. businessman Morris Talansky, contributed to Olmert's ouster from the Prime Minister's Office. The statements of the second, an Israeli businessman identified only as S.D., led to charges of bribery against a former premier, for the first time in Israel's history.

This morning, the Jerusalem District Court will issue its verdict in three corruption cases against Olmert, including the Talansky case. Meanwhile, S.D. will continue his testimony in the Tel Aviv District Court this week.

In 2008, Talansky, a Jewish-American businessman and fund-raiser, told police he gave hundreds of thousands of dollars to Olmert over a 15-year period. He helped finance Olmert's political campaigns, upgraded Olmert's flight tickets, financed his stays in luxury hotels and regularly gave him cash-filled envelopes.

S.D. told police an eerily similar story in 2010, after turning state's evidence. He testified to having served as a conduit for millions of shekels in bribes to Olmert and other senior officials in the Jerusalem municipality and the Israel Lands Administration, to secure approval for the capital's Holyland luxury apartment complex. His story covered the same years as Talansky's did.

In both cases, Olmert issued flat denials, accusing Talansky of being "delusional" and S.D. of lying. Olmert's lawyers brought a wealth of evidence regarding contradictions and inaccuracies in Talansky's testimony; S.D. openly describes himself as a cheat and a liar.

Talansky told the Jerusalem District Court he first met Olmert while collecting donations for Israel during the 1991 Gulf War. In time, they grew close. On trips to Israel, Talansky always visited Olmert, who was then mayor of Jerusalem. The visits never lasted more than about 15 minutes, he said, but each time, he would bring an envelope containing thousands of dollars in cash.

Asked about his relationship with Olmert, Talansky stated with open pride, "He loved me!" Olmert always greeted him with a hug, Talansky added.

Asked how Olmert spent the money he brought, Talansky replied, "He liked expensive cigars, pens, watches."

S.D., in contrast, said he was "never a close friend of Olmert's," but he "always found an open door; we would always hug and kiss, for whatever it was or wasn't worth."

"Whenever I was asked - and I was asked many times during those years - I would cover Olmert's campaign debts with the money I got from Holyland," the Israeli businessman said. "I would also send him holiday gifts, buy him cigars when he asked, and so forth."

Both men said they helped fund Olmert's mayoral campaigns, as well as his unsuccessful primary campaign for leadership of the Likud party, and then helped cover his enormous campaign debts.

Talansky, according to the indictment, covered $380,000 worth of debts from Olmert's 1998 mayoral campaign. S.D. says he covered NIS 1.5 million worth of campaign debts.

Usually, the men were informed of the debts by Olmert's longtime office manager and co-defendant, Shula Zaken. Because the law limits contributions by individual donors, both men said that at Zaken's request, they split the donations into several checks, each supposedly from a different relative.

But Olmert's requests didn't stop with campaign debts, the businessmen said. Police found a bank statement showing that Talansky also gave Olmert's brother Yossi $30,000 to cover his debts. Talansky at first denied this, saying he doesn't even know Yossi, but when confronted with the document, said he might have done so if Ehud had "asked me as a favor."

S.D., in contrast, vividly recalled a similar request: "In the second half of 2000, Mr. [Ehud] Olmert asked me to come to his office. Mr. Olmert told me he had a huge personal favor to ask: His brother had run up large debts with the underworld [which controls much of the so-called gray-market, or nonbank, loan industry]. ... He asked us to help his brother by giving him NIS 500,000 to pay his debts."

The money was given to Yossi Olmert in a series of postdated checks, and in exchange, Olmert promised to help rezone some of the land the developers wanted for the Holyland complex, said S.D.

Talansky said Olmert never repaid any of the money, though he once met Olmert's son in New York and asked him to tell his father he needed some of it back. "I never heard from him," he told the court, in tears.

Talansky also said he was insulted not to be invited to the circumcision ceremony of Olmert's grandson in the United States, and after that, their connection was severed.

S.D. said disillusionment set in when, shortly after giving the money to Olmert's brother, he learned that Olmert was about to leave the Industry and Trade Ministry, and would thus be unable to provide the promised quid pro quo. "I felt cheated," he said.

Like Talansky, he said he got nowhere when he tried to get money back from Olmert.