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He hasn't slept through a single night since the scandal broke, Abraham Hirchson told the court on Tuesday. He lies there in torment, asking himself time and again why on earth he took the money - in cash. He fully deserved the money he took, Hirchson explained: The issue was how it found its way to his pocket.

Thus the former finance minister began his testimony in his trial for allegedly stealing about NIS 2.5 million from the National Workers Organization, which he had chaired. The prosecution may well have a hard time proving otherwise, especially after the death of a key witness.

Hirchson was supposed to continue his testimony yesterday, but last night he checked himself into Ichilov Hospital in Tel Aviv, complaining of heart trouble. The hearing has been postponed until later this month.

Meanwhile, on Tuesday he told the court: "I will try to explain that I was entitled to every agora, but I can't explain the improper way [I received it]," he said. "Blindness? Obtuseness? I am embarrassed and mortified at the way I received the money."

For two and a half years, he's been pilloried in the press, Hirchson complained: They showed him no mercy, yet he never responded. "It was very depressing, but I said, perhaps this is my penance."

Hirchson has rejected the plea bargain he was offered, though the other defendants in the NWO embezzlement case, which concerns NIS 12.3 million, have mostly done so. But Hirchson is sticking to his guns: The cash was pension payments he was due for chairing the NWO, he explains.

Why didn't he tell that to the police? Well, he was afraid he'd wind up accused of the other thefts from the union, Hirchson explains. "I was terrified to say that I'd taken something through another arrangement, unconnected with the theft," he told the court. He thought he'd wind up blamed for everything. The minister of finance and tourism, Hirchson said, suddenly finds himself being grilled by the police and reading nasty articles in the press - "It's terrible." He became ridden with anxiety and simply tried to put everything off.

Throughout his testimony, Hirchson kept coming back to Gideon Ben-Zur, the man he claims initiated and arranged the delivery of cash envelope payments to Hirchson's home. The problem the prosecution faces is that meanwhile Ben-Zur has died.

Ben-Zur had been one of the original defendants in the case, alongside Hirchson and Ovadia Cohen, formerly the money manager at the NWO, who turned state's witness.

Some of the cash he deposited in his bank account originated not with the NWO but with his son Ofer and sister-in-law the ex-minister told the court. The sister-in-law brought $12,000 [a year] from foreign sources, he said.

Judge Bracha Ophir-Tom inquired why he took money from his offspring while receiving a salary as a Knesset member, but Hirchson declined to elaborate, saying only that the money was spent on medications. At that stage, the judge closed the courtroom to the public to get a fuller answer.

For all that he claims entitlement to the money, on Sunday Hirchson returned NIS 1.2 million to the NWO and asked that it finalize the arrangements for his pension, which had never been handled. The prosecution claims that from 2000 to 2005, Hirchson received payments of about NIS 25,000 in cash each month, or NIS 1.2 million in total. Each month couriers delivered a cash envelope to Hirchson's home, sometimes to Hirchson himself.

He also received remarkable "holiday gifts" on Rosh Hashana and Passover, of NIS 10,000 to NIS 30,000 a time, altogether getting NIS 160,000 this way.

Ophir-Tom also wondered why Hirchson hadn't explained his position during the pre-trial hearing. "You served as finance minister, you travel the world. You know how things work. What could have been better than to say at the hearing what you're saying now - that you were entitled to the money you got? That's the minimum you'd have been expected to say at a hearing. Why didn't you say it?"

Because he has no experience in law, Hirchson said: He was following his lawyer's advice.

Hirchson is represented by Jacob Weinroth, who went over the charges with his client. The former minister described his close relations in the late 1990s with NWO financial manager Ovadia Cohen, and with Yitzhak Russo, the union's former head. But the camaraderie abruptly ceased in 2003, when Cohen confessed over coffee to Hirchson that he'd been stealing from the union after falling foul of gray-market moneylenders. Cohen had abused his trust, Hirchson told the court.

At which the judge asked, "What did you tell them to do? You were the chairman. The responsibility was yours."

Hirchson said he consulted Russo, who said he'd look into the matter. The NWO's legal counsels were also consulted, Hirchson said.

"Didn't you think the police should be called in?" Ophir-Tom inquired.

No, said Hirchson, not until the internal inquiry was done. "The moment I empowered my right hand, the director-general of the NWO, I did not limit his actions in any way. From that moment I left the decisions to them."

The judge wouldn't let go. "You are saying that in 2003, an inquiry was carried out, and it was clear that millions had disappeared, God knows where they went, and nothing was done?" she asked. "For two years, no police, no state comptroller? You were the chairman."

Shortly after the discovery, he took new roles in parliament, Hirchson answered. He did ask Russo about the state of the inquiry but the NWO lawyers told him not to call in the police, Hirchson said.

Hirchson admitted that he continued to work at the NWO after a 1996 legal amendment forbade him as a Knesset member to take money for outside work. He wanted the job security, he explained.

'Didn't think it mattered'

Upon leaving the NWO, Hirchson received NIS 680,000 at the expense of part of his severance compensation. He received the rest through cash envelopes brought to his home, as arranged with Ben-Zur, he explains.

He made a big mistake in not taking the whole pension up front, Hirchson now says. But that's how Ben-Zur ("there's no rush") told him to do things.

In any case, his retirement was only in part, Hirchson said. Ben-Zur therefore suggested that he take the minimal lump sum and later decide whether he was staying at the NWO or retiring, based on which the rest of the money would be paid.

In 1999 Hirchson decided to retire from the NWO entirely and focus on his parliamentary work. He asked Ben-Zur to look into his retirement arrangements, not wanting to consult with Russo or Cohen in order to avoid a war between them over his vacated seat, Hirchson explains.

The judge pointed out that Hirchson was relating to Ben-Zur as though the man was manager of a family firm, not the finance chief of a public organization. Ben-Zur did not in fact call the shots, or shouldn't have. "Who authorized him to take money? From where?" she pressed.

Hirchson said that at that stage, it was all suggestions. "You're still on shaky ground," the judge said. "How could Ben-Zur say he'd pay money up front? Was this his father's store? Could he put his hand in his pocket and give it over? Aren't there books in an organization like that? Aren't there records?"

Clearly he was due severance compensation that hadn't been paid, Hirchson said. The question was how to get it without setting off alarms.

"Ben-Zur would record every sum I received at the expense of my pension," he said. "Say in theory I wasn't entitled to the money - I'd return it. But I figured I knew what would happen. I'd take a check and deposit it, then in six months the Knesset would say I was taking a salary. Denials wouldn't help. Ben-Zur said to me, 'Who's to know?' He told me he'd go to the bank, convert the money into cash and give it to me. I must have been senseless to agree. Absolutely. If I hadn't agreed I wouldn't be here now. When I agreed to that way, I didn't relate any importance to it. My acquiescence - I don't know how to explain it."

'Trust me'

Ben-Zur promised to record every penny, Hirchson went on: to trust him. "And I did."

The judge wondered at the organization's management, given the undocumented money transfers. Again, Hirchson insisted that Ben-Zur was supposed to have recorded everything.

"Shouldn't you have signed receipts for the money?" Ophir-Tom inquired.

Again, Hirchson said he thought that hadn't been important, because he was sure Ben-Zur was keeping records.

He put some of the money into the bank, and spent some.

But in late 2004, Ben-Zur fell ill, and the union's financial condition deteriorated. The payments to Hirchson began to stutter as Ben-Zur spent time in hospital, and only resumed after he was replaced. But because of the NWO's financial deterioration, the payments were slashed to NIS 5,000 a month and in April 2005, they ceased entirely. In 2006, Hirchson wrote to the NWO, asking that his pension be formalized once and for all. But by that time, Yitzhak Russo had involved the state comptroller.