Lottery officials, Omri Sharon implicated in Payis bribe scandal

Police suspect former MK Omri Sharon and some Likud party members of involvement in a lottery bribery scandal. Three lottery ticket franchisees of the Mifal Hapayis state lottery were arrested earlier this week on suspicion of bribing senior Mifal Hapayis officials in exchange for permits to sell tickets.

The ticket franchisees are suspected of passing the money to attorney Yaakov Bardugo, a former Mifal Hapayis director and Likud activist, who allegedly passed it via Omri Sharon and his associate, Likud member Gamliel Hasin, to senior lottery officials, including former lottery chairman Shimon Katzenelson.

The three fanchisees are Alon Alroi, Haim Golan and Rafael Dayan.

Several former lottery ticket franchisees had complained for some time of irregularities and foul play in Mifal Hapayis. These people, some of whom had bid for the franchise to sell lottery tickets, said they lost because the tenders were rigged.

Mifal Hapayis holds a tender every four years for lottery sale franchisees for eight districts nationwide. Each franchisee receives a district and is in charge of all the lottery ticket sales points in it. The franchisees have a turnover of hundreds of millions of shekels a year and usually make handsome profits.

After the 2004 tender, candidates who had lost said the franchisees who won did not fulfill the most basic requirements set by the lottery. One franchisee was the target of a criminal investigation at the time, although regulations prohibit a person under investigation from contending for a franchise.

Other candidates did not present the financial guarantee statements as required and at least one was a family relative of a former senior lottery official. The complainants also alleged that franchisees had paid bribes for winning and some filed legal suits against Mifal Hapayis. However, these suits were ultimately withdrawn.

"I withdrew my appeal because I realized that an individual cannot fight against a body like Mifal Hapayis. It could take years and in the end they would pressure me to compromise," said Shmuel Nir, former franchisee of Mifal Hapayis' Samaria district.

Nir claimed that although he had the best financial statement and fulfilled all Mifal Hapayis' requirements, and despite the fact he was officially promised another term, he did not win the tender. Instead, Haim Golan, one of the bribery suspects, received the franchise for that district.

"I realized that being an honest man wasn't suitable for the lottery," Nir said.

Some of the contenders who lost the 2004 franchises filed police complaints. Since then, the police have gathered material but, for a long period, did not question the people involved. A few people who were involved in the tender told Haaretz yesterday that the police had not asked for their testimonies.

In July 2004, Haaretz published testimonies of failed contenders who said they had been approached by people who presented themselves as close to certain politicians and to the Mifal Hapayis chairman Katzenelson. They asked for payment in return for winning the franchise.

"A person I know suggested, while I was bidding for the tender, that I meet two men, whom he said were close to Katzenelson. I asked why I should meet them, and he asked, do you want to win the franchise? We met in a cafe in Ashdod. They said they were close to Katzenelson and could make sure I got the franchise... I asked how much money was involved, fifty, a hundred thousand? And they only nodded," the contender said.

Another person, whose bid had been disqualified, said that in retrospect he was convinced that he was disqualified because he refused the conditions set by various Mifal Hapayis officials, such as using certain financiers whom Mifal Hapayis officials favored.

Another contender said that a well-connected political activist told him a few weeks before the tender results were released that he was "out of the picture," because everything was closed already.

There were rumors that then Likud MK Sharon, now serving a seven-month prison service for election financing irregularities and who was close to Hasin, was involved in running the tender together with his friend, lottery board chairman Katzenelson.

Shortly after the franchisees' names had been released, the Mifal Hapayis offices received an anonymous letter with the names of some of the franchisees, along with the sums of the bribes they had allegedly agreed to pay in return for their franchise.

In reaction, Mifal Hapayis commented that two appeals had been filed against the tender results of four years ago. Both were dismissed in court.

"Mifal Hapayis is not aware of any offenses during the selection process. The lottery's interest is to have the truth come out as soon as possible. The lottery has asked the police to speed up the investigation and said it would cooperate and provide all the necessary information."