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The board of directors of the Mifal Hapayis national lottery made the dramatic decision Wednesday to rescind the selection committee's choice for the 2009 Sapir Prize for literature, due to an alleged conflict of interest. The annual award is sponsored by the lottery. Alon Hilu had been selected as the winning author by the jury. The lottery board has ordered that a new prize jury repeat the selection process. The other writers in the running for the prize were Amnon Dankner, Nurith Gertz, Iris Leal and Ronit Matalon.

The alleged conflict of interest involved jury chairman Yossi Sarid (who also writes for Haaretz), as a result of business dealings Sarid had during the current tax year with Yedioth Books, which was Alon Hilu's publisher. Sarid's niece through marriage was also the editor of Hilu's book at the publishing house. Mifal Hapayis also contends that Sarid and Hilu previously organized joint literary events. Sources at the lottery commission reported that Sarid did not fill out a disclosure form or report these ties to Hilu, and that the lottery commission administration and the other judges were unaware of them.

Ariel Hirschfeld (who also writes for Haaretz) is another member of the prize jury whose personal ties to a candidate, in this case Ronit Matalon, have been under scrutiny. Matalon's book "The Sound of Our Steps" is in fact dedicated to Hirschfeld. Unlike Sarid, Hirschfeld submitted a statement to the lottery commission disclosing this personal connection; however, a source at the commission says the information was not passed along to the necessary parties.

The lottery commission further stated that the conduct in question was carried out in all innocence and due to an oversight, but the consequences were unfortunate and led to the decision to rescind the prize awarded to Hilu.

Yossi Sarid said in response: "This whole strange affair causes me great sorrow. I am especially sorry for a young important author who is being embarrassed, as is his good book, through no fault of his own. I again say that the Sapir Prize was awarded this year, as in previous years, based on relevant and entirely proper considerations on the part of all the judges on the committee, and everything else is gossip. After almost 40 years in the Knesset and the cabinet, I moved to the literary scene - only then, for the first time in my life, to have my integrity questioned, and all due to narrowmindedness, settling of personal scores, and the jealousy of authors and publishers."

Hirschfeld said in reaction: "As it relates to me, [the accusation] seems to me to be totally baseless. I was in touch with Matalon years ago and this has no relationship with my judging. Anyone who makes an issue of this is doing so for political reasons or for his own advantage. There are many works dedicated to me, including one which was a candidate for the Sapir Prize two years ago. The matter was disclosed to everyone and is not related to the value of the literary work."

Yedioth Books responded on its own behalf and on behalf of Hilu, who declined to comment: "The book the 'House of Dajani' is one of the best books to have been written here, and we are sure that the decision of the judges was professional and fair. We are surprised and saddened by the decision to rescind the selection."

Rana Verbin, the editor of Hilu's book and Sarid's niece, said she never hid the family connection. "Alon Hilu is my author, an excellent author who is a fitting choice for the prize."