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Shula Zaken, the former bureau chief and confidante of former prime minister Ehud Olmert, is expected to return to Israel today from a vacation in the United States. She is expected to face arrest upon her arrival and questioning from national fraud investigation investigators over her alleged role in mediating bribery in the Holyland affair.

Three suspects in the case - former Bank Haboalim board chairman Dan Dankner, former Israel Lands Administration director Yaakov Efrati and former deputy mayor of Jerusalem Eli Simhayoff - were released yesterday to house arrest.

Dankner is suspected of giving money from Israel Salt Industries, which his family controlled, to Efrati in exchange for promoting the land development interests of the company. After questioning the suspects the police have not found proof of a direct transfer of money from Dankner to Efrati. Investigators claim that Meir Rabin, a relative of Efrati who is still in jail in connection with the investigation, served as the conduit for the bribes from Dankner to Efrati.

Dankner says that Rabin worked for Israel Salt as a consultant and lobbyist by the firm, and rejects the bribery accusations.

"I have cooperated, I am cooperating and will continue to cooperate fully," Dankner said yesterday at the Rishon Letzion Magistrate's Court. "I believe fully that I am innocent. Naturally I am relieved to have been released."

Attorneys for Rabin will challenge his continued remand in the Petah Tikva District Court this morning. Rabin has been held for two and a half weeks.

A few days ago police investigators staged a meeting between Rabin and a money-changer who police believe cashed hundreds of thousands of shekels worth of checks for Rabin.

Rabin has opted to exercise his right to remain silent. He has said that he does not trust the investigators, who he says are being misled astray by the state's witness in the case.