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The mayor of Kiryat Yam, Shmuel Siso, was questioned by police yesterday on suspicion of fraud and breach of public trust.

Siso and several accomplices are allegedly involved in arranging for a certain real estate development company to win the tender for a beach project, as Haaretz reported some eight months ago.

A few months ago fraud squad detectives came to Kiryat Yam's city hall, confiscated documents pertaining to the tender and questioned workers.

In recent months the brothers Rani and Adi Zim, owners of the Zim Group that won the tender, rescinded their purchase agreement in a move municipal officials attributed to "steamroller pressure by criminal elements." Haaretz has learned that the police's National Fraud Investigation Unit has been examining the bidding process, as well as the links between municipal officials and the Zim Group, veteran commercial developers based in Petah Tikva.

A municipal official said yesterday that the police investigation started some two years ago, but only now did the police question the mayor himself. The police suspect the bid was compromised by irregularities bordering on impropriety on the part of senior town officials, including the town's engineer and legal adviser.

Haaretz' inquiry was based on a petition submitted by attorney Tomy Nadashi, who alleged improper conduct by the mayor and city engineer. Nadashi said the two ignored the tender to develop the seafront property and misled the tender committee into believing that the construction plan matched the municipality's zoning ordinances, which earmarked the area exclusively for hotels and recreation activity.

The winning project was a vast complex taking up tens of thousands of square meters, which according to land assessors would raise the property's value to nearly NIS 40 million.