The Holyland project in Jerusalem
The Holyland project in Jerusalem Photo by Emil Salman
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Last week was ostensibly a ceasefire week for the Holyland affair. The director general of the Beit Shemesh municipality was arrested, former prime minister Ehud Olmert has not yet been interrogated, almost all the suspects were released from police custody to house arrest and the focus has shifted to other allegations against Olmert. These include the three affairs for which he is standing trial (in proceedings which were renewed last week ); another indictment against him, subject to a hearing, relates to political appointments made while he headed the Ministry of Trade, Industry and Labor.

As we already know by rote, Olmert is presumed innocent - and perhaps he will even surprise us and convince Deputy State Prosecutor Shuki Lemberger of his innocence. (Lemberger is in charge of the hearing for the political appointments' case. State Prosecutor Moshe Lador is assuming the role of attorney general for all cases connected to Olmert, as Attorney General Yehuda Weinstein has recused himself. ) But a defense attorney under such circumstances would have to be a particularly devout believer, or daring gambler, to not suggest to his client that he try for an overall plea bargain. The real story in the coming months will therefore be the one going on behind the scenes - Olmert's relationship with his attorneys - while the investigative, prosecuting and judicial steamroller continues to press forward.

Regarding payoff allegations, this week the police presented to the court an investigation they'd conducted into the possible transfer of NIS 1 million to Olmert from his former bureau chief Shula Zaken. This allegation, countered by Olmert's denial of ever receiving a bribe, requires proof. The claim is also likely to create the mistaken impression that Olmert, because of his senior position in the Jerusalem municipality and later in government ministries, must have been involved in the alleged misconduct.

The nerve center

This kind of network has no head, only a nerve center: the mediator, the macher. He has to touch all the various bases one after the other - engineers, officials, government leaders - in order to oil the creaking wheels of the mechanism, both large and small ones. In the Holyland affair, Meir Rabin has been cast in this role.

A simple man with narrow horizons, the macher looks at a piece of land and sees it as a plot with a house on it; entrepreneurs and politicians, by contrast, recognized that in Israeli real estate big money could be quarried from the ground. This was achieved by improving a plot of land and changing its designation, of course, but also by indirect methods, of the kind used by Salt Industries with its land in Atlit: If the land is assessed at a monetary value far higher than in the past, it suddenly turns into an asset that can be mortgaged, or given as collateral for a big loan that will create even more money and power.

Former prime ministers Ariel Sharon and Ehud Olmert wanted more than anything to control the Israel Lands Administration. The ILA may not have the most glamorous image, but it in effect creates money in the guise of soil, as when a valuable asset is exempted from payment, or receives an exceptional permit or an unusual discount (like that granted by the ILA to one of Israel's richest men, on his estate in Herzliya Pituah ). The big secret, which has been well kept by ILA employees, is that land has no clear, declared and official value; there has never been a comprehensive appraisal of state lands. The Bank of Israel knows how much money it has and the accountant general of the Finance Ministry jealously guards the balances, but the land is not budgeted and no one has any idea how much each piece of state land is worth.

If you don't know the land's actual value, it is impossible to confirm the scope of the gift involved when any valuation is made. Everything depends on the whim of one person interested in placating someone who wants to curry favor with someone else. The first is an ILA official, the second is the minister in charge, the third is a wealthy businessman, who will not be ungrateful to the second person, who in turn will generally not shortchange the first - in this case, not via a direct monetary reward, but through promotion within the ILA.

This cycle is a fact of life that cannot always be proven by criminal criteria. The fact that senior ILA officials and the ministers and their aides hang around together enables the officials to read political leaders' minds without a specific order - not to mention a written one - being handed down from above and liable to come into the hands of the National Fraud Unit some day. There are probably countless scandals that resemble the Holyland affair that have not been uncovered, and which the police and state prosecutor lack the resources to handle.

There is only one way to cleanse the ILA of the mold that has grown over it during its 50 years of existence: establishing a government commission of inquiry and transferring the authority to vet candidates for the leadership of the ILA to a special appointments committee. The committee would be comprised of the highest government officials and headed by a retired judge - the sort of committee that at present deals only with the chief of staff, his counterparts in the Shin Bet security service, the Mossad, the police and the Israel Prison Service, as well as with the Bank of Israel governor and his deputy. The governor of the "Bank of Israel for Real Estate," aka the Israel Lands Administration, has no less power (or subservience to a minister ) than central bank governor Stanley Fischer's deputy.

Ready to throw in the towel

Meanwhile, on the criminal track, on one hand close cooperation can be seen among the various bodies involved. Three young and talented attorneys - whose contribution to last month's conviction of Oded Tal of the ILA and of entrepreneur David Appel is being highly praised by Lador - comprise part of the team of Holyland investigators, guiding it from a legal standpoint and facilitating indictments. On the other hand, however, the police investigations and intelligence division is furious at the State Prosecutor's Office, to the point where they are ready to throw in the towel.

At issue is the case involving Foreign Minister Avigdor Lieberman. The police have recommended that he be tried, but the State Prosecutor's Office is months behind - despite its declared intentions - when it comes to determining whether they will try him or shelve the case. In the Prosecutor's Office they are defending themselves by claiming that the procrastination, which for the most part was not to Lador's liking, has also been beneficial; about a month and a half ago the results of another investigation, which the police did not have when they summed up the file, arrived from abroad. The updated forecast: Lador will finish handling the Lieberman file within about three weeks and will transfer it, on the way to an indictment, for the approval of Attorney General Weinstein, who will decide on the matter this summer.

In another internal wrestling match, the police and the State Prosecutor's Office are standing shoulder-to-shoulder opposite the state comptroller, who set in motion some of the investigations against Olmert - including the case surrounding the political appointments. In the police and in the State Prosecutor's Office they are preparing themselves for the painful chapters of the state comptroller's report, which will be published next week.

Both bodies are complaining that the state comptroller is treating them unfairly, especially in the examination of the wiretapping of Olmert's friend, former justice minister Haim Ramon. The details have to wait for the official publication, but it would not be much of a stretch to assume that once the turmoil dies down, the basic fact will remain: In the Olmert, Holyland and ILA investigations, it is still better to be on the side of the accuser rather than the accused.