Comptroller: PM Helped Likud Activist Get Millions in Gov't Aid

Comptroller's report says Likud central committee member given NIS 7M by trade ministry during Olmert's stint as minister.

An annual report by State Comptroller Micha Lindenstrauss released Monday finds that Prime Minister Ehud Olmert helped to secure millions of shekels in government aid for a member of the Likud party's central committee, during the former's stint as the Likud minister of industry, trade and labor.

The report also tackled failures in several other fields of government conduct.

According to the report, Olmert, who joined former prime minister Ariel Sharon's exodus from Likud to Kadima in 2005, was involved in obtaining funds for Likud activist Rahamim "Ramu" Ben Shushan.

Lindenstrauss' report says Olmert was also aided in this effort by Oved Yehezkel, then a senior aide at the ministry, and Ra'anan Dinor, who was at the time the ministry's director-general. Dinor now holds the post of director-general of the Prime Minister's Office.

Dispersal of funds in this way is in contravention of the Law on Encouragement of Capital Investment and goes against ministry norms. The funds amounted to NIS 7.67 million in total. Ben Shushan reportedly used at least NIS 2.326 million of the sum.

Olmert's involvement in the affair is supposedly documented in internal ministry correspondence.

In June 2004, Ben Shushan submitted a grant proposal for the expansion of Teva Post, his company that grows mushrooms. The grant proposal was rejected on the grounds that the ministry did not have the authority to discuss investment in the particular project, which fell under the auspices of the Agriculture Ministry.

Ben Shushan claimed he was being discriminated against, citing a mushroom farm in Arad that had been approved for expansion by the Industry, Trade and Labor Ministry. Ben Shushan complained to Olmert, and three days later received a letter from Dinor's office, written in Yehezkel's handwriting.

The letter read: "Urgent: Ehud has requested a personal examination [of your case] and that he be updated."

Dinor was at the time the interim manager of the ministry's Investment Center, the body responsible for awarding grants.

In October of that year, Olmert's advisor issued an email detailing a phone message Ben Sushan had left for Yehezkel.

"It was agreed that he would submit a request for mushrooms - he submitted - and suddenly there is no money and they stopped his survey."

"He [Ben Shushan] said that, irregardless of his friendship with Ehud, as a normal citizen he is shocked by the management... Ehud gave an order... what's going on," the email continued.

In response to a query by the state comptroller, Ben Shushan said that he never called Olmert a "friend." Olmert and Yehezkel said in response that the minister's request to be updated was in line with his routine job responsibilities.

"In the opinion of the comptroller, the fact that the entrepreneur had direct contact with employees in the minister's bureau, and that he cited his relationship to the minister - the minister's request for a 'personal examination' can be interpreted by the interim manager of the Investment Center as an instruction to give preferential treatment to the entrepreneur," Lindenstrauss wrote.

The comptroller wrote that Yehezkel's special treatment of Ben Shushan's case contravenes practices designed to separate the professional and political echelons in government ministries.

During Olmert's tenure as Industry Minister, two proposals were approved for the expansion of Ben Shushan's company. The state comptroller's report says approval for both proposals violated the Law on Encouragement of Capital Investment.

In December 2002, the company requested an investment for expansion costing NIS 2.99 million. It was approved informally in a discussion held in Olmert's bureau, and was only officially approved at a later date by the Investment Center management.

The comptroller said that the approval given in the meeting rendered the official approval by the Investment Center "devoid of substance," even though it is the body authorized to grant such approvals. The report also said that the approval was given despite the fact that the company did not meet the center's employment terms, which require a company to hire at least 14 workers. Teva Post had only three members of staff.

The report also notes that approval to build the factory had expired, as it had been granted in May 1999 and was valid for only five years. Three months later, according to Lindenstrauss, a request to expand the factory was submitted, requiring a grant of NIS 1.99 million. This was also approved without authorization.

The state comptroller also wrote that the plan had been approved in an expedited fashion, deviating from regulations, which helped the company receive the grant before a law went into effect refusing such allowances to companies that do not export their product.

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