Olmert: Reports I Defrauded Charities Are Distorted, Despicable

Police allege PM stole from charities, state to fund vacations; PM's travel coordinator: Olmert didn't steal.

Prime Minister Ehud Olmert said Saturday accusations that he stole thousands of dollars from charities were distorted and despicable.

The police and the Justice Ministry released a joint statement on Friday saying that they had widened a corruption investigation against Olmert and that the prime minister was suspected of asking several charities and state institutions to pay for the same trips abroad. The statement added that Olmert was suspected of using the money to fund family vacations.

"The reports and leaks that emerged shortly after the investigation began constitute a grave breach of acceptable norms, and deviate from everything that is acceptable and expected in a democratic regime," Olmert said, moments before heading to Paris for the Mediterranean Union summit.

"I was shocked by the distorted reports on behalf of law enforcement entities. The only result will be the weakening of the public trust in law enforcement bodies," he went on to say.

Olmert said further that using this matter to try to link the investigation to "favors for my family is reprehensible."

Responding to accusations he stole money from charities such as Yad Vashem and the AKIM association for the mentally disabled, Olmert said "these are institutions that I worked to advance and I invested immense energy into raising funds and I believe I made a significant contribution to them. Therefore, precisely against this backdrop, the exploitation in this way was particularly hurtful."

The corruption case threatens to bring Olmert down. His Kadima Party has scheduled primaries for September and analysts have said he probably will not run.

An aide to the prime minister who was in charge of coordinating Olmert's trips abroad, commented Saturday on the fresh charges against him, saying that "the Prime Minister is not a thief or a fraudster. He didn't steal a single shekel."

Rachael Risby Raz of the Prime Minister's Bureau said she is "saddened by the lies that the media disseminate daily."

Following the third round of questioning of Olmert in the ongoing corruption investigation against him, the police and the Justice Ministry issued a joint statement saying "the prime minister was asked to give his account about suspicions of serious fraud and other offenses." The premier was quizzed by investigators at his official residence in Jerusalem on Friday.

The statement said that the latest suspicions pertain to Olmert's stint as Jerusalem mayor and his time as minister of industry and trade, during which he allegedly asked for and received the money from organizations primarily in Israel and primarily involved in public activity.

According to the suspicions, Olmert's travel agency, Rishon Tours, allegedly sent invoices to each organization who gave money for the same flights, as though each had been the only contributor.

Each body then had its own receipt that it had funded the trip, and the surplus money - apparently a substantial amount - was allegedly deposited in a private bank account in Olmert's name, which was handled by the same travel agency. The suspicion is that these funds were then used to pay for private trips abroad for Olmert and his family. On some occasions, Olmert's wife and children traveled on their own. Police say Olmert amassed close to $100,000 in the private bank account over the course of many years.

Among the agencies which allegedly funded Olmert's trips are AKIM, a charity geared towards aiding mentally disabled children; ALEH, a group that cares for physically challenged children; Yad Vashem; the Simon Wiesenthal Center; and American Friends of the IDF.

Police are investigating whether Risby Raz coordinated the money transfers, and she has been questioned on the matter several times over the last few weeks.

"I appreciate and admire Prime Minister Ehud Olmert," Risby Raz said in a press release, "with whom I've been working for over seven years. Everyone who knows him is familiar with his wonderful, cordial and caring personality, and his amazing talents."

"For the last 35 years he has been fully committed himself to serving the country, and his contribution to the Jewish world is immense. I am honored to take part in this endeavor," Risby Raz continued.

"It is disheartening that in Israel, whatever one says to the investigators appears in the papers the next day and nobody thinks it is inappropriate," she said.

As to her questioning, Risby Raz said that she "cooperated with the police to the full. I am not suspected of anything and have not broken any law. Unfortunately, unlike other bodies who leak nonstop, I unable to divulge any information about my questioning. I cannot speak freely of the prime minister's innocence, because I'll be accused of perverting the course of justice," she concluded.

Over the last month, police have interviewed dozens of witnesses in connection with the case, including executives and employees of the various non-profit agencies. In addition, investigators raided the offices of Rishon Tours in Rishon Letzion, where they confiscated documents believed linked to the case.

Police sources say Olmert told investigators that his family's trips were funded through the use of flight credits, or points, that were accrued and credited to him by the various airlines. Yet, police counter that Olmert did not accumulate enough points to cover the cost of all his family's trips during this time. Police say the Olmert family frequently used double invoices to fund their trips abroad.

The statement released by the prosecution and the police also said that almost four weeks ago Attorney General Menachem Mazuz approved a widening of the criminal investigation against the premier for receiving illegal funds. The expansion of the investigation focused on new suspicions that were raised in the initial investigation - suspicions which related to Olmert's trips abroad in recent years.

Even though Mazuz gave police the go-ahead to question Olmert in connection with other outstanding cases about one month ago, the report's publication was postponed until Friday's questioning in order to prevent causing harm to the investigation by making the new suspicions public since Olmert had not yet given them his version.

Olmert is also suspected of receiving hundreds of thousands of dollars from Jewish-American millionaire Morris Talansky over a 15-year period.

The Prime Minister's Office said following the interview Friday that "the earth did not shake and the sky did not fall," alluding to indications that the current round of questioning would be harsher than the last.

"Prime Minister Olmert is convinced that he is innocent of any wrongdoing and firmly believes that as this investigation continues, that innocence will become apparent to all," the prime minister's spokesman, Mark Regev, said.

Regev wouldn't comment on the substance of the new suspicions.

Most of the questions were standard and pertained to business Olmert conducted abroad and in his posts as trade minister and Jerusalem mayor, the PMO said in a statement.

The questioning comes amid heightened wrangling between the police and Olmert's associates. A police source said Thursday that the allegations are extremely serious and that an ordinary citizen would have been arrested by now had such accusations been leveled.

Police on Friday also questioned Olmert's former bureau chief, Shula Zaken, in the offices of the national fraud unit in Bat-Yam. The session was a relatively short one which lasted just 30 minutes. Zaken, who was responsible for organizing Olmert's trips abroad during his tenure as a government minister, reportedly upheld her right to remain silent during the interrogation.

Olmert's associates accused the police Thursday of turning the case into a "personal campaign" against the prime minister, suggesting that Olmert would not be treated fairly during the interview.

Law enforcement sources said that had Olmert not been prime minister, he would have been arrested long ago. "Anyone else would have been arrested had similar suspicions been raised against him. Unlike any other suspect, Olmert is getting privileged treatment. He is setting the date and duration of the questioning," a source said.

Olmert's media adviser Amir Dan said that "it's time the police stopped their tendentious leaks. When the police leak, its called 'the public's right to know,' but when a suspect tries to defend himself he is accused of damaging the rule of law."