Police Fraud Unit Questions PM Olmert

Officers of the National Police Department's Fraud Investigations Unit are questioning Prime Minister Ehud Olmert Tuesday morning in relation to corruption charges in the "Bank Leumi Affair." Olmert is suspected of interfering with the bank's privatization on behalf of wealthy allies from overseas. It is one of several criminal investigations or suspicions involving the Prime Minister.

Tuesday's probe, carried out "under caution," is taking place in the official Jerusalem residence of the Prime Minister. Questioning may continue on Wednesday. An interrogation "under caution" indicates that the interviewee may face criminal charges.

According to suspicions, then-Finance Minister Olmert allegedly intervened on behalf of two of his friends who were interested in buying control of Bank Leumi, which was undergoing privatization in 2005. The men involved eventually dropped out of the bidding and are not suspected of any wrongdoing.

When the tender for privatization of Bank Leumi was published in November, 2005, Olmert ordered changes which he explained would encourage more investors. But, police suspect that Olmert was using his influence to help his friends.

Suspicions pointing to Olmert's part in the Bank Leumi Affair were first raised in testimony given by the Finance Ministry's Accountant General, Dr. Yaron Zelicha. As a result of Zelicha's statements, State Comptroller Micha Lindenstrauss initiated his own investigation into the bank's privatization process. The material collected was handed to the State Prosecutor's Office, which, on January 17, 2007, ordered police to begin a criminal investigation of Ehud Olmert.

While Olmert was being questioned, Zelicha was appearing on the first hour of government-run Israel Radio's afternoon news magazine. "I was brought up not to merely swim with the tide or look the other way," Zelicha said. "I refused to have it be written in history that Bank Leumi was stolen under my watch... I and my people were able to stop the sale of Bank Leumi to Olmert's friends at a loss to the State of hundreds of millions of dollars."

Asked why he did not turn to Attorney General Menachem Mazuz with his suspicions, but rather to the State Comptroller, Zelicha said, "I didn't turn to Mazuz because I feared that he was a weak man, and that this was why he was appointed in the first place."