Prime Minister Ehud Olmert, in a dramatic statement late Thursday night, said he has never taken a bribe or "a single agora" for himself, but that he would resign if the attorney-general decides to indict him as a result of a new police investigation.
"I hope and believe that we will not get to this stage," he said.
Olmert's brief statement at his Jerusalem residence came just minutes after a court decision lifted the gag order that had been preventing any publication of the details of the case and the publication of the name of Morris Talansky as a central figure in the investigation.
A police source said the funds in question were "very large," and were allegedly received over an extensive period of time, "both directly and indirectly." Hundreds of thousands of dollars are believed to be involved.
Olmert said he first met Talansky, 75, from Long Island, in 1993, when he was running for Jerusalem mayor. "Mr. Talansky assisted me in raising money," Olmert said, saying that Talansky also helped him in 1998 when he ran for mayor again, and also in 1999, and 2002 in internal Likud elections. In addition, he said, he helped him cover deficits in election campaigns in which he took part.
The police source hinted that some of the money was tied to the 1999 Likud primary.
The new information is being reported after the police and Justice Ministry received a judge's approval on Thursday night to partially lift a media-ban on the investigation, removing some of the fog around the case that broke a week ago.
It remains unclear what, if anything, Olmert did in exchange for allegedly receiving the funds.
Olmert and Talansky established the charitable New Jerusalem Fund in 1999, which is possibly connected to the case, police sources said.
Talansky declined to comment on the affair in a telephone call with The Jerusalem Post before the gag order was lifted, saying he preferred to wait until he was free to speak. But his telephone was turned off when the court order was revoked.
"It's Yom Ha'atzmaut and I don't think today there should be any [dealing with] politics. I'm not involved in politics. I never was involved in politics," he said earlier. "[My family] are as confused as I am but we hope Hakadosh Baruch Hu [the Holy One, blessed be He] will help us out of this."
Olmert said there was nothing improper with the money that was raised for him, and that it was passed to his lawyer Uri Messer, who took care of these matters for him.
Olmert said he had no doubt that Messer handled the funds properly, and that the money was used for the campaigns and to cover campaign debts.
"I was investigated in this matter with the suspicion that I received money improperly," he said. "I am looking into the eyes of every single one of you and say that I never received a bribe, I never took an agora for my own pocket."
Olmert said he was elected to serve as prime minister, and had no intention of evading that responsibility.
"With that, and even though the law does not obligate this, if the attorney-general decides to issue an indictment against me, I will resign from my position."
Olmert said that every Israeli prime minister deals with sensitive and highly significant issues that impact on the country's very existence. "In these days we are in the midst of critical process for the country's security and future," he said.
"I have served the Israeli public in different positions for more than 30 years, out of a faith in it, its past and its future," he said, adding that he hopped the current storm would pass "as swiftly as it came."
Olmert is under suspicion of illegally receiving "large funds" from the millionaire New York financier beginning in 1998 when he was mayor of Jerusalem, and through to 2006, by which time he had served as Likud election campaign manager; industry, trade and labor minister; and finance minister.
"Ten days ago, the attorney-general ordered the launch of a new investigation against the prime minister and a number of others. The investigation deals with suspicions that Olmert illegally received funds, while holding public posts, in the period preceding his term as prime minister," a joint police and Justice Ministry statement said on Thursday night.
Police said Talansky "arrived in Israel during Pessah, and his testimony was taken during his stay. This witness has been invited for questioning after his apparent involvement in the transfer of funds was established from evidence obtained by the police during a separate investigation," the statement read.
During a round of questioning at his residence last Friday, Olmert "answered all the questions put to him, but denied illegally receiving funds," the statement continued.
Also named as involved in the suspected affair are Shula Zaken, Olmert's former bureau chief, and his close associate and lawyer, Uri Messer, both implicated in a number of other allegations against the prime minister. Their alleged involvement in the new affair has not been fully explained.
Police said Olmert's testimony was urgently sought last week due the "needs of the investigation," and that he would be interrogated again.
Talansky was asked to provide "preliminary testimony" to the Jerusalem District court - in addition to being questioned by police - because he resides abroad, was seeking to return home, and was "unlikely to provide a testimony after returning to his country," the Justice Ministry said.
Talansky's testimony to the court should not be seen as evidence that an indictment will be served to Olmert, the ministry and police stressed.
"This step was taken, as is acceptable in similar circumstances, so that if an indictment is eventually served, the judicial process won't be thwarted if it transpires that the said witness is unwilling to testify in court," the ministry said.
Police said the across-the-board ban on press reports has been needed to enable an "effective investigation."
"After the first stage of the investigation, which lasted 10 days... an evaluation was held, which led to the conclusion that the media ban can be tangibly reduced," police said, adding they would reassess the situation continuously with a view to release further information soon.
Details of the affair had already been published in The New York Post and The New York Times. Media outlets quoted a police official as saying there was no longer any point in prohibiting publication of details of the case since they were now available anyway.
Meanwhile, Talansky has hired attorney Jaques Chen, a former senior prosecutor, to represent him in the affair. Chen told The Jerusalem Post he would not comment on the case.
On Tuesday, the Jerusalem District Court agreed to release information on a request by the state prosecution to question an unnamed foreign national (Talansky) before he returned to his home abroad. It was the first detail of the investigation that was released. The hearing was held behind closed doors.
On the same day, the Tel Aviv Magistrate's Court rejected an appeal by media outlets to lift the ban imposed several days earlier.
The state's request took into account the possibility that it would eventually indict Olmert and Zaken, and that the witness would refuse to return to Israel to testify at the trial.
A panel of three judges heard State Attorney Moshe Lador and the attorneys representing Olmert, Zaken, Eli Zohar and Micha Fetman.
The story of this new investigation, the fifth against Olmert, broke last week, when Channel 2 news reported that police would question the prime minister on a new affair after giving him only 48 hours notice. Olmert was questioned the following day, last Friday, for more than an hour.
During the past 10 days, Zaken has been questioned four times by police on the same affair. She has refused to answer questions on each occasion and has been placed under house detention, which is due to expire on Friday.
Lawmakers from both sides of the political spectrum called on Olmert to resign.
MK Zevulun Orlev (National Union/National Religious Party) said, "This is a political earthquake. The nation has lost its trust in the prime minister."
"Olmert should not and cannot remain in his post," said MK Gideon Sa'ar (Likud).
MK Avshalom Vilan (Meretz) said, the prime minister must step side immediately, and the attorney-general must set a date for the end of the investigation. It is impossible to run a country under this kind of investigation."
(Jerusalem Post)
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