With a little help from his friends

By Uri Blau Haaretz Magazine 24 February 2006
www.haaretz.com/hasen/spages/686659.html

It is the year 2000. The mayor of Jerusalem, Ehud Olmert, is sitting in his
office with his feet on the desk and a cigar in his mouth. Also in the room
are his eternal bureau chief, Shula Zaken, and a guest. Suddenly the door
opens and into the room steps someone who obviously feels at home in the
office. Olmert leaps out of his chair and rushes to embrace the man. It is a
brotherly embrace. "Who is he?" the guest asks, taken aback by the emotional
intensity. "It's Benny Tavin," Zaken tells him in a whisper.

In this period, Benny Tavin should have been the least desirable visitor in
Olmert's office. When Olmert was treasurer of the Likud party, Tavin was the
man who supplied the movement's donors with fictitious invoices to the tune
of a million shekels. That stunt almost cost Olmert his political career. He
underwent a prolonged and expensive trial and was exonerated only after the
judge was persuaded that he had not known about the fraudulent behavior of
Tavin and the others on the treasurer's staff. Tavin was sentenced to eight
months in prison and fined. Olmert might have been expected to be furious at
people like Tavin, who embroiled him in the affair, and to keep his distance
from them. Instead, he embraced Tavin.

According to the polls, on March 28 Israel will elect, of its own free will
and deliberate choice, a very forgiving politician as its leader. In the
course of his political career, Olmert has interceded on behalf of convicted
criminals more than once. When Likud activist Shlomi Oz was convicted of
counterfeiting dollars, Olmert sent written character testimony on his
behalf. When Yehoshua Halperin, the CEO of the Bank of North America, was
slapped with an injunction forbidding him to leave the country, Olmert tried
to get the injunction revoked. After businessman Shlomo Eisenberg was
convicted of fraud, Olmert sent the judges a letter describing the convicted
man's contribution to the economy of Jerusalem and requesting that they take
this into consideration. Olmert attended the mass rally outside the prison
on the day former Shas chairman Aryeh Deri arrived there to begin serving
his prison term. He also defended Omri Sharon, the prime minister's son, on
the eve of his conviction.

Ehud Olmert is 60 years old. He has been in public life for nearly 40 years
and has been a Knesset member, with short breaks, since 1974. The 40 years
of Olmert's political molding have in large measure also been the 40 years
in which Israel's culture of government was shaped. It is a period that
began with the twilight of the rule of Mapai, the forerunner of Labor, and
ended just recently with the "big bang." In between, the Likud was in power
most of the time. The state and Olmert did a lot of growing up in that time
frame. Olmert also became rich.
He entered the Knesset at the age of 29 as a rough and ready politico who
made a name for himself as a crusader against corruption and organized
crime. He has come a long way since the day he held up a sheaf of papers on
the Knesset podium and declared that the police had evidence that the
housing minister, Avraham Ofer, was implicated in bribery. In November 2005,
he told the audience at a business conference, "If people say the government
is corrupt, that applies to you, too."

Half-time MK

Olmert was born in the community of Nahalat Jabotinsky, next to Binyamina,
in September 1945. From infancy he imbibed politics. His father, Mordechai
Olmert, was a member of the Third and Fourth Knessets for the Herut party,
the forerunner of the Likud. In 1965 his father left Herut and four years
later joined the Free Center, founded by attorney Shmuel Tamir. Ehud
Olmert's political debut came in 1966, when he was 21. He asked for the
floor at the Herut Convention and demanded the immediate resignation of
Menachem Begin as the party's leader due to his failure to oust Mapai in six
consecutive election campaigns since the founding of the country. Convention
delegates started to close in on Olmert in order to beat some sense into
him, but Begin defended him chivalrously. "As long as he comes to me with
open demands and does not conspire against me," said the man who would
become Israel's sixth prime minister, in 1977, "that is a legitimate
motion."

In 1967, a month after the Six-Day War, Herut split and Tamir established
the Free Center. The new party won four seats in the 1969 elections. Akiva
Nof, the secretary of the Knesset faction, went abroad for studies and
suggested to Tamir that Olmert replace him. Olmert became the party's
secretary and spokesman. It was around this time that he met the journalist
Dan Margalit, who would become his close friend. Olmert became Tamir's
right-hand man and clerked in his law office. He aided Tamir in
investigating various corruption scandals, which were later reported in the
press. Among other bodies, corruption was investigated in Autocars, a
Haifa-based automobile assembly plant, and in the national water company,
Mekorot.

In 1973 Olmert and MK Eliezer Shostak left the Free Center and established
the Independent Center. Tamir told confidants that this was "a stab in the
back." His son, Yosef Tamir, is now No. 42 on the Kadima list of Knesset
candidates. Akiva Nof remembers a conversation with Olmert not long before
the split. "Ehud and I were driving through the streets of Tel Aviv in my
car and between one stoplight and the next, Ehud told me, 'You'll see,
Akiva, in another 30-35 years, all that will separate me from the Prime
Minister's Office will probably be Dan Meridor.'" referring to the former MK
and minister.

A shining warrior

In the December 1973 elections, Olmert was voted into the Knesset as a
representative of the Independent Center, which had become a faction in the
Likud. His activity in exposing corruption, which had begun at the
initiative of MK Shmuel Tamir, earned him favorable headlines. Immediately
upon entering the Knesset, he was involved in exposing a series of
corruption episodes in professional soccer, in cooperation with a new Labor
Party MK named Yossi Sarid, who this year retired from politics. Sarid: "We
brought a lot of joy and vitality to the petrified Knesset of the mid-1970s.
At the same time, I entered the Knesset then and left it now with the same
shirt and the same NIS 60 wristwatch. Not so Olmert, who from the outset was
able to exploit his status in the Knesset as an attorney and from the outset
did not a little for himself and for his business affairs."

MK Olmert's image was of a shining warrior doing battle against organized
crime. He even asked the Knesset for personal security against criminals who
were threatening his life. On December 28, 1976, MK Olmert stated from the
Knesset podium, "I have received information that the Israel Police believe
they have sufficient material to launch a criminal investigation against
housing minister Avraham Ofer." Less than a week later, Ofer shot himself in
his car on a Tel Aviv beach. After his suicide the investigation was
shelved. His son, attorney Dan Ofer, in his first public response since
then: "I accuse Ehud Olmert. In the days preceding the suicide of my father,
of blessed memory, Olmert used cheap demagoguery in the Knesset and did a
character assassination of my father, an act of McCarthyism. He sought cheap
publicity at the expense of my father's blood."

At the time, an MK was allowed to own a private business, and Olmert took
good advantage of this. He was both an MK and a media star as a fighter
against corruption, and a private lawyer representing economic interests. In
1977 he and two other attorneys, Uri Messer and Baruch Adler, left the law
office of Jerusalem attorney Uzi Atzmon. The secretary, Shula Zaken, went
with them. The Ehud Olmert and Co. law office was launched. From that day to
this, Uri Messer and Shula Zaken have been the two central figures in
Olmert's business and political life. In December 1988, when he received his
first cabinet appointment, as minister without portfolio, Olmert left the
law practice he had established.

Aryeh Avneri, a former senior correspondent for the daily Yedioth Ahronoth
and now chairman of Ometz, an association that combats public corruption,
has been following Olmert's political career for years with mounting
frustration. "I wanted to understand how he managed to become rich in the
course of his political activity," Avneri says. "Olmert used to receive
clients while he was an MK. People who wanted shortcuts to various state
authorities and bodies hired his expensive services, because of his access
to Knesset committees and decision makers who dealt with the subjects they
were interested in."

It is important to note here that Olmert's activities in this period were
permitted by law. Until 1996, MKs were permitted to hold other jobs in
addition to their tenure in the parliament, subject to several restrictions
(since 1989, for example, work that poses a conflict of interest has been
prohibited and income from other work cannot exceed half the person's income
as an MK). It took the legislature a long time to completely bar elected
representatives from receiving a salary from private bodies they
encountered, or were liable to encounter, within the framework of their
public position.

One of the biggest deals that Olmert brokered while serving as an MK was the
sale of the Israel Land Development Corporation (Hahsharat Hayishuv), a vast
holding company worth tens of millions of shekels, to businessman Jacob
Nimrodi. It was only after the sale that it turned out that the corporation
had been sold to Nimrodi for next to nothing, given the true value of its
hidden assets. In an interview Olmert gave to Haaretz correspondent Gideon
Alon in October 1987, after the sale, he chose to emphasize the "Zionist
character" of the transaction and not the economic aspect. When he was asked
why the investors (the Nimrodi family) had solicited his services, he
replied, "I assume he came to me the way clients come to lawyers."

Asked whether his activity as a lawyer was not coming at the expense of the
time his voters expected him to devote to parliamentary activity, he said,
"I generally don't hear complaints that I'm not doing my public jobs
properly ... I very much support the involvement of MKs and public figures
in matters that are outside political life. In my opinion this is an
enriching, diversified and fruitful experience when one has to make
decisions without being cut off [from events]."

Olmert's office, this week: "The acting prime minister left the law office
in December 1988. The acting prime minister neither has nor ever had common
assets with attorney Baruch Adler or attorney Messer since their partnership
ceased in 1988."

The affair of the fictitious invoices

Since the beginning of the 1980s, it is doubtful whether any elected
representative - with the possible exception of Prime Minister Ariel
Sharon - has been entangled and investigated in so many affairs. So far,
Olmert has eluded conviction in all of them.

In 1981 Olmert received a loan of $50,000 from a fictitious company owned by
Yehoshua Halperin, the head of the Bank of North America. The bank's money
was transferred to the company by order of Halperin. The loan to Olmert was
not discovered until four years later, during the police investigation of
Halperin, which was launched when the bank crashed with a deafening roar. In
his testimony, corruption fighter Olmert confirmed that he had interceded on
his behalf "as a friend" and tried to persuade the head of the fraud
investigations unit, police Brigadier General Yoram Gonen, to soften the
injunction barring Halperin from going abroad. When asked whether Halperin
had asked him to return the money he borrowed, Olmert said, "He never picked
up the phone and said, 'Ehud, you took a loan, why don't you pay it back?'
Or 'You should pay it back,' or 'The due date for the loan is ...' or
anything like that. No." The attorney general at the time, Yosef Harish,
decided not to place Olmert on trial.

In April 1989, the affair of the "fictitious invoices" exploded. That
affair, which some years later led to Olmert's indictment and trial,
tarnished his reputation but ended in his acquittal. It turned out that the
Likud moneymen had an original method for raising money. They asked
businessmen for donations and in return promised them invoices from
advertising firms for services they never received. The donors thus enjoyed
the best of both worlds: they bought influence in the Likud and they also
received an invoice that could be used as a tax deduction.
Dozens of indictments were filed in the wake of the fraud - against the
staff of the Likud treasurer's unit, against the fund-raisers, against the
companies that supplied the fictitious invoices and against the donors
themselves, who were accomplices to the fraud. Some of the owners of the
corporations that were involved were able to escape indictment by paying a
fine. The best known of them is Yuli Ofer, who paid a fine of NIS 750,000.

However, the main trial took place against Mordechai Yahel, the former
accountant of the Likud faction; against his superior, Menahem Atzmon, who
was the Likud treasurer; and against Yona Peled, a fund-raiser. They were
indicted in Tel Aviv District Court in 1991. Olmert, who was also Likud
treasurer in association with Atzmon, was initially not placed on trial, at
the decision of the state prosecutor at the time, Dorit Beinisch (now the
deputy president of the Supreme Court). A public association, Amitai,
petitioned the High Court of Justice against the decision and the State
Prosecutor's Office informed the court that it would reconsider placing
Olmert on trial at the conclusion of the trial of the other defendants.

The three senior Likud officials were convicted in March 1996, and that
September the new attorney general, Michael Ben Yair, decided to indict
Olmert on two counts: first, that in August 1988 he had entered into a
criminal conspiracy with other money people from the Likud to collect
donations from corporations in contravention of the Party Financing Law, by
providing fictitious advertising services; and second, that in the first
half of 1989 Olmert had signed a declaration for the state comptroller
according to which the Likud books from the period of the elections - which
were turned over to the comptroller under the law - reflected, to the best
of his knowledge, all the Likud?s revenues and expenditures. The accused,
the charge sheet stated, knowingly signed a false statement.

Olmert's trial was held in the courtroom of Judge Oded Mudrik. In his court
testimony Olmert stated that in the 1988 election campaign he was not
responsible for fund-raising for the Likud in Israel, but only abroad.
"There was a situation here in which it was clear that there was a structure
and division of responsibility in roles. I am not willing to take
responsibility for anything I did not deal with," he stated. He said he had
been very busy during this period and had not found time to manage the
Likud's financial affairs. "I do not think I ever had a year like that in my
life. It was insane. During those months I had to appear in three or four
different places every evening." Olmert said he had fulfilled his duty as
treasurer by choosing the right people to handle the party's financial
affairs. "I trusted them completely," he said.

The trial ended in September 1997 with Olmert's acquittal. At the same time,
Judge Mudrik had a few harsh things to say about Olmert. In regard to the
second count of the indictment, the judge wrote, in part, "This manner of
signing is quite outrageous. First of all, it reflects an attitude that is
not serious toward the institution of the State Comptroller and toward the
public responsibility of the signatory ... However, I must examine the issue
in terms of criminal responsibility ... and in this context, although the
manner of signing creates a harsh impression, it cannot be said that it was
done in awareness of the falsity that underlies the declaration."

During the investigation, the police came up with another suspicion: that a
private trip abroad by Olmert's wife and daughter had been paid for with
Likud funds. This time the file was closed due to insufficient evidence.
When asked by the police whether he knew that Aliza and Michal Olmert [his
wife and daughter, respectively] had flown to New York using money that had
been donated to the Likud's 1988 election campaign, Olmert replied, "I'm
flabbergasted at the question. I never dealt with the technical side of
paying for trips. That is always done by my assistant, Shula Zaken."
Attorney General Ben Yair summed up, "It was found that there is no evidence
and therefore it was decided not to submit an indictment." Tougher bosses
than Olmert might have fired a secretary who made such a major mistake and
entangled her employer in criminal suspicions. Olmert, ever loyal, has
retained her to this day as his close trusted aide.

Loss of memory

One of the last opportunities to see Olmert on the witness stand was in a
trial that did not make headlines, in the District Labor Court. He was
summoned to testify by Yisrael Twito, an ultra-Orthodox Jew who helped
Olmert in his 1993 run for mayor of Jerusalem. Twito sued the municipality
after his retirement as a city employee at the end of the 1990s, claiming he
was still owed money. In his suit, which was filed by attorney Yossi Arnon,
Twito claimed that Olmert had promised him a job in the municipality after
the elections, but that he was sometimes paid only an advance on his salary
and sometimes nothing at all.

According to the 1994-1995 report submitted by municipal controller Uri
Sivan, Twito's employment "was against the law ... and in total
contravention of the municipality's procedures for hiring employees." The
report added, "The mayor is responsible for hiring the employee against the
law and for the amounts of money that he was paid, and bears personal
responsibility toward the municipality to return the money."

This is the first publication of Olmert's testimony, which was given in
February 2003. This marginal affair would hardly be worth mentioning were it
not for the evasions and temporary loss of memory shown by the acting prime
minister.

Attorney Arnon: Was the claimant your aide, your worker ... before the 1993
elections?

Olmert: "There was no connection between us before the elections."

Was the claimant one of your aides in the election campaign?

"In my election campaign, there were more than 150 people."

Was he promised a job in the municipality afterward?

"No."

Are you aware that after the elections he first worked for your deputy,
Yigal Amedi?
"I don't remember."

The fact that he worked for Mr. Amedi is agreed in this court.

"I have no idea what is agreed in this court. Offhand, I say it is sheer
nonsense ... I am not versed in the details of what is agreed or not agreed
... I personally do not remember. He was not deputy mayor, he could not have
employed someone. I don't remember."

Despite the fact that he was one of 150 activists, did you congratulate him
for his work at your victory party?

"I don't remember. I can only say that I made sure to thank dozens of
people. It is possible that I mentioned his name among them."

Do you recall the quarrel with the workers committee about attempts to bring
the claimant into the municipality?

"I don't remember ... I do not remember grounds for a dispute of which the
complainant was the subject."

The 1995 report [of the municipal controller] refers to political
appointments ... The date of this agreement is November 2, 1993,
retroactively.

"I certainly did not deal with any private case concerning the salary of an
employee ..."

Do you recall a promise that you made concerning Yisrael [Twito] to someone?

"That is totally unfounded. That is part of the complainant's imagination
... No commitment was ever made."

At this point attorney Arnon showed Olmert the municipal controller's
report, which mentions the discussion that was held in Olmert's office about
Twito.

Do you remember this event at which you ordered his appointment?

"I do not deny what is stated here. But I do not remember. It was 10 years
ago."

In the cross-examination, Olmert was asked whether it is true that the
claimant told him he would receive the same
salary as a Knesset member.

"That's not serious. That never happened. The claimant is a person who has a
tendency to hallucinate. I'm not just saying this, I'm saying it as an
allegation."

There is another allegation, that you appointed him as your representative
in the sanitation department?
"That is totally unfounded."

Attorney Arnon later asked Olmert how he knew the claimant had a vivid
imagination if he is only one of many employees in the municipality.
Olmert's reply: "You asked me about the period in which he worked on the
campaign staff. He later worked in the municipality and one of the reasons
that he is better known to me than others is because he was problematic. The
problematic people are usually known."

The embrace and the Greek island
In the 1999 Likud primaries Olmert ran against Ariel Sharon for the party
leadership. Benny Tavin, whom Olmert embraced in his office, helped Olmert
energetically. Tavin, who since ran up massive debts, is again on trial for
criminal offenses. In 2004 he and his patron, the businessman and contractor
David Appel, were indicted on serious bribery and fraud charges. Tavin,
"defendant No. 3," is described in the indictment as "the front man of
defendant No. 1 [Appel] in financial matters." Tavin is accused of carrying
out, at [Appel's] instruction, "financial activities personally and through
companies he controlled." He is also accused - again - of "receiving monies
against false invoices" in the amount of NIS 1 million. In 2003 he was also
questioned, along with Shlomi Oz, in connection with defrauding Bank Leumi
of millions of shekels.

The Appel-Tavin-Oz trio is quite interesting in the Olmert context. Olmert
has known Appel for decades, since he started practicing law. Appel
describes Tavin and Oz as his friends, and both of them worked on Olmert's
campaign staff in the 1999 primaries. Oz, who wields considerable power in
the Likud Central Committee, was a member of an 18-man gang led by the
Alperon family and served 14 months in jail. As a young man Oz worked for
the Betar Jerusalem soccer team, where he met Olmert. Some years later, when
Oz was tried for counterfeiting dollars, Olmert asked the District Court to
be lenient with him. Oz did not forget that gesture and supported him in the
primaries against Sharon.

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However, at a certain stage the suspicion arose that friendship was not the
only reason for Tavin and Oz's active support for Olmert in the primaries.
During Olmert's tenure as mayor of Jerusalem he became entangled in the
"Greek island affair." The police recommended that he be tried for accepting
bribes from David Appel. The attorney general closed the case in 2004, due
to lack of evidence, but the course of events as described by Attorney
General Menachem Mazuz himself is fascinating:
"On a date prior to June 3, 1999, Shula Zaken, a senior adviser to the mayor
of Jerusalem, called Appel and left a message according to which she sought
his contribution to Olmert's election campaign. On June 3, 1999, Appel
called Zaken, who told him that she had been charged with organizing
financial support for Olmert ahead of his race for the Likud leadership.
Later in the conversation, Appel asked Zaken to invite the mayor of Athens,
who according to Appel was eager to meet Olmert and was going to be
appointed the next prime minister of Greece. This request raised the
suspicion that Appel was trying to exploit a meeting with the mayor of
Athens to further his business, as during that year Appel began to plan the
establishment of a tourism and vacation center at several sites around the
world, and the first tourism center was to be built on the tiny Greek island
of Patroklos, which lies southeast of Athens in the Aegean Sea.

"During his conversation with Zaken, Appel also spoke with Olmert himself,
over the second line, and in this conversation the matter of the financial
donation does not come up. Olmert tells Appel that he intends to put forward
his candidacy for leader of the Likud and Appel tells Olmert that this time
he is 'behind him with all his strength.' Almost in the same breath Appel
requests 'a small favor:' the matter of the visit of the mayor of Athens and
the signing of a twin-cities pact between Jerusalem and Athens; Olmert
reacts by saying, 'Tell me what you want, I'll draw up a letter, I'll invite
him to meet me.'"

Mazuz also writes, "A number of figures, about whom there is evidence that
they are close to Appel, worked for the Olmert [campaign] staff and in its
framework, both at headquarters and in fund-raising activity. Thus, for
example, Benny Tavin and Shlomi Oz - both of whom Appel describes as his
friends - took part in staff meetings and were described by the chief of
Olmert's campaign headquarters as important activists."

Mazuz goes on to sum up Olmert's version of events: "Olmert says that, in
general, his approach was to assist Israeli businessmen in ties with persons
from abroad ... It was clear to him that these business people have business
interests of their own in a visit, but since he had been looking for an
opportunity to strengthen ties with the mayor of Athens for some time,
because he was a figure with a central political status in Greece, with the
potential for leadership at the national level, he was delighted at the
opportunity to invite him and viewed this as an interest of the municipality
... Olmert says he does not remember any special help that he requested from
Appel in the elections for the Likud leadership in September 1999, and he
does not remember whether he received financial assistance from him."

Mazuz explained his decision not to place Olmert on trial as follows: "It is
not possible to prove - in the degree necessary for a criminal trial - that
activities carried out for Olmert's [campaign] headquarters were done
precisely at Appel's behest. Indeed, various activists who were close to
Appel took part in activities at Olmert's headquarters. However, because
these persons were involved in internal Likud politics for many years, it is
difficult to refute a claim that they acted on their own behalf or in the
name of others and not in the name of Appel." Mazuz also found that it would
be difficult to prove the "mental element" - that is, Olmert's awareness
that he had received a bribe. "It is impossible to prove the suspicion that
Olmert, who was at the top of the pyramid and was assisted by various aides,
knew what was going on below him in his bureau."

In 2003, after the story of the Greek island affair broke, followed by all
the factual details that appeared in the Mazuz report, Olmert filed a libel
suit against Mordechai Gilat, Yedioth Ahronoth's top investigative reporter.
Immediately after taking over as acting prime minister, after Sharon was
hospitalized with a massive stroke, Olmert withdrew the suit. "In the
circumstances that have arisen, I have neither the interest nor the time to
continue with the suit," he stated.

Another good friend of both Olmert and Shlomi Oz who is entangled in
criminal matters is the businessman Reuven Gavrieli. He was recently
arrested together with his brother Ezra (Shoni) Gavrieli, the father of
Likud MK Inbal Gavrieli, and with a police intelligence target, Meir
Abergil. The three are suspected of evading tax payments on illegal casinos
they set up in Israel. In October 2003, Haaretz reported that Olmert had
instructed his ministry (the Ministry of Industry and Trade) to assist
Gavrieli in connection with a mineral water project in the Republic of
Georgia. A spokesperson for the ministry stated in reaction, "Olmert will
continue to assist every Israeli businessman in every place in the world ...
That is his duty and the duty of the ministry."

The Georgia project was not the only time Olmert helped the Gavrieli family.
In November 2004, two reporters for Yedioth Ahronoth, Gidi Weitz and Ofer
Petersburg, published a story stating that Olmert, who at the time was the
minister in charge of the Israel Lands Administration (ILA), had instructed
the ILA's director general to try to reach a compromise with Haim Gavrieli,
another brother, concerning land he had seized for his own use. The
minister?s bureau stated in reaction, "The ILA and the responsible ministers
have always held meetings with various elements, including on issues that
are in legal proceedings."

Keepers of the seal
Together with the circle of prima facie criminals and former criminals,
another circle has also always existed around Olmert: a circle of the
country's top lawyers and accountants. In this circle a separation between
friendship, business and public activity was not always maintained.

The closest person to Olmert in this group is Uri Messer, who was his
partner in the law firm at the outset of his career. Messer, 55, has already
taken part in the most exclusive forums Olmert has convened since becoming
acting prime minister, which are the equivalent of Sharon's "ranch forum."
Messer is partner in the Jerusalem law office of Messer-Rivlin and is the
husband of the assistant attorney general for regulatory affairs, Davida
Lachman-Messer.

A spokesperson for Olmert's bureau stated that beyond a tie of friendship,
"Mr. Messer's office represented the acting prime minister in various
personal matters. In all these dealings, the acting prime minister paid the
usual fees." Olmert declined to elaborate on the amount of the fees.
Attorney Messer did not respond to questions from Haaretz.

Messer was responsible for two associations that were established prior to
the municipal elections in Jerusalem in 1993 and in 1998 in order to support
Olmert's candidacy. Both associations ran up huge deficits that ultimately,
in a procedure that raises various questions, were erased. Not long after
Olmert's election as mayor, in November 1993, Messer received, contrary to
standard practice, responsibility for realizing the municipality's assets on
behalf of the municipal company Moriah. Moriah, the Jerusalem Municipality's
development company, is in charge of the most significant construction
projects in the city. His appointment gave him access to inside information
about municipal plans, which is of great value in the construction industry.

When the appointment was uncovered by the Jerusalem weekly Kol Ha'ir, in
December 1994, the municipal spokesman stated, "The appointment was made by
the Moriah company, without any connection to Olmert." Both Messer and the
company's CEO say the same. Ten years have passed since then and the memory
of all those involved in the episode has apparently become feebler. This
week the spokesman of Moriah denied that attorney Messer had ever worked for
the company. Indeed, six months ago Messer himself told Kol Ha'ir, "I never
worked for Moriah." Who is telling the truth - attorney Messer of 1994 or of
2005? A spokesman for Olmert?s bureau stated, "The acting prime minister has
no knowledge about the employment of an attorney by Moriah."

Messer's law firm also did well when it acted against the municipality. In
2000, during Olmert's second term as mayor, Messer's firm received a hefty
fee for representing a sanitation company that sued the municipality for
millions of shekels. The company changed lawyers several times during the
legal battle, because none of them was able to reach a satisfactory
settlement with the municipality. It was only when Messer?s firm was hired
that the municipality agreed to a compromise, which enriched the company to
the tune of more than NIS 10 million - and Messer's firm by more than NIS 1
million.

In a conversation with Haaretz, attorney Elie Malka, who handled the case
for the municipality, stated that he was not invited to the discussions on
the lawsuit that were held in Olmert's office with the participation of
Ra'anan Dinur, the municipality's director general at the time, who is also
a member of Olmert's inner circle.

Don't you think it is odd that you were not invited to take part in the
discussions?

Malka: "I would not view it as odd. The dispute lasted quite a few years ...
The fact that that firm [Messer-Rivlin] might have an acquaintanceship or
something like that, I don't know ... The person who took part in the
meetings with Dinur was Rivlin, not Messer."

On the other hand, you did not attend all the meetings, did you?

"I was not in all the meetings, so I don't know who was there. I can't tell
you."

A retired judge who acted as an arbitrator between the sides recommended a
compromise, but many in the municipality thought it would be better to go to
trial, as the municipality stood a good chance of winning. A few municipal
council members complained that they were pressured to approve the agreement
with the company. "Two weeks ago," they wrote to the municipal controller,
"we were asked to approve a compromise agreement in the amount of NIS 10
million which the municipality will pay to Mr. Barazani [the owner of the
sanitation company]. From the first minute of the discussion, they cajoled
and threatened that 'because of the opposition' [the members of the
opposition on the municipal council] the municipality will have to pay more,
because Mr. Barazani will go to trial. It goes without saying that whole
files of documents are missing because they have 'disappeared' or have been
'eliminated' for mysterious reasons and under unclear circumstances."

Nissan Barazani, a company executive, declined to respond to questions on
the subject. A spokesman for Olmert's bureau stated, "Contrary to the
content of the question, the matter was deliberated in court. The [court]
referred the matter to arbitration by a retired judge and he decided on the
amount of the compensation. The acting prime minister had nothing to do with
the decision."

Messer is not the only Olmert acquaintance who was employed by authorities
that were subordinate to him. Olmert's accountant is Michael Barzilai. His
son, Udi, a former deputy commissioner of income tax, is on Kadima's list of
Knesset candidates. Barzilai's firm profited from Olmert's election as
mayor. For a 10-year period beginning in 1994, the other son, Boaz Barzilai
(who works in his father's firm), was the accountant of Gihon, the
municipality's water and sewage corporation, which was established during
Olmert's tenure and was under municipal supervision. Now that Olmert is no
longer mayor, Barzilai's firm also no longer works with Gihon. In a
conversation with Michael Barzilai, he declined to respond to questions on
the subject.

Olmert's bureau confirmed that Barzilai is Olmert's personal accountant. In
response to a question about Barzilai's work for Gihon, a bureau spokesman
stated, "As chairman of the General Assembly of the Gihon Corporation
[referring to Olmert], it is reasonable that the company's employment of the
[Barzilai] office was reported to the acting prime minister in his capacity
as mayor of the city at the time. This appointment was undoubtedly reviewed
in the Jerusalem Municipality and in the company in the usual way. Specific
questions on this subject should be put to the Gihon Corporation's director
general at the time, who dealt with appointments in the company."

Another friend who did not suffer from his ties with Olmert is attorney Eli
Zohar, the senior partner in the prestigious law firm of M. Zeligman.
Attorney Zohar is a close friend of Olmert and was his candidate, with the
support of former justice minister Yosef Lapid, for the post of attorney
general. From 2003 Zohar represented Olmert in his libel suit against
Mordechai Gilat in the Greek island affair. Zohar is also handling the
affairs of Olmert's younger brother, the Middle East expert Dr. Yossi
Olmert, who left Israel a year and a half ago after going bankrupt and
running up debts on the "gray market" (the debts were generated by his
unsuccessful run for the Likud Knesset list in the party's 1996 primaries).
In 1997 Zohar represented another of the Olmert brothers, Yermi Olmert, who
was then the head of the Givat Shmuel local council, in a petition that was
filed against him in the High Court of Justice. (Olmert also has a third
brother, Prof. Amram Olmert, a former minister-counselor on science and
agriculture in the Israeli embassy in China.)

Beginning in 2001, according to information that was made available to
Haaretz, the M. Zeligman law firm received more than NIS 1 million from the
Jerusalem Municipality to represent the municipality and prepare legal
opinions for it. It bears noting that the Jerusalem Municipality has a large
legal department that employs about 40 lawyers whose job it is to represent
the municipality and prepare legal opinions. The employment of an external
legal expert is supposed to be the exception to the rule, because of the
high cost involved and the lengthy bureaucracy entailed in getting
authorization for this. However, an external attorney can be hired in urgent
or unusual cases by means of a quick procedure or by obtaining retroactive
authorization. In nearly all the cases in which Zohar's firm was hired, the
quick procedure was invoked.

A few weeks ago, the municipal treasurer, Eli Zitok, asked the
municipality's legal adviser, Yossi Habilio, to explain the reasons for
hiring the M. Zeligman law firm. Attorney Zohar stated in response, "My work
was with the legal department and with the municipality director general and
it went on far beyond Olmert's tenure as mayor. The payment was not
commensurate with the amount of work that was invested." In other words,
attorney Zohar did the municipality a favor by representing it.

The Jerusalem Municipality did not respond to questions from Haaretz on the
subject.

The city and the rats

The major executive position to which Ehud Olmert was elected personally was
as mayor of Jerusalem. What stood out during his tenure was the
deterioration of the sanitary conditions in the city. In an article that
appeared in the Jerusalem weekly Kol Ha'ir two weeks ago, Yossi Barkan, an
exterminator who has worked in the city for 18 years, put it this way: "It
is a bit unpleasant to talk this way about the person who is now the acting
prime minister, but during the period of Teddy Kollek there simply were no
rats." (Kollek preceded Olmert as mayor of Jerusalem).

The negative migration balance in Jerusalem - more people leaving the city
than moving to it - that began in the early 1990s intensified during the
Olmert period. During his two terms as mayor, the city lost an average of
6,000 residents a year. Most of those who left are nonreligious and the
reasons they cited for leaving were the high cost of housing, employment
problems and, to a lesser degree, the character of the city.

One of the reasons for Jerusalem's inferior economic situation (it has been
Israel's poorest city for some years) is the city's employment structure.
Only 9 percent of the city's residents work in industry (less than half the
national average), compared with a high percentage employed in the public
service, administration and education. Yet, when Intel wanted to build a new
factory in Jerusalem at a cost of billions, Olmert yielded to pressure by
the residents of the ultra-Orthodox neighborhoods in the area where the
plant was to be built. The result: Intel built the plant in Kiryat Gat.

Olmert spent large chunks of his time as mayor overseas, mainly in the
United States. When he was asked about this in the municipal council, he
said he had gone abroad to raise funds. In any event, he explained, the
trips were not made at the municipality's expense. At the same time, Olmert
hardly ever explained who paid for his trips abroad.

In January 2000 he boarded the private plane of his friend, businessman
Motti Zisser, for a 24-hour trip to Hungary. It took Olmert more than two
months to explain to municipal council member Anat Hoffman what he had done
there: "The meeting was at the initiative of the prime minister of Hungary,
who wanted to meet me and discuss policy matters with me," he stated in
response to her question. That sounds impressive, especially in light of the
fact that according to the timetable of the visit Olmert was only invited to
a luncheon with the Hungarian prime minister, in which the millionaires from
the private plane, who do business in Hungary, also took part. "To avoid
slander and the malice, wickedness and unrestrained persecution of certain
elements such as yourself," Olmert told Hoffman, "I informed Mr. Zisser that
I would pay the costs entailed in my joining the flight, and I did so."

During Olmert's tenure as mayor, his advisers received inflated salaries.
Shula Zaken, Haggai Elias (the spokesman) and others were paid 50 percent
more than their predecessors during the Kollek period. The salaries were
reduced somewhat only after the intervention of the Finance Ministry's
director of wages.

In addition, political appointments abounded during Olmert's first term as
mayor. The municipal controller found that as of the middle of 1996, Olmert
was responsible for payments of NIS 6.2 million for political appointments
in his bureau and in various municipal departments. He was forced to fire
many of them when a recovery plan was implemented at the start of his second
term. "Even though the municipality had to eliminate jobs and reduce its
personnel," a report by the state comptroller on this subject stated, "its
activities did not produce [the desired] result, because it used the
'revolving door' system - when it eliminated jobs under the recovery plan it
also created other jobs."

During Olmert's tenure as mayor, a fictitious soccer academy was
established, which paid two of his supporters, former soccer stars Uri
Malmilian and Eli Ben Rimoj, NIS 340,000 for a few hours of work. In the
light of these and other cases, attempts were made during Olmert's first
term to deny the municipal controller, Uzi Sivan, access to documents he
needed to compile his reports.

In a conversation with Haaretz this week, Sivan summed up: "Integrity did
not exist there. When Olmert first took over as mayor, he thought it was
money that he could do with as he pleased, and half a million shekels went
on Uri Malmilian alone. And there was also another guy there who knows how
to kick a ball."

Did Olmert know - weren't such matters kept hidden from him?

"What do you mean, 'kept hidden from him'? He did it."

When Olmert took over as mayor, the municipal deficit stood at NIS 65
million, or 7 percent of the municipality's budget at the time. The
accumulated deficit at the end of his first term, in 1998, grew to NIS 501
million. In 2003 Olmert resigned as mayor and left behind a deficit of NIS
534 million, amounting to 19 percent of the budget.

Olmert's Jerusalem was a paradise for contractors and entrepreneurs.
Especially if they donated to Olmert. Thus, for example, Olmert worked for
the authorization of a construction project in the "valley of the gazelles"
(an area of the city in which gazelles roam free) that was promoted by
attorney Shraga Biran, one of his donors; supported a plan to elevate the
David Citadel Hotel, which is owned by contractor and donor Alfred Akirov,
even though the result would be to block the view of the Old City wall; and
pushed the Holyland project, in which monstrous residential towers blight
part of the city.

In an unprecedented move, the local Planning and Building Commission refused
to hear nearly 1,000 objections that were submitted against this
megalomaniacal project. "A monstrosity like this could only have been built
during his tenure," says Avraham Shaked, representative of the Greens on the
District Planning and Building Commission, who for years has been fighting
rearguard battles against projects promoted by Olmert.

A spokesman for Olmert's bureau stated, "Overall, the policy of the acting
prime minister during his period as mayor was to encourage high-rise
building in Jerusalem. This approach was coordinated with the municipality's
planning officials." The city engineer, Uri Sheetrit, who supported almost
every move by Olmert, is now on the Kadima Knesset list.

Tilting against the attorney general

Over the years Olmert adopted a sharply militant style against the media and
against law enforcement bodies. Instead of being in awe of them, he expected
them to be in awe of him. In an interview with the daily Maariv in September
1996, after the decision to try him in the case of the fictitious invoices,
he warned, "God be blessed, there is a gang of vampires in the Israeli media
and the day will come when I will name them one by one and also expose part
of the personal background of each of them." Asked how he had obtained the
'personal background' information, he snapped, "It exists" and did not
elaborate.

Olmert's period as minister of industry and trade, of communications, as
finance minister and as chairman of the ILA was also characterized by direct
or indirect aid to his circle of confidants. As industry and trade minister,
he informed the senior officials of the ministry's Investments Center -
through the media - that they were expected to authorize a grant to the
Central Bottling Company, controlled by Muzi Wertheim, so he could build
another factory in Ashkelon. Benjamin Netanyahu, who was then the finance
minister, objected to this, and his staff wanted to build the plant in
Kiryat Gat, to help reduce unemployment in the northern Negev. The attorney
general, Elyakim Rubinstein (now a Supreme Court justice), who was asked to
decide the issue, submitted an economic opinion. Olmert ordered his
officials to ignore the opinion and approve a grant of NIS 70 million.
"Rubinstein understands less about economics than an economics reporter,"
the minister said.

As chairman of the ILA, Olmert had to approve the 1996 settlement of
principles that was signed between the ILA and Salt Industries, owned by the
Dankner family. Under the agreement, Salt Industries is entitled to 40
percent of the building rights in rezoned land that the company owns in
Atlit and Eilat. The agreement was fiercely criticized in a report by the
state comptroller and in an opinion issued by the attorney general.
Rubinstein wrote to the ILA Council that the agreement of principles had
given Salt Industries far-reaching and excessive benefits, without a source
of authority and in a departure from orderly administration. Olmert sadi, in
response to the media: "It is not the place of the attorney general to teach
me what attitude to adopt toward the importance of state lands."

The current attorney general, Menachem Mazuz, has also felt the wrath of the
new regime. In October 2004, Olmert, writing in the name of democracy, sent
a letter to Mazuz asking him to reconsider the guidelines he had drawn up
against political appointments in the public service. Mazuz barred
politicians from appointing members of their party's central committee to
public-service posts. Olmert, who was then still a captive of the Likud
Central Committee, wrote, "Your guidelines are a harsh blow to the image of
a great many people, among them people from my party ... an honest and
devoted public ... The prohibition you imposed entails a thorough
undermining of democracy." A year and a half later, the author of the letter
would become a one-man 'arrangements committee' to draw up the Kadima
Knesset list.

This was not the only clash between the minister and the attorney general.
In November 2004, Olmert held a meeting between members of the Gavrieli
family and ILA personnel in the wake of a legal dispute between the two
sides. Mazuz launched an inquiry into the events and four months later
reprimanded Olmert, informing him that the meeting he held was contrary to
the attorney general's directive prohibiting ministers from dealing with
issues raised by members of their party's central committee. Olmert did not
take this lying down. "I have no intention of refraining from dealing with
professional matters that are related to the Israel Lands Administration,"
he stated at the time, adding that it was not Mazuz's job to scold
ministers. "Once and for all we have to set the record straight: this
country has an elected government and it is entrusted by the public with
managing the affairs of the state," Olmert asserted.

Olmert's bureau, this week: "The acting prime minister did not exert
pressure or grant personal benefits to people who donated to him in the past
as such. During the entire course of his public activity, the acting prime
minister has been meticulous in cooperating with the professional bodies and
has acted according to their recommendations."

The metamorphosis was complete: The former crusader against corruption, the
onetime ally of the police and the press became the equally aggressive
representative of the new underdogs - the politicians, the wealthy, the
suspected criminals. In the Maariv interview of September 1996, Olmert said,
"In quite a few cases, the principle laid down by Supreme Court President
[Aharon] Barak, the Buzaglo principle [the 'Buzaglo test' is supposed to
ensure that a public figure is dealt with by the authorities in the same way
an ordinary citizen would be], is today perhaps being applied in reverse. If
people once said that the same criteria that are applied to 'Buzaglo' are
not applied to public figures, today it is the opposite. Different
criteria - harsher and sometimes unreasonable - are applied to public
figures."

On December 4, 2005, shortly after Omri Sharon, the prime minister's son,
was convicted of illegal campaign fund-raising and other offenses, Olmert
commented after meeting with the chancellor of the exchequer in London:
"What did Omri Sharon do, after all? He didn't take bribes. Violations of
the election laws occur in the West, too. And with [Labor Party leader] Amir
Peretz, weren't there complaints about rigged elections? Not that I am
belittling this. A law is a law is a law."

Epilogue: Being there

A year ago, in March 2005, no one dreamed that Olmert would become prime
minister. A poll that month in Haaretz showed Olmert as the fourth most
popular Likud candidate for prime minister among the general public. First
was Ariel Sharon with 50 percent, followed by Netanyahu with 30 percent and
then Shaul Mofaz, the defense minister. Olmert had only a 13.3 percent
popularity rating, and even that was due to left-wing support. Among Likud
voters, his own turf at the time, his popularity rating was only 7.3
percent.

The disengagement, followed by the political big bang, changed the picture.
Olmert's insistence that he would remain acting prime minister and Shimon
Peres would be vice premier - in the unity government with Labor at the
time - turned out to be the most brilliant move of his political career.
Does anyone still remember that in the last primaries held in the Likud
Olmert finished in 33rd place?

The Kadima party was launched at the end of November 2005. On December 18,
Sharon was hospitalized for the first time with what was described as a
minor stroke. He was released from hospital after two days and asked to
return in two weeks for a heart procedure. In the meantime, Kadima decided
that Olmert would occupy the No. 2 slot on the party's Knesset list - the
rationale being that he is more experienced than the popular Tzipi Livni.

On the evening of January 4, while at his home on Sycamore Ranch in the
Negev, Sharon felt unwell. He was rushed to Hadassah Medical Center in
Jerusalem, anesthetized and operated on - and has yet to wake up. Olmert, in
an interview with Nissim Mishal on Channel 2, related that when he heard
that Sharon had been taken to Hadassah he left Charles and Andrea Bronfman
(who was since killed in a traffic accident in New York), with whom he was
having dinner, and returned home. By then Shin Bet security service
personnel and police forces were taking up positions on Kaf-Tet b'November
Street in Jerusalem, to secure the home of the person who within minutes
would become the acting prime minister. The phone rang. On the line were the
cabinet secretary, Yisrael Maimon, and Attorney General Mazuz. "The
conversation is being recorded," Olmert was told. "You are now prime
minister."