Comptroller accuses PM of 'corruption' in new report
DAN IZENBERG, THE JERUSALEM POST Apr. 25, 2007
www.jpost.com/servlet/Satellite?cid=1177509604269&pagename=JPost%2FJPArticle%2FShowFull

State Comptroller Micha Lindenstrauss on Wednesday informed the
attorney-general that Prime Minister Ehud Olmert may have been guilty of
criminal behavior by taking an active part in an Investment Center decision
to provide a $10 million grant to a company represented by his close friend,
former partner and personal lawyer, Uriel Messer.

The letter to Attorney-General Menahem Mazuz came in the wake of a 30-page
report released on the same day entitled "Conflict of Interests on the Part
of the Minister of Commerce and Industry." The decision to provide the grant
to the company represented by Messer was made under the previous government,
when Olmert served as minister of commerce and industry.

According to Lindenstrauss, Silicat Industries Inc. applied to the
Investment Center in October 2001 for status as an "approved industry,"
which would enable it to obtain government money to build a
Silicat-producing factory in Dimona, at a total investment cost of $48
million.

The file was not discussed until the second half of 2003, when Olmert was
already serving as Minister of Commerce and Industry under Prime Minister
Ariel Sharon. Within less than six months, the Investment Center granted the
approval.
During the negotiations with the Investment Center, Messer represented the
company. On July 10, 2003, Olmert hosted a meeting on the company's
application in his office.

"Olmert should not have participated in the meeting or intervened in the
discussion because of the conflict of interests he was involved in," wrote
Lindenstrauss. "This conflict of interests stemmed from the fact that
between the company's representative, who asked for benefits from the
Investment Center which the minister was in charge of, and Olmert, there had
previously been economic ties and there continued to be ties of friendship
and a lawyer-client relationship."

The following month, Olmert visited Dimona. During the visit, he reduced the
amount of the guarantee the company was to deposit with the government from
$15 to $5 million dollars. Olmert also knocked $1 million after the $7.5
million sum the company would have had to pay for infrastructure
development, and then reduced it by another $4 million in return for the
company's undertaking to develop the land itself.

Lindenstrauss wrote that Olmert's decision to reduce the guarantee by $10
million was "a substantial benefit to a particular entrepreneur, which
reduced the guarantees the investors were supposed to provide, thereby
increasing the government's risk in investing in the company."

The Investment Center granted the status of an "approved industry" without
first seeing to it that the company fulfilled all the conditions that the
professional echelon had laid down. Lindenstrauss also charged that Olmert
and his aides, Ovad Yehezkel and Doron Shofen, intervened even after the
Investment Center granted the company approved status.

In 2004, when the company lodged an appeal, the appeal was heard by the
Investment Center, which Olmert controlled, rather than a regular appeals
committee. Before the appeal, the Investment Center's internal controller
prepared an opinion stating that the company had not fulfilled all of the
conditions of its approval and that the technological and marketing risks
involved in the project were unreasonably high. It recommended that the
center should not provide the grant until the company had carried out a
pilot project.

"Given the conflict of interests in which Olmert was involved, one should
regard with special gravity the intervention of the minister and his aides
in specific actions which were under the responsibility and authority of
professionals in the Investment Center and the ministry," wrote
Lindenstrauss. "Olmert's connections with the representative of the
entrepreneur, Attorney Uriel Messer, his decisive involvement in various
matters connected to the advancement of the project despite the fact that he
was involved in a conflict of interests, all these arouse suspicions of
corruption."