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Latest update : 2008-05-28

A US witness told the Jerusalem District Court that he gave Israeli Prime Minister Ehud Olmert $150,000 "in envelopes" over a 15-year period. Olmert is under investigation over allegations he accepted bribes. (Report: J. Fanciulli and C. Westerheide)

JERUSALEM - A U.S. businessman at the centre of a bribery case against Prime Minister Ehud Olmert testified on Tuesday he gave the Israeli leader cash-stuffed envelopes including personal loans that were never repaid.


Morris Talansky told the Jerusalem District Court he had passed $150,000 to the veteran politician over a 15-year period, praising Olmert as "a man who could accomplish a great deal" for Israel and who deserved his support.


"I gave (Olmert) cash in envelopes," Talansky, a New York-based fundraiser, said in preliminary testimony requested by prosecutors.


Both Olmert and Talansky have denied any wrongdoing in the case that has raised questions about the prime minister's political surival at a time when he is talking peace with the Palestinians and pursuing indirect negotiations with Syria.


Olmert, 62, has said he would resign if indicted.


Even in a country where many people assume corruption in high places is rampant, the image that the prosecution painted of Olmert as a politician with a penchant for expensive cigars and a preference for cash over checks offered by an American Jewish businessman was extraordinary.


Olmert, who was twice questioned by police in recent weeks, has said he took cash from Talansky for his two successful campaigns for mayor of Jerusalem in 1993 and 1998, a failed bid to lead the right-wing Likud party in 1999 and a further internal Likud election in 2002.


A judicial source said the sums involved totalled hundreds of thousands of dollars.






Legal experts have said investigators want to examine whether the money was declared to authorities and if Olmert dispensed any favours in return. Israeli law broadly prohibits political donations of more than a few hundred dollars.


Talansky said he handed over sums, ranging from $5,000 to $15,000 at a time, in Israel or in hotel suites during visits Olmert made to New York before becoming prime minister.


"I asked him why I couldn't write a check and he said it's because of the way the money is channelled," Talansky said.


During one visit, to an upscale Washington hotel, Olmert asked Talansky to pick up a bill for more than $4,700 for a three-day stay, according to the testimony.


"He was the guest of my credit card," Talansky said, adding that Olmert told him, 'I can't use my card because it's maxed out'."


Asked if he received receipts for the money he said he gave Olmert -- a question that touched off laughter in the courtroom -- the 75-year-old Talansky replied that he had not.


He dismissively used the phrase "famous last words" to describe what he called Olmert's unfulfilled promise to pay him back for loans that he said included $25,000 for a family trip to Italy in 2004.


"I figured we don't need any notes from him. His word was gold. He was a friend, a very close friend. It was a loan."


Talansky said he "never expected anything personally" from Olmert in return and "never had any personal benefits from this relationship, whatsoever".


But he also said Olmert had offered to help him with his mini-bar business and put him in touch with two major players in the U.S. hotel market. Talansky said Olmert phoned and wrote them but nothing came of it.


Talansky, visiting family in Israel, had been ordered by the court to extend his stay and testify before returning to the United States. Olmert's attorneys said they planned to cross-examine him at length during his next trip to Israel in July.


Olmert has said that his ex-law partner was responsible for overseeing the funds received for his election campaigns. He and Olmert's former chief of staff have been questioned in the case.

Date created : 2008-05-27