Court hears former Olmert aide in graft retrial

Former prime minister Ehud Olmert’s top aide testified against him in the Jerusalem district court on Monday, in a case that had seen him acquitted in 2012.

The court heard testimony from Shula Zaken, including recordings of conversations between Olmert and Zaken, in what has become known at the Talansky affair, named after American businessman and fundraiser Morris Talansky, a former close associate of Olmert. The former prime minister is facing charges of fraud, tax evasion and falsifying corporate records.

The prosecution claims that the new material details the system by which donor money was transferred to Olmert, often for personal use.

On Thursday, Zaken is set to face the defense legal team on cross-examination.

The court also ordered Olmert’s defense team to return state evidence mistakenly delivered to it.

Olmert’s lawyers contended last Friday that there was no basis for the prosecution to demand the return of a CD containing some 3,000 emails.

This is the second time state prosecutors have mistakenly sent Olmert’s team evidence and requested its return, according to the defense.

The Supreme Court ordered the retrial on the Talansky and Rishon Tours affairs in August, saying it would allow new testimony from Zaken who provided the information last spring as part of a plea bargain. Zaken is serving out an 11-month sentence handed down to her in May.

Olmert was accused of paying for family vacations by double billing Jewish organizations through the Rishon Tours travel agency, accepting envelopes full of cash from Talansky, and granting personal favors to attorney Uri Messer when he served as trade minister in the Investment Center case.

The charges were filed after he became prime minister in 2006, but covered his time as mayor of Jerusalem and later as a government minister. He officially resigned as prime minister in September 2008 after police investigators recommended that he be indicted.

In May, Olmert was sentenced in May to six years in prison, a two-year suspended term, and a fine of NIS 1 million ($289,000) for accepting bribes in the real estate scam known as the “Holyland affair” and ordered to report to prison on September 1, but the prison date was suspended pending his appeal.

The Holyland affair is considered one of the worst corruption scandals in the country’s history. At the center of the case was the Holyland housing development, a hulking hilltop project that Jerusalem residents long suspected was tainted by corruption.

The case broke in 2010 after Shmuel Dachner, a businessman who was involved in the project, turned state’s witness. Dachner died from an illness in 2013, in the midst of the trial and before Olmert’s attorneys had completed their cross-examination of him.

JTA contributed to this report.