Former PM Olmert convicted of fraud, breach of trust in retrial

Talansky affair graft case was reopened in wake of new testimony from his former aide; ex-premier to appeal decision

Ehud Olmert in Jerusalem  District Court on March 30,  2015 (photo credit: Gili Yohanan/POOL/Flash90)
Ehud Olmert in Jerusalem District Court on March 30, 2015 (photo credit: Gili Yohanan/POOL/Flash90)

The Jerusalem District Court on Monday convicted ex-prime minister Ehud Olmert on graft charges, two years after he was cleared in the same corruption case.

The verdict came half a year after the Supreme Court ordered a retrial of the so-called Talansky case, saying it would allow new testimony from Olmert’s former assistant Shula Zaken, including recordings of conversations between Olmert and Zaken, who provided the information last spring as part of a plea bargain.

Overturning its earlier decision Monday, the court unanimously found the former premier guilty of fraud, breach of trust, and aggravated fraud.

Olmert will appeal the decision to the Supreme Court, his lawyer said. A sentencing hearing was scheduled for May 5. The conviction carries a maximum jail term of five years.

Prosecutor Uri Korb indicated that the state would seek a jail term for this conviction; Olmert has already been sentenced to a six-year term for his role in the Holyland real estate scandal.

In 2012, the Jerusalem District Court acquitted Olmert on charges of fraud, tax evasion and falsifying corporate records in what became known as the Talansky and Rishon Tours affairs.

Morris Talansky testifies against former prime minister Ehud Olmert in the Holyland trial before Tel Aviv District Court. January 20 2013. (photo credit /FLASH90)
Morris Talansky testifies against former prime minister Ehud Olmert. (photo credit /FLASH90)

He was accused of accepting envelopes full of cash from American businessman and fundraiser Morris Talansky in exchange for favors.

The legal battle was focused on whether the funds were personal gifts or a political exchange.

In their verdict Monday, the judges wrote that in light of Zaken’s diaries and recordings, which they ruled were reliable, “we change our conclusion.”

Judge Rivka Friedman-Feldman, one of the three judges on the panel, insisted that even without Zaken’s testimony, there had been sufficient evidence to convict Olmert for these crimes in the original trial.

Yet the audio recordings by Zaken buttressed the allegation that Olmert had accepted the “cash envelopes” from Talansky while mayor of Jerusalem, and failed to report the bank account in which the funds were held to the proper authorities. The court found that Olmert made personal use of the money, including paying tens of thousands of dollars to Zaken.

“There were no cash-filled envelopes,” Olmert had exulted on the day of his original acquittal. “The court has made this utterly clear.”

“Mr. Olmert did receive cash-filled envelopes,” said prosecutor Korb on Monday. He called the verdict the culmination of a Sisyphean struggle to thwart the corruption of power. While the process had taken a long time, he said, “justice was finally done.”

State prosecutor Uri Korb seen in the District Court in Jerusalem. (Photo credit: Gily Yohanan/POOL/FLASH90)
State prosecutor Uri Korb seen in the District Court in Jerusalem. (Photo credit: Gily Yohanan/POOL/FLASH90)

Olmert’s lawyers said they were “upset and disappointed with the verdict. The decision today was reached despite the blatant lies of Shula Zaken in court, and despite that the defense team clearly proved in the hearings that Zaken edited, deleted, and worked on the tapes in a manipulative way, and that the tapes are not reliable, to say the least,” a statement from Olmert’s legal team read.

Last May, Olmert was sentenced to six years in prison 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.

While beating most charges in 2012, Olmert was found guilty on a lesser charge of breach of trust in what was known as the Investment Center case, in which he was found to have granted personal favors to attorney Uri Messer when he served as trade minister.

Olmert was also cleared on accusations of paying for family vacations by double billing Jewish organizations through the Rishon Tours travel agency.

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.

State Attorney Shai Nitzan said Monday that the latest conviction demolished the allegation that Olmert and his supporters had leveled against the state prosecution hierarchy, namely that it had illegitimately forced the ouster of a democratically elected prime minister. “A country that can convict a former prime minister is a country to be proud of,” Nitzan said.

Zaken was convicted on two counts of fraudulently obtaining benefits and breach of trust in the Rishon Tours case. In the Holyland case, a judge accepted her plea bargain and sentenced her to 11 months in prison for accepting bribes.

At the end of the Holyland hearings, she came forward with the recordings in exchange for a lighter sentence. The recordings also included Olmert offering Zaken hush money and evidence of tampering with the case, prosecutors said.

JTA contributed to this report.

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