A U.S. businessman at the center of a bribery case against Prime Minister Ehud Olmert testified on Tuesday he gave the Israeli leader cash-stuffed envelopes but didn't expect any favors in return.
Police are investigating whether Olmert illicitly took up to $500,000 in cash from New York-based millionaire Morris Talansky before becoming prime minister in 2006.
Olmert says the funds were legal campaign contributions, but police suspect they were either illegal contributions or bribery.
In a Jerusalem court Tuesday, Talansky speculated that some of the money went to fund Olmert's fondness for fine hotels, first-class flights and luxury goods.
Talansky told the court that most of the money he turned over at meetings in New York and Jerusalem was to cover Olmert's political activities over a 15-year period. But he also said Olmert's assistant, Shula Zaken, would often ask for cash to cover unidentified personal expenses.
Talansky, 75, said there were no records of how that money was spent. "I only know that he loved expensive cigars. I know he loved pens, watches. I found it strange," Talansky told the court, then shrugged.
Tuesday's revelations were likely to further hurt the already unpopular Olmert's reputation. The investigation is the fifth that police have launched into Olmert's financial affairs since he took office, and there is widespread speculation that the savvy former attorney and Jerusalem mayor might not be able to weather the latest charges.
The white-haired Talansky, who is not a suspect in the case, appeared slightly nervous in the courtroom, which was packed with reporters. He took off his jacket and tie and drummed his fingers on a table.
Contributions left on chairs
During the questioning, Talansky said much of the money was raised in New York "parlor meetings," where Olmert would address American donors who would then leave contributions on their chairs.
Talansky said about $100,000 was given to Olmert. It was unclear how much of this was his own money, though he said at one point he used his personal credit card to pay a hotel bill.
The donations took place before and during Olmert's 10-year tenure as Jerusalem mayor, which ended in 2003, and his subsequent years as trade minister. Olmert became prime minister in early 2006.
Talansky repeatedly voiced his admiration for Olmert, who was a leading politician in the hardline Likud party during the period in question. In late 2005, Olmert bolted the Likud to help form the centrist Kadima Party, which he now leads. Talansky said he did not receive any favors in return.
"He was articulate, he was intelligent. I felt that he would be a leader that I would have hoped to be if I had the talent," Talansky said, adding that Olmert would warmly greet him during their meetings in Jerusalem.
"Whenever Shula told him I was here, no matter what, he would always come out and greet me. A hug, a big hug. He hugged me. I remember for my 70th birthday he sent me a very beautiful card. He invited me to his son's wedding."
"I had a very close relationship with him, but I wish to add at this time at the relationship of 15 years was purely of admiration," he added. "I never expected anything personally. I never had any personal benefits from this relationship whatsoever."
Talansky said Olmert preferred cash over checks for reasons connected to Likud fund-raising regulations. "I didn't really grasp it. I didn't really work out how the system works over all," he said.
Loans not repaid
He also said Olmert also asked for a number of loans. Talansky mentioned one loan of $25,000 to $30,000 for a trip to Italy and another loan for $15,000. He said he had asked Olmert to return the money as soon as possible. "Famous last words," Talansky said, explaining that he was never repaid.
Since Olmert has not been indicted, Tuesday's testimony was not part of a formal court proceeding against him. Instead, the court was taking Talansky's testimony because he resides in the U.S. and authorities are concerned he might not return to Israel to testify in the future.
Olmert, who was twice questioned by police in recent weeks, said earlier this month 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.
Israeli election law broadly prohibits political donations of more than a few hundred dollars.
Talansky, visiting family in Israel, had been ordered by the court to extend his stay and testify before returning to the United States. An Orthodox Jew, he said he regarded Olmert as a bridge-builder between secular and religious Jews.
Olmert, who has been holding talks with Palestinian President Mahmoud Abbas and has opened a negotiating track with Syria under Turkish auspices, has said he would resign if indicted.
State Prosecutor Moshe Lador told reporters in the courthouse it was too early to determine whether an indictment would be sought against Olmert.
"The case could progress in different directions. There is a possibility the case could be closed, and there is a possibility that another decision will be made in this case," Lador said.
Eli Zohar, an attorney for Olmert, told reporters in the courthouse that the prime minister's lawyers would have the opportunity to cross-examine Talansky.
Last week the Supreme Court rejected Olmert's appeal to prevent Talansky from giving preliminary testimony.
Olmert has said that his ex-law partner was responsible for overseeing the funds received for his election campaigns.
A police source, who declined to be named, said last week that Israeli investigators would travel to the United States in the coming weeks to continue the investigation.