By Israeli standards, Acting Prime Minister Ehud Olmert is considered to be a millionaire, even though he never publicly reported the extent of his financial and real estate assets.
He will probably take care to do so from now on, in ongoing reporting to the State Comptroller, to draw away from himself the flames of public criticism that burn around him.
The law requires government ministers who hold assets and bank accounts abroad to include them in their reports; their declarations have the standing of a deposition under oath.
After Olmert’s election in the 1970s, he declared, with pathos that could have an effect on simple citizens who did not know him well: “I was elected to the Knesset to fill a certain position, and to act, inter alia, to correct the current corruptions in Israeli society. I come to reveal serious phenomena and to arouse public opinion for proper treatment, to motivate the executive authority, and adapt priorities to the real needs of the society.”
Dripping with honey, really. In actuality, however, Olmert has acted throughout all his years of parliamentary activity to make money. A lot of money, and quickly. Without being accountable to anyone. From time to time he throws a bone to his voting public. During the period in which Members of Knesset could act as lawyers, several lawyer-Members of Knesset were not squeamish about taking advantage of their parliamentary activity to do more for themselves and their families than for the public that sent them to the Knesset.
Olmert led the pack. He gained a reputation as a lawyer acting as an intermediary, with connections to all government officials, with the ability to get things done, and with the singular expertise to find shortcuts to almost all the government ministries and the various state authorities. Likud MK Michael Eitan relates: “Olmert did not participate in many sessions of the Knesset and its committees. He spent most of his time in legal activity on behalf of his clients. He told me straight out that he wants to make money for himself, and it transpires that he does this very nicely. Today Olmert is a serious millionaire.” Already in that period people identified Olmert as having unbridled behavioral traits, that were expressed in his way of life, his frequent trips abroad, and his obsessive connecting himself to the very wealthy both in Israel and abroad – without his ever being bothered by the question of whether his new friends had a criminal past, and how they amassed their wealth.
One of the outstanding examples of this was his relationship with the questionable American millionaire Mark Rich, who fled from the US to Switzerland to escape the American tax authorities, who wanted to put him on trial for serious crimes. Olmert asked President Bill Clinton to arrange a “pardon” that would enable Rich to return to the US.
One deal followed another, Olmert’s circle of international multimillionaires gradually expanded to other countries, as well, and included the wealthy from Europe also. Olmert was the lawyer of, among others, the Russian multimillionaire Shabtai Kalmanovich who lived in Israel and became close to several central political figures, and who was later charged with espionage against Israel. In any event, Olmert was one of the first politicians to identify the oligarchs who arrived in Israel over the course of time, without troubling himself to check their moral standing.
It is not coincidental that the billionaire Arkadi Gaidamak is only one of his friends among the oligarchs; nor is it by chance that Olmert persuaded him to buy the Jerusalem Beitar soccer team. We will return to this topic in the continuation of the series. At the beginning of his career that combined being a lawyer and an MK, Olmert discovered a sophisticated method of acquiring clients among businessmen in Israel and foreign investors who inquired about buying into various projects in Israel.
At the time, when I was an investigative reporter for Yedioth Ahronoth, I uncovered the method when I happened to receive an instructive document that was written on the stationery of “Olmert, Advocate,” alongside which were the additional words: “Member of Knesset.” We need not emphasize the significance of the double title as a “sales gimmick.”
In the letter, that was addressed to potential investors in Israel and abroad, Olmert proposed that they invest in the establishment of a new private medical center in Jerusalem (Medical Center). It would not be difficult to guess why the lawyer-Knesset Member Olmert was busy in the medical ralm. Eliezer Shustak, one of the heads of his party at the time, was Health Minister. The door to his office was open to Olmert when the latter came in the service of his clients and gleaned information about current projects (when Olmert himself was Health Minister, he was involved in another affair that we will discuss at length in another chapter of this series).
I had contacted Olmert then to receive his response, in order to examine the question of his use of his political standing on his office stationary for his private dealings. Olmert said to me: “This was a mistake by a secretary.” I told him that I intended to publish this response, and he said to me: “It’s not worthwhile for you to start with me, I can harm your standing in the newspaper.”
Olmert tried to prevent the publication, as he did over the course of years about many other items in the media. After he was not successful in this, he found a foolproof way to punish the newspaper: exclusive political materials were leaked to Maariv, the competing newspaper. Ever since then Olmert has been waiting to catch me. I continued to take an interest in his open and concealed activity, but I estimated that my victory was short-lived. The higher that Olmert ascended politically, becoming, among other positions, a member of the Knesset Defense and Foreign Affairs Committee, a member of the Secret Services Subcommittee, and very close to Prime Minister Yitzchak Shamir, with a large quantity of scoops at his disposal, the media’s dependence upon him grew, and it was clear that, sooner or later, I would lose the battle against the interests of the newspaper.
Olmert did not succeed in having me removed from the newspaper, but I felt that my professional freedom of activity was restricted. Nor was I surprised when one day Tami Mozes-Borowitz, a shareholder in the newspaper, asked me: “What do you have against Olmert, maybe just leave him alone.” After the Knesset decided to forbid its members from concurrently practicing law, Olmert lowered his profile, and he no longer appeared in the Knesset accompanied by his clients. Formally, he resigned from the law office in which he was a partner, but there were signs that the legal bug had not left Olmert. In the Hakhsharat Hayishuv (Palestine Land Development Corporation) sale that is detailed below, in which the corporation was purchased by the businessman Yaakov Nimrodi, Olmert took his fee when he was already a government minister. This deal clearly shows how Olmert took advantage of his public positions to become rich by being an intermediary for the sale of a public corporation – Hakhsharat Hayishuv, that was jointly owned by the Jewish Agency and Bank Leumi.
Hakhsharat Hayishuv is a corporation rich in properties, residential and commercial buildings, plots of land, hotels, and holdings throughout Israel. in order to attain control of this attractive corporation, it was necessary to purchase a bloc of founder’s shares that was held by the Jewish Agency’s Companies Authority and Bank Leumi’s holdings in the corporation. Nimrodi relates: “I was asked to participate in the tender for purchasing control of the corporation, together with two partners. But I preferred to go to the tender alone.
After I arrived in Israel, Olmert contacted me and told me that he could take care of the transaction. I gave him power of attorney to act in my name. At the last minute we submitted the tender to Bank Leumi, and we won.” The purchase of the shares held by Bank Leumi was not sufficient to attain control of the corporation, for which the shares held by the Jewish Agency would have to be bought. A number of trenchant questions arose concerning this purchase. Olmert received $250,000 from Nimrodi for obtaining the Jewish Agency’s shares.
After the acquisition, Olmert arranged for Nimrodi to meet the Israeli international businessman Yossi Brender, who purchased a portion of the Hakhsharat Hayishuv shares for a certain period of time and entered as a partner. During the course of the transaction, Olmert traveled for the who-knows-how-many time on behalf of Israel Bonds, on a speaking and fund-raising tour. As always, Olmert took advantage of the trip to search for investors and deals. Olmert, who was still a Knesset member, demanded that Nimrodi give him additional hundreds of thousands of dollars as his fee for being the go-between with Brender. Nimrodi refused. In the end, they agreed that the Chairman of the board of Discount Bank at the time, Yossi Ciechanover, would be a mediator, and he allocated to Olmert an additional $200,000 (incidentally, the Discount Bank, like other public and financial bodies, had in the past purchased paintings by the wife, Aliza Olmert, and this was not deemed questionable).
The rest of the go-between money to Olmert was paid in 1989, when Olmert was already serving as Health Minister. The payment was made through Adv. Uriel Messer; we will return to him below.
One of the classic stories is the joint exercise that Olmert pulled off together with the former Knesset member Avraham Shapira, when the latter served as Chairman of the Knesset Finance Committee, in order to approve government aid in the amount of six million shekalim to the Jerusalem contractor Matityahu Lifshitz, who was among Olmert’s close friends.
Although Lifshitz’s construction company did not appear in the list of construction companies in distress who were eligible for aid, this didn’t stop Olmert from pulling off a joint exercise with public money together with Shapira. Olmert “happened” to be present at a session of the committee, and warmly recommended granting the aid to Lifshitz. Shapira helped, knowing that Olmert would reward him. You help me, and I’ll help you.
When Olmert was later asked what he was doing in the committee session, he replied: “By chance I happened to pass by there.”
It was later learned that Olmert purchased an expensive house from Lifshitz on Khaf-Tet Benovember Street, which he sold in January 2004 for $2,700,000 to the billionaire Daniel Abrams, by means of the attorney Yaakov Neeman (this controversial transaction is currently being examined by the State Comptroller). Olmert claimed that the top floor of the house in which special effort was invested is not his, and is occupied by the daughter of Adv. Yaakov Neeman, whose ties with Olmert were always very close. Neeman repaid him on another occasion when he put his office in the capital at the disposal of Olmert’s campaign headquarters, and even more so when he testified on Olmert’s behalf in the Likud tax receipts trial. The price that Olmert paid Lifshitz for the renovated house has not been revealed to the present, and it is unclear whether the special price constitutes an additional bonus on top of the fee that Olmert collected for mobilizing state funds for his contractor. The amount that Olmert received from the NIS 6,000,000 remains a professional confidence between the lawyer and his client, and it almost certainly was not disclosed to the members of the Finance Committee who voted to allot state funds to Lifshitz. It has been claimed that Olmert did not perform any service without recompense. Olmert claims that he did not receive any discount.
The contractor Lifshitz responded at the time, in response to my question: “I cannot tell you the exact sum that Olmert paid me, but he received a very fine discount from me.” Olmert told me at the time that he had not received any discount from Lifshitz.
It’s not hard for me to decide which of the two to believe.