Olmert Lawyers Question Key Witness in Corruption Case

Lawyers representing the Israeli prime minister, Ehud Olmert, today began cross-examining a key witness in a corruption investigation that could end his political career.

Moshe Talansky, a US businessman, had accused Olmert of accepting envelopes containing hundreds of thousands of dollars during his tenure as Jerusalem mayor and as a cabinet minister before he was elected prime minister in 2006.

The money in what is known as the cash envelopes affair went on expensive cigars, first-class travel and luxury hotels, Talansky said. His cross-examination – seen in Israel as perhaps Olmert's last chance of political survival - is expected to take five days.

Police suspect the money was meant as bribes — although Talansky insisted he never got anything in return — or illegal campaign financing. Olmert has denied any wrongdoing and said he will resign if he is indicted.

"Today the cracks in the police and state prosecutors allegations will be revealed," said Amir Dan, a public relations consultant Olmert hired privately to defend him against corruption allegations.

"The Israeli public will discover that they are trying to take down a serving prime minister based on unfounded charges," Dan told Israel Army Radio.

Talansky's testimony in May seriously damaged Olmert's credibility among Israelis and the resulting uproar forced the prime minister's Kadima party to set new leadership elections, to be held by September 25.

Olmert's premature departure from office could seriously hamper or delay his government's efforts to conclude a peace deal with the Palestinians and resume full negotiations with Syria.

Olmert is reportedly still considering running in the Kadima primaries, hoping that his lawyers will be able to discredit Talansky, a 75-year-old businessman who lives on New York's Long Island.

In the latest twist in the case, police last week accused Olmert of pocketing thousands of dollars by deceiving various sources — including organizations for Holocaust survivors — into paying for trips abroad.

The widening of the investigation was announced as Olmert was questioned for the third time. He called the most recent accusations "distorted" and charged the police and state prosecutors with trying to bring him down.

Olmert said he felt insulted because he said he had worked hard for the organizations named in the allegations, which included the Yad Vashem Holocaust memorial and the Nazi watchdog Simon Wiesenthal Center.

Olmert's allies say he has survived past crises, coming through four previous corruption cases as well as the war in Lebanon two years ago in which he was heavily criticized.

A legal analyst, Moshe Negbi, said he doubts attempts to undermine Talansky would help restore Olmert's standing. "It's not necessarily true that throwing mud at Talansky, even if some of it sticks, will clean Olmert," Negbi told Israel Radio.

Olmert has not been helped by open rifts in his defence team. After several days of verbal sparring between Olmert's attorneys, Professor Ron Shapira announced his resignation from the case over differences on the defence's strategy.

On Sunday, the Israeli newspaper Yedioth Ahronoth reported that Shapira had suggested putting together a plea bargain with the state prosecutor's office. Shapira expressed concern that if an indictment is filed against Olmert he would receive a prison sentence.