Israel's Olmert faces growing corruption scandal

Israeli Premier Ehud Olmert's political future looked even bleaker Sunday as investigators in the corruption case against him turned their attention to his family amid suspicions they might have taken private trips abroad paid for with public funds, dpa reported.

Israeli media reported that police were considering summoning Olmert's four adult children and his wife Aliza for questioning over the matter.

The premier's children said a statement that "we were specifically told that the plane tickets given to us were a gift from our father and were privately financed by him," the online Ynet news website reported.

Israeli police questioned Olmert on Friday for a third time and said he was suspected of having for years allegedly submitted travel expenses for the same trip abroad to multiple public bodies, including the state, more than once and pocketing the "significant" surplus.

He allegedly put the extra money - estimated in media reports Sunday at 110,000 dollars - in a special bank account in his name and used it for private trips abroad made by his family and himself, according to the Justice Ministry and police.

He allegedly did so while travelling abroad as mayor of Jerusalem and as trade and industry minister over the past years.

Olmert, 62, on Saturday vehemently denied the allegations as "distorted" and "despicable," before flying off to Paris for the launch the Union for the Mediterranean.

Neewspapers throughout Israel on Sunday gave front-page coverage to the latest scandal, being referred to as "Olmerttours," while a columnist in the Haaretz daily stated simply that "Olmert is finished."

In its headline, the newspaper quoted a senior official in the attorney general's office as saying: "Olmert is up to his neck in trouble."

In his three years at the trade ministry, Olmert took 54 trips abroad, according to Haaretz, which published alleged copies of one of the invoices being studied by police.

His travel invoices were sent to the various bodies by Olmert's travel agent, which also managed his special bank account, the statement said.

Rachel Risby-Raz, Olmert's former travel coordinator at the Ministry of Industry, Trade and Labour defended the premier as "neither a thief nor a swindler," Ynet reported Sunday.

The new suspicions surfaced as part of an ongoing police probe into allegations that Olmert illegally accepted tens, and possibly hundreds, of thousands of dollars from a US businessman and fundraiser, Morris Talansky, over a period of 15 years, before being elected prime minister in early 2006.

They are based on documents and witness accounts.

In pre-trial testimony in a Jerusalem court in May, Talansky said he had given Olmert 150,000 dollars, much of it in cash in envelopes because he was asked to do so, between 1992 and 2005. He said he raised the money on behalf of Olmert, then a member of the hardline Likud party, for ideological reasons.

Olmert has admitted to receiving several envelopes, but with hundreds of dollars only. His lawyers and spokesmen have said they were legitimate reimbursements for food and accommodation expenses, paid for by his hosts when invited to speak at events in the United States.

Talansky has since turned against Olmert and become the key state witness in the case. He is due to be cross-examined by Olmert's lawyers on Thursday.

A month ago, Israel's attorney-general authorized a broadening of the police investigation, but did not announce this to avoid jeopardizing Olmert's questioning session on Friday.

Olmert's political future is growing increasingly uncertain. His largest coalition partner, the Labour Party, has forced him to agree to holding early leadership primaries in his own, centrist Kadima party, in mid-September.

His associates have accused Talanksy of belonging to hardline circles, hinting that the premier's ideological shift in favour of a two-state solution to the Israeli-Palestinian conflict, an Israeli withdrawal from the occupied territories and a possible division of Jerusalem, may be behind the rift.

Olmert has promised to resign if the police investigation materializes into an indictment against him.

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