|
Comment on this article |
View comments |
Email this Article
|
|
News :: Israel / Palestine |
|
Sharon Bribery Scandal Getting Worse |
Current rating: 0 |
by haaretz via gehrig
(No verified email address) |
07 Jan 2003
|
|
"According to the allegations, Ariel Sharon received $1.5 million from Cyril Kern, a South African citizen, to serve as collateral for a loan his sons Omri and Gilad took out to pay back a company from which Sharon received illegal campaign contributions during his primaries campaign for the Likud leadership." |
Tuesday, January 07, 2003
PM aides admit Sharon got $1.5m from S. African businessman
By Baruch Kra, Ha'aretz Correspondent, and Ha'aretz Service
Following allegations of financial improprieties by Prime Minister Ariel Sharon and his two sons, which were reported in Ha'aretz, advisers to Sharon conceded Tuesday that the prime minister had received $1.5 million from a South African businessman, but denied any connection to criminal activity.
According to the allegations, Ariel Sharon received $1.5 million from Cyril Kern, a South African citizen, to serve as collateral for a loan his sons Omri and Gilad took out to pay back a company from which Sharon received illegal campaign contributions during his primaries campaign for the Likud leadership.
Speaking at a press conference in Tel Aviv convened in response to the allegations, Ariel Sharon's political adviser, Eyal Arad, told reporters that "it is not by chance that there are leaks, lies and disinformation designed to bring down the prime minister and his government."
Arad denied that the loan from Kern was a bribe, and said that it was a lawful loan that was repaid with interest last month.
Arad also confirmed that Sharon has ordered Attorney General Elyakim Rubinstein to root out the source of allegations.
The State Attorney's office has asked the South African Justice Ministry for help in its investigation of how and why Sharon received the money from Kern.
According to the online edition of Mail and Guardian, a South African newspaper, South African Justice representative Paul Setsetse confirmed that the ministry was aware of the request made by the Attorney General's office for Justice Minister Penuell Maduna to assist in the investigation.
The paper quoted Setsetse as saying that, "The documents were sent to us via [the department of] Foreign Affairs but they are still in the diplomatic bag. They will land on the minister's desk in the next few days and he will consider the written request; we will decide how to respond."
In a conversation with Ha'aretz on Tuesday morning, Kern said that he was "not involved in Israeli politics, and I do not want to be." Aides to the prime minister announced that they would be holding a press conference Tuesday afternoon to address the latest charges.
Labor Party Chairman Amram Mitzna on Tuesday called on Sharon to resign or present his own account of the events in question. "If Sharon decides to keep quiet he will lose his legitimacy and be unworthy of leading Israel in its hour of crisis," he said.
The head of Labor's election team, MK Ofir Pines-Paz, submitted an official request to the police commissioner and head of the police investigation branch for Sharon to be interviewed on the matter.
The state's written request implies that Sharon and his son Gilad deliberately deceived the State Comptroller and the police when they were questioned about how Sharon intended to repay the money, as ordered by the State Comptroller.
Army Radio reported Tuesday morning, however, that sources in the Likud said they have in their possession a document proving that he was able to secure a loan using his Negev property as collateral. The sources also rebutted charges of wrongdoing by Sharon as "journalistic nonsense."
Shell companies
In October 2001, the State Comptroller issued a report on shell companies that allegedly financed Sharon's campaign for the party leadership in 1999. The suspicions against Sharon were that he violated the party financing law, which is not a criminal offense.
However, Ha'aretz has learned that other suspicions, far more serious, have been raised about Sharon and his sons: the three are suspected of allegedly receiving bribes, fraud and breach of trust, as well as deceiving the State Comptroller and police. The Sharon family has not yet been questioned about the new suspicions.
The origins of the affair are in the campaign Sharon ran against Foreign Minister Benjamin Netanyahu for the Likud leadership in May 1999. State Comptroller Justice Eliezer Goldberg issued a report in October 2001 covering all the election campaigns of the year, and revealed that payments to various professionals who worked for Sharon's campaign were channeled through shell companies, including a company called Annex Research, established before the Sharon campaign by Sharon's attorney - and now his bureau chief - Dov Weisglass.
Sharon was instructed by the State Comptroller to repay NIS 4.7 million to Annex, out of a total of NIS 5.9 million that the company paid to Sharon campaign professionals. According to the letter sent to the South African Justice Ministry, a few days after the Goldberg report was issued, on October 4, 2001, Sharon handed over a first check of NIS 500,000 to the company. Immediately after that, says the document, Gilad and Omri Sharon, the prime minister's sons, began seeking the rest of the sum.
To that end, Gilad Sharon went to the Leumi Bank branch in Sderot, where the family accounts are kept, and on October 22 asked for a NIS 4.2 million loan, the remainder of what his father was supposed to pay back to Annex Research. In exchange for the loan, it was agreed that Gilad would mortgage the family-owned Sycamore Ranch. The loan was granted, and the next day, the prime minister handed over NIS 4.2 million to Annex research.
But when the bank began processing the mortgage application, it discovered that it is impossible to mortgage the ranch because it is leased property owned by the Israel Lands Administration. The bank demanded an alternative arrangement to the mortgage, or the money back, so the Sharon family had to find another solution - and found it in South Africa.
A police investigation learned that Kern transferred $1.49 million to Gilad and Omri Sharon, on January 15, 2002, from a bank account in Austria, through the JP Morgan Bank in New York, and into the Sharon brothers' account in a Discount Bank branch on Tel Aviv's Rothschild Boulevard.
With that money in hand, the Sharon brothers could take another loan to pay back the one taken from the Sderot branch of Leumi. The Kern money served as collateral for a NIS 4.2 million loan the brothers took on April 30, 2002, from Discount Bank in Tel Aviv. That same day, the money was transferred from the Discount branch in Tel Aviv to the Sderot branch of the Leumi bank and the original loan was repaid. The Sharon family's loan from the Discount Bank is due by April 30, 2003.
While all this was going on, the police were investigating the shell companies, and eight days before the sons took the second loan, Prime Minister Sharon was questioned by national fraud squad police at his official residence in Jerusalem. He was asked, among other things, if he repaid the money to Annex Research, as ordered by the State Comptroller, and how he did so. Sharon is now suspected of lying to the investigators when he said that he took a loan from the Leumi bank branch in Sderot and in exchange mortgaged the Sycamore Ranch, hiding from the police the information about the money his sons received from Kern.
The document sent by the Israeli Justice Ministry to the South African Justice Ministry includes suspicions the prime minister was not fully forthcoming during the questioning that took place on April 22 at his residence.
"On April 22, it was already known to all involved that it was impossible to mortgage the ranch in exchange for the loan," says the letter, "therefore, the ranch could not be mortgaged to pay back the hundreds of thousands of dollars borrowed from the Sderot bank. Despite this, when Sharon was asked by the police how he organized the large payment to Annex, he replied that the payment was made possible as a result of mortgaging the ranch. Mr. Kern was not mentioned, nor was the money that was transferred or loaned by him."
In response to various questions, Sharon referred the police investigators to his son Omri. For example, when asked about Annex's sources of money, Sharon replied: "It's financial sources? I never dealt with those financial issues. I think there is one person who might know, and that's Omri." When his interrogators argued that Omri had chosen to remain silent, Sharon responded: "Look, Omri's a big boy; he needs to decide by himself."
The letter to the South African Justice Ministry also describes suspicious activity by the other son, Gilad. After paying back the Sderot loan, Gilad was asked to sign a statement clarifying the source of the money paid to cover the loan, as required by the money laundering law. "It must be noted," says the letter to the South African Justice Ministry, "that Gilad Sharon tried to avoid signing the document in the bank, according to which he received the money from a lender named Cyril Kern. In effect, Gilad only signed the declaration after the Israeli police began its investigation and began asking questions at the aforementioned banks (Leumi in Sderot and Discount in Tel Aviv - B.K.)." Indeed, the signature on the declaration regarding the source of the money came only four months after the money was paid back.
In its letter to the South African Justice Ministry, the State Attorney asks the South African authorities to question Kern, since the police and prosecution in Israel have no information about him - or even proof he exists. The state attorneys make clear in their letter to South Africa that the suspicions are that the financial connection between Sharon and Kern are illegal, and that Sharon is suspected of receiving bribes, fraud and breach of trust. "The purpose and circumstances of the `loan' (quotation marks in the original - B.K.) by Mr. Kern must be clarified by an Israeli police investigation," says the letter.
Ha'aretz contacted a man by the name of Cyril Kern in South Africa, who confirmed that he has a personal connection with Sharon. Asked by Ha'aretz about the loan, the man responded "I don't know what you're talking about. I'm afraid that too many stories are coming up in Israel right now." Are you a businessman? he was asked. "I am very sorry, I am an honest citizen and I am not interested in continuing this conversation," he answered.
---
@%<
|
See also:
http://www.haaretzdaily.com
|
Comments
|
Re: Sharon Bribery Scandal Getting Worse |
by haaretz via gehrig
(No verified email address) |
Current rating: 0
08 Jan 2003
|
Wednesday, January 08, 2003
Likud party fears losing power over $1.5 million loan scandal
By Yossi Verter
For the first time since the Knesset disbanded late last year and the
election campaign began, senior Likud politicians are getting worried
about losing power on January 28.
Various people in the Likud, including ministers, last night said the
Ha'aretz report about loans the Sharon family took to pay back
illegal campaign contributions could become a new snowball that
could fatally roll over the Likud, stripping it of more votes.
There is fear that in the coming three weeks the police will be
summoning senior Likud officials, including ministers and Omri
Sharon, to answer questions about the internal elections scandal.
The corruption allegations could fill headlines all the way to election
day.
"Sharon owes it to himself to stand before the public and answer all
questions," said a senior source in the Likud who is not among
Sharon's opponents. "On the one hand, the answers the Sharon
family is giving to the questions is satisfactory - but they also raise
concern that maybe the same millionaire was behind the original
funds that were channeled to Sharon in 1999 through Annex
Research."
Last night sources close to Sharon were explicitly accusing
"elements" in the Justice Ministry and police for "a deliberate
attempt to bring down Sharon" by leaking the document sent to the
South African Justice Ministry about a loan provided by South African
businessman Cyril Kern.
"The Justice Ministry doesn't want Sharon, just like it didn't want
Netanyahu when he was prime minister," said the sources. And
meanwhile, Likud sources said Netanyahu is the winner so far from
the latest Sharon imbroglio. |
|
