THE MONSTER ON THE HILL

Olmert aide arrested in serious corruption affair

'One of the most serious affairs in State's history' said to involve tens of millions of shekels in bribes in exchange for advancing real estate projects. Five people arrested, including Attorney Uri Messer, former Jerusalem city engineer and businesspeople. Final decision on affair to be made by State Prosecutor Lador, as Attorney General Weinstein 'must avoid dealing with this case'

Eli Senyor

Latest Update:

04.07.10, 22:02 / Israel News

The police's National Fraud Unit has uncovered a serious corruption affair, involving the Holyland real estate project in southwest Jerusalem and additional projects. The police and the court have defined the new scandal as "one of the most serious corruption affairs in the State's history."

Attorney Uri Messer, a former association of ex-Prime Minister Ehud Olmert, was arrested Tuesday along with four other officials whose houses were searched by the police. Attorney Messer is currently serving as a witness for the prosecution in two of the affairs Olmert has been indicted for.

The Jerusalem District Court will discuss on Thursday a request made by Jerusalem District Prosecutor Eli Abarbanel to reverse the order of testimonies in the Olmert trial and to begin with the double-billing affair instead of the Investment Center and Talansky affairs. Abarbanel is expected to explain to the court the connection between the new affair and the former prime minister's trial.

State Prosecutor Moshe Lador will be making the decision in the affair, as Attorney General Yehuda Weinstein must avoid dealing with this case.

A senior official in the law enforcement system told Ynet on Wednesday, "Although Weinstein is familiar with the details, the final decision on the matter, once the affair reaches the State Prosecutor's Office, will be made by Lador and not by AG Weinstein, who must avoid making a decision on the matter."

The new investigation, dubbed "the Holyland affair", focuses on suspicions of bribery in exchange for advancing real estate projects in the capital, including the Holyland housing project in southwest Jerusalem, which has been referred to by some as an "ugly real estate monster", Including by the judge who extended the suspects' remand.

THE MONSTER ON THE HILL !

The affair is said to be unprecedented in terms of the amounts allegedly paid in bribes – tens of millions of shekels, the extent of time it lasted – from 1999 to 2007, and the volume of the projects involved – which are valued at billions of shekels.

The police's findings are based on a key witness who was involved in the Holyland project. A gag order has been placed on some of the details of the investigation.

The investigation focuses on the Holyland project, but it involves additional projects, including Manara Cliff in the Galilee panhandle, where there was a plan to build a housing project which has yet to be implemented, and projects of the Hazera company, which holds lands near the former Hiriya waste facility.

An attempt to build luxury apartments in the Hiriya area has been denied by planning officials, and has even resulted in bribery charges against Oded Tal, a former Israel Land Administration officials.

On Tuesday, the police raided the offices of the Polar company, which is a partner in the Holyland initiative and the owner of the Hazera company. It should be noted that Polar's owners have been replaced since the time the affair took place.

Police: Entire corruption system

In the past few days, under media blackout, the police arrested five people involved in the affair, including Attorney Uri Messer, former Jerusalem City Engineer Uri Shetrit, businessman Hilel Cherny, Jerusalem entrepreneur Meir Rabin and accountant Eliyahu Hasson.

The five are suspected of bribery, fraud and money laundering. The investigation is ongoing.

The police's National Fraud Unit raided the Jerusalem Municipality building on Tuesday and confiscated documents relevant for the investigation. The investigators coordinated their arrival with Mayor Nir Barkat, who gave his consent to the search.

The investigators searched several offices in the compound, reportedly focusing on the archives and taking documents from the municipal planning and construction office.

According to sources in the municipality, Barkat was informed that some of the workers would be taken in for questioning.

National Fraud Unit raids Jerusalem Municipality (Photo: Noam Moskowitz)

"It should be noted that in terms of the severity of the actions, this is one of the most serious affairs in the State's history," Rishon Lezion Magistrate's Court President Judge Abraham Heiman ruled Tuesday during the suspects' remand hearing.

Superintendent Lior Rice revealed during the court hearing that the investigators had uncovered an entire system created to bribe senior officials in the public sectors in order to advance the interests of different companies involved in building projects.

Suspicions and method

The massive Holyland project in Jerusalem was launched in the 1990s, and the plan to build hundreds of housing units received the final approval in 1999. The key suspect in this affair is businessman Hilel Cherny, who owned the lands in the Holyland compound.

According to the suspicions, Cherny sought to increase the building rights in the area and paid a bribe of tens of millions of dollars to different people, including senior Jerusalem Municipality and Israel Land Administration officials.

Cherny is also the owner of the Manara Cliff project near Kiryat Shmona in northern Israel. According to the suspicions, in both projects he needed the authorities' help. He operated an entire system, including real estate entrepreneur Meir Rabin, in order to contact officials who would take the bribe.

According to the suspicions, Rabin served as a mediator on behalf of the land owners in their attempts to convince Jerusalem Municipality officials and the local planning and construction committee to advance the plan. Rabin was responsible for locating officials he believed would accept a bribe in exchange for supporting the Holyland project.

The "dirty work" of transferring the funds was done by Eliyahu Hasson, the Holyland company's accountant. He is suspected of disguising the funds given as a bribe to different municipality officials. The National Fraud Unit investigators found in his office documents showing that Hasson knew the funds were used to bribe decision makers. .

Attorney Messer, who was one of Olmert's closest friends for years, is said to have been involved in almost all the projects. He is suspected of mediating the bribes, money laundering and conspiring to commit a crime.

Messer said during the remand hearing, "I have a lot to say and I will say it once I am given the opportunity."

Another detainee is Uri Shetrit, who served as the Jerusalem city engineer from 2001 to 2006. According to the suspicions, at a certain stage he suddenly began advancing the Holyland project vigorously, after strongly objecting to it in the past.

According to the police, millions of shekels transferred to Shetrit made him change his mind. Moreover, he even worked to increase the project's building percentages, helping the entrepreneurs save millions of shekels as part of his role as city engineer.

"Shetrit, in unrestrained greed, took a bribe while committing money laundering, forgery and fraud offenses," the National Fraud Unit said in its request to keep the man in custody. The police added that Shetrit "abused his office and worked to advance interests which are completely against the law.

The bribery funds were allegedly received in cash and valuables for the private architects' office he owned at the time. In exchange, he issued fictitious invoices, violating the anti-money laundering law. Upon his arrest, his bank accounts were frozen under a court order and documents from his term as city engineer were confiscated. He is suspected of taking a bribe, money laundering, falsifying documents, false registration, fraud and breach of trust.

It should be noted that Shetrit was placed in the 48th spot in Kadima's list for the 17th Knesset. This fact, however, has not been linked to the new affair so far. Olmert said before the 2006 elections that "Mr. Uri Shetrit was added to the Kadima list due to his traits and experience."

Judge 'astonished by monster'

All of the suspects' remand was extended by eight days, apart from Messer, who will remain in custody six more days. Although the investigation has only just began, Judge Heiman, who has been involved in the affair for a while after the investigators asked him to sign different injunctions related to the probe, used harsh words to explain his decision and slammed the Holyland project.

"A person travelling on Jerusalem's Begin Road, after reaching Golomb Street, looks to the right and sees the monsters which are strong enough to make the city look ugly, and stares at them in astonishment," the judge wrote in his ruling. "Anyone living in Jerusalem knows what this means."

Justice Heiman expressed his full support for the police's stand and approved the requested custody days.

Ronen Medzini, Tani Goldstein and Aviad Glickman contributed to this report

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