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Cablegate: Olmert's Travelgate - Attorney General Begins March Toward

VZCZCXRO1783
OO RUEHROV
DE RUEHTV #2647/01 3331541
ZNR UUUUU ZZH
O 281541Z NOV 08
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9354
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RHEHNSC/NSC WASH DC

UNCLAS SECTION 01 OF 02 TEL AVIV 002647

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PINR IS
SUBJECT: OLMERT'S TRAVELGATE - ATTORNEY GENERAL BEGINS MARCH TOWARD
AN INDICTMENT

1.(SBU) Summary: PM Ehud Olmert has been subject to the
investigation of the Israel Police and the scrutiny of the Attorney
General's office since 2005 in regard to at least five separate
cases of alleged abuse of authority in public office, dating back
over the past fifteen years. Several of the files went nowhere:
the Bank Leumi sale was subsequently closed; in the Greek Island
Affair Olmert was not prosecuted; and even the Morris Talansky
Affair involving allegations of "cash envelopes," which led to
Olmert's resignation in September, has so far failed to produce
indictments. It was therefore something of a surprise when the
Attorney General's office released a somber statement on November 26
informing the public that AG Meni Mazuz had informed the Prime
Minister's legal representative that he was considering filing an
indictment in the "Rishon Tours" Affair regarding alleged double
billing of travel vouchers related to the Prime Minister's travels.
The timing, just short of eleven weeks from general elections raised
the question of whether Olmert will suspend himself from office and
leave Foreign Minister Tzipi Livni to serve as acting prime
minister. Livni has demanded that Olmert suspend himself, but
Olmert's team says he does not plan to do so. End Summary.

MAZUZ SIGNALS AN INDICTMENT IN THE WORKS


2. (SBU) The lengthy Hebrew text of the Attorney General's November
26 announcement that he is considering filing an indictment against
Ehud Olmert in the Rishon Tours Affair notes that prior to any
decision on his part, "and should the Prime Minister wish it, a
hearing will be conducted, as is customary, in the presence of the
Attorney General." In that hearing "the PM's attorneys will be able
to present arguments and facts which will be examined with an open
mind as is the practice." The timeframe will be coordinated with
the Prime Minister's attorneys. The significance of this last fact
is that given Olmert's record in regard to allocating time for the
police questioning over many months, it is reasonable to suppose
that the hearing will not be a short-lived affair and the Attorney
General's office will not be able to expedite it. The chances of
completion prior to the February 10, 2009 election date are
negligible.

RISHON TOURS AFFAIR

3. (U) If, as one commentator has suggested, the Hebrew text of the
Attorney General's notice to the Prime Minister is in fact a draft
of the indictment, then Olmert's attorneys may now be conducting
preliminary work in preparation for the hearing. The Attorney
General's statement specifies suspicion that Olmert misappropriated
85,000 dollars by means of "double-billing" travel expenses while in
public office as Mayor of Jerusalem (1993-2003) and as Minister of
Industry and Trade (2003-2006).

OLMERT'S LAWYERS RESPOND

4. (U) Olmert's lawyers issued a joint statement in reaction to the
Attorney General's decision. They claimed that Olmert denied the
charges regarding Rishon Tours and lambasted Mazuz for including in
his advisory letter various points on which Olmert claimed he had
not been questioned at all. Olmert's lawyers told Ma'ariv
newspaper: "The procedure of a hearing is exceedingly substantive
and it is not without precedent that initial decisions that were
taken to indict were overturned in the light of arguments that were
raised in the course of such a hearing..."

NO POLITICS INTENDED

5. (SBU) Attorney General Meni Mazuz has generally appeared
reluctant to make a decision which would influence the fortunes of a
particular party and to remain above or outside politics; however,
news of ongoing or new investigations have often created political
crises, such as the Talansky Affair that began in April 2008 and
sparked calls for Olmert's resignation that were eventually heeded.
The most Olmert can do at this juncture is to suspend himself from
office on grounds of "incapacitation" or be suspended upon the
recommendation of the Attorney General himself. There is no
indication that either of these two scenarios are about to unfold.
Should he do so, Livni, in her capacity as "Alternate Prime
Minister," would become Prime Minister temporarily (i.e., at least
through the upcoming elections).

THE RABIN AND KATSAV PRECEDENTS

6. (SBU) The moral imperative, however, may yet be invoked in a
demand for Olmert's suspension. Non-governmental organizations and
even private individuals may petition Israel's Supreme Court to
demand that the Prime Minister divest himself, at least temporarily,
of the office he holds in light of the gravity of the Attorney
General's advisory - which is the first to emerge from all the
investigations Olmert has undergone. If they do submit such a plea
with the court, they will almost certainly cite the case of former

TEL AVIV 00002647 002 OF 002


Prime Minister Yitzchak Rabin. In 1977, Rabin was the head of a
transitional government when he was notified by the Attorney General
that he was considering filing an indictment against him for
violating Israel's currency regulations in the case of the U.S.
dollar account which Rabin's wife had maintained in the United
States. Rabin immediately suspended himself from office and handed
over the reins of power to his arch-rival Shimon Peres. More
recently, President Katsav took a leave of absence from his post
after Attorney General Mazuz informed him that he was considering an
indictment on charges of rape and sexual harassment. Katsav
resigned shortly before the expiration of his full term in office in
June 2007, and reached a plea bargain that he later reneged on.

LIVNI'S DEMAND REJECTED BY OLMERT'S CAMP

7. (U) Foreign Minister and Kadima Party Chair, Tzipi Livni,
reacted to the Mazuz decision by calling on Olmert to suspend
himself from the office of Prime Minister. She reportedly told
Kadima cadres on November 27 that "The Prime Minister, like anyone
else in Israel, is innocent until proven guilty. But citizen Olmert
should fight from home and not from the position of prime
minister... The prime minister must suspend himself. There is no
other option." In response, an Olmert spokesman, Amir Dan, stated
that the prime minister had no intention of suspending himself and
accused "politicians" of acting for "political reasons." Should
Olmert suspend himself, Livni would automatically become the Acting
Prime Minister until elections on February 10, 2009.

MORENO

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