Aide to Israel's Olmert arrested in tax probe
Source: Reuters
(Recasts with arrests, details) By Allyn Fisher-Ilan JERUSALEM, Jan 2 (Reuters) - An Israeli court ordered the arrests on Tuesday of Prime Minister Ehud Olmert's executive secretary and the country's tax commissioner as police probed suspicions of involvement in payoffs in exchange for tax breaks. The probe of more than a dozen prominent Israelis cast a fresh shadow on Olmert's government, already beset by other investigations and wide public dissatisfaction with his handling of a recent war with Hezbollah guerrillas in Lebanon. Olmert himself was not questioned nor accused of any personal involvement in the probe, but it drew new criticism of the functioning of his administration. Shula Zaken, a longtime aide to Olmert and his bureau's administrative head, was among 20 officials and other Israelis questioned on Tuesday, including Israeli tax commissioner Jacky Matza, Micky Rosenfeld, a police spokesman, said. Rosenfeld said a court had accepted a police request for Zaken to be put under house arrest for 10 days, and ordered Matza jailed for six days. Two businessmen were jailed for eight days apiece. None of those detained have been formally charged, but are being held while the investigation continues. Ten other suspects, businessmen and tax commission employees, were still facing a judge, Rosenfeld said. Police for months had been investigating allegations that top government officials had either received or given bribes to win tax breaks for companies, Rosenfeld said. He said some officials were suspected of naming associates of certain businesses to the authority that administers taxes. Police did not immediately publish precise details about the suspicions against Zaken. Appointments to the tax authority go through the prime minister's office. OLMERT AIDE DENIES Zaken's lawyer, Micha Fettman, said on Army Radio that "she denies the suspicions" against her. Olmert's spokeswoman, Miri Eisin, had no comment. The tax commissioner's spokeswoman also declined to comment. Some Israeli commentators said the extent of the probe raised questions of widening corruption. "This is an earthquake not only for the tax commission, but for what pertains to order in Israel's regime," Oded Shahar, an Israeli economics commentator and talk show host told Channel One television. Yithzak Galnoor, a former civil service commissioner, said: "We have seen corruption before. This time we have stooped to an even lower level. The fact that this could get worse frightens me a great deal." Olmert himself has been the subject of several investigations by the state comptroller. In October, the comptroller accused Olmert of acting illegally in a 2005 sale of Bank Leumi when he was finance minister. Olmert has denied wrongdoing. The Israeli comptroller was also looking into the terms of Olmert's purchase of a Jerusalem apartment in 2004 and whether he appointed cronies to a business authority that year. Olmert's office has reserved comment on the real estate deal pending an official approach by the authorities, but has denied any wrongdoing regarding appointments to an Israeli business authority while he served as industry and trade minister.(Additional reporting by Steven Scheer in Jerusalem)
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