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Olmert not to be investigated?
Photo: Haim Zach
Shula Zaken
Photo: Dana Kopel
Yoram Karashi
Photo: Ofer Amram
Aides: PM not involved in tax fraud affair
In spite of Tax Authority chief's arrest and suspicions against Olmert's bureau chief Shula Zaken, sources close to prime minister convinced he will not be interrogated over tax fraud affair, as they claim he was not involved

The storm raging in the upper echelon's of the finance community - the arrest of Tax Authority senior officials - spilled over into Prime Minister Ehud Olmert's office Tuesday night.

 

While Olmert's bureau chief Shula Zaken, the sister of one suspect, is to be placed under house arrest, and Tax Authority Chief Jacky Matza - appointed by Olmert during his tenure as finance minister - is to be remanded for six days, the Prime Minister's Office is trying to maintain business as usual.

 

Sources close to Olmert posited Monday night that the prime minister is not likely to be investigated in the affair. According to them, there's no information tying Olmert, in his former role as finance minister, to the indictments against senior Tax Authority officials.

 

Likewise, they say, there is no evidence against Zaken, who is suspected, among other transgressions, of bribery, fraud, breach of trust, and granting tax benefits to cronies.

 

Olmert went about his intended itinerary Tuesday, making sure not to miss any meetings. Nonetheless, there was a heavy atmosphere in the office pursuant to bureau chief Zaken's investigation and arrest. 

 

Despite the tension, office members expressed their hopes that the investigation be thoroughly completed and that such investigation reveal Zaken's innocence.

 

Tuesday night it was revealed that, while finance minister, Olmert had been interested in appointing an external candidate to the post of Tax Authority Chief, but, pursuant to a negative recommendation from Attorney General Menachem Mazuz, he was forced to choose between two other candidates, one of whom was Jacky Matza.

 

Ongoing investigation 

In the mean time, the Tel Aviv Magistrate's Court continues to act against suspects in the case. As stated, the court extended the remand of Jacky Matza, director of the Israeli Tax Authority, by six days.

 

The remand of Yoram Karashi, Shula Zaken's brother, was extended by nine days.

 

Matza's predecessor Eitan Rov and additional suspects involved in the affair will also remain in custody. According to suspicions, businesspeople were involved in the appointment of position holders in the Tax Authority in return for tax relief.

 

The Fraud Unit has been conducting a wide-scale secret investigation in light of suspicions they were involved in various corruption-related offenses and has been probing, among others, senior Tax Authority officials, private businessmen and other parties.

 

Judge Mordechai Peled wrote in his decision to extend remand that Matza "forsook his own judgment and was instructed by Karashi and Yacov Ben Gur (a businessman also under investigation in the affair) to act according to external interests."

 

"This is an abuse of the great power and jurisdiction placed in the hands of the holder of such a position," he added.

 

Avi Cohen contributed to this report

 

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