In Court, Talansky Offers Details of His Relationship with Olmert

After weeks of legal limbo and widespread speculation about his role in Prime Minister Ehud Olmert’s latest corruption scandal, American Jewish businessman Morris Talansky has had his day in court.

The Long Island, N.Y., financier was deposed Tuesday by Israeli prosecutors, bringing into public view the story that broke last month when Talansky was questioned by police during a Passover visit to Israel.

Occasionally breaking down in tears and appealing to be allowed to return home to New York, the 75-year-old Talansky told Jerusalem’s District Court about some $150,000 in cash handouts he allegedly made to Olmert in the 15 years before Olmert became prime minister.

“I looked at him as a man who could accomplish a great deal,” Talansky said, according to court reporters.

Talansky said he admired Olmert’s “ability to articulate, his ability to reach out to the American people, the largest and richest community of Jews in the world — and we are losing them at the fastest rate you can imagine.”

“And that’s why I supported him,” Talansky said. “That’s why I gave it to him. That’s why I supported the man, that’s why I overlooked — frankly and honestly — a lot of things. I overlooked them. Maybe I shouldn’t have, but I overlooked them.”

Olmert has admitted taking money from Talansky, saying it was used to finance his successful 1992 and 1998 campaigns for the Jerusalem mayoralty as well as an unsuccessful bid in 2003 to head the Likud Party.

Though Israeli law puts strict limits on foreign contributions to political causes, Olmert has insisted on his innocence and pledged to resign if indicted.

The prospect of such a major government shake-up comes as Olmert pursues renewed peace talks with Syria as well as efforts to clinch an accord on Palestinian statehood before President Bush leaves office in January.

Talansky’s payments to Olmert have raised the specter that the prime minister could be charged with bribery. Olmert has denied taking any bribes, and he has tried to distance himself from Talansky by saying that his former law partner, Uri Messer, handled the exchanges of money.

Talansky, who has worked as a fund-raiser for Israeli charities and also has an international mini-bar business, told the court he received nothing from Olmert in return for the cash.

“I never expected anything personally,” he testified. “I never had any personal benefits from this relationship whatsoever.”

But apparently it was not for lack of trying.

According to Talansky, Olmert put him in touch with U.S. Jewish casino mogul Sheldon Adelson, Israeli real estate magnate Yitzhak Tshuva and the late Roland Arnall, the founder of Ameriquest, in the hope they could do business. Nothing came of the contacts.

“I said to myself, ‘I’m never going to go to a politician for business,’ ” Talansky told the court with a laugh. “He wanted to do me a favor and it never worked out.”

Talansky’s court appearance Tuesday was a “preliminary deposition” — a procedure Olmert’s lawyers tried, and failed, to block.

Talansky was questioned by State Attorney Moshe Lador, who said the probe is focusing on Olmert’s receipt of large sums of undocumented cash while serving as the mayor of Jerusalem and as Israel’s minister of industry, trade and infrastructure.

Lador’s office has withheld comment on what, if any, charges could be brought against the prime minister, who has survived three other criminal investigations of his conduct in public office.

“We are not currently thinking of an indictment,” Lador told reporters this week, adding that Talansky would be recalled in July for more questioning. In the meantime, he is expected to be allowed to leave Israel and return home to the United States.

Talansky faces additional legal troubles in the United States. The mini-bar company Talansky helped finance sued him last week in State Supreme Court in Manhattan for seeking to help a competitor steal a contract with a New York hotel, The New York Times reported.

In addition, U.S. authorities may be looking into whether Talansky’s dealings with Olmert broke any U.S. anti-bribery statutes, the report also said.

According to an Israeli Justice Ministry source, police suspect that as much as $500,000 given to Olmert may be unaccounted for. Olmert has denied any wrongdoing.

This latest investigation of Olmert, which initially was under a court-issued gag order that kept Talansky’s identity from publication in Israeli media, also has involved police questioning of Messer and Olmert’s longtime aide Shula Zaken.

In his deposition Tuesday, Talansky also said he gave cash to close relatives of Olmert, saying that at one point he loaned the family $25,000 to pay for a vacation in Italy.

“He loved expensive cigars,” Talansky said of Olmert. “I know he loved pens, watches. I found it strange.”

Talansky said many loans he made to Olmert were never repaid. Talansky said he had not thought to request that the exchanges be documented.

“I figured we don’t need any notes from him. His word was gold,” Talansky said. “Famous last words.”

The relationship between Olmert and Talansky faded after Olmert became prime minister in 2006, Talansky said, though Talansky said Olmert invited him to see the prime minister address Congress in 2006.

“It was absolutely the most masterful talk one could hear,” Talansky recalled.

Talansky said he thought, “This is the kind of man that could lead the country” and felt “vindicated, to myself, that the choice of this man would be the salvation to Israel.”