Talansky Lawyer: End U.S. Probe Of My Client

A federal grand jury in Brooklyn has begun investigating tax and money-laundering issues involving Morris Talansky, the businessman at the heart of the bribery scandal involving Israeli Prime Minister Ehud Olmert, but his lawyer here is asking Israeli authorities to quash it.

Unless that happens, Talansky will not return to Israel for another round of pre-trial questioning by Olmert’s lawyers, according to Talansky’s lawyer, Bradley Simon of Manhattan.

In an Aug. 12 letter to Israeli authorities, Simon wrote: “The Israeli Justice Ministry put [Talansky] in a position where he gave incriminating information and the FBI has now begun serving subpoenas” based upon that testimony.

Among those served with a subpoena, The Jewish Week has learned, was Talansky’s personal accountant, who was told to bring along
his client’s tax records.

“Mr. Talansky remains committed to cooperating with Israeli prosecutors,” Simon said in his letter. “We are hopeful that issue can be satisfactorily resolved so that Mr. Talansky can continue to cooperate with your investigation without simultaneously placing himself in jeopardy here in the United States.”

The letter, written to Israel’s state attorney, essentially seeks to convince Israeli authorities to pressure the U.S. to drop the Talansky probe. Simon said he is awaiting a reply.

“It is not my intention to create an international crisis, just to see that one man, my client, is protected,” Simon explained in an interview. “I am not sure what the outcome will be, but I am raising issues of fundamental rights as set forth in the U.S. Constitution.”

Talansky testified in May and again in July and was preparing to return to Israel to be questioned again by Olmert’s lawyers on Aug. 31. But Simon, who said he was only recently hired by the rabbi, stepped in to stop that.

“I feel that his cooperation with the Israeli Justice Ministry has put him in harm’s way and I want them to do right by him if they are going to use him as a critical witness,” Simon said.

During his several days of testimony, Talansky testified that he gave Olmert envelopes stuffed with cash for his political campaigns. He said it totaled more than $150,000 over the course of 13 years.

Israel’s state prosecutor, Moshe Lador and Jerusalem District Attorney Eli Abarbanel were to meet this week with Talansky’s Israeli lawyers to discuss how Talansky would be able to complete his testimony.

“I assume it’s impossible to force the Americans not to investigate Talansky’s affairs, or to close any cases that might be opened against him,” Yehoshua Reznik, one of Talansky’s Israeli attorneys, told The Jerusalem Post. “But it’s possible to try to reach a situation in which what is said during the rest of his questioning will not be used against him there. That seems realistic to us.”

But other Israeli jurists said the chances of Israel being able to secure such a deal for Talansky are slim. A senior American legal official also said he doubted the U.S. authorities would agree to such a deal.

The scope of the American investigation is not known, but Talansky, an ordained Orthodox rabbi, had served as the U.S. treasurer of the New Jerusalem Foundation, a charity Olmert established shortly after being elected mayor of Jerusalem in 1993. Now Israel’s National Fraud Unit is investigating three members of the charity’s board — Olmert, Talansky and Joseph Elmaleh, who gave Olmert a low-interest $75,000 loan in 1993 that was never repaid.

A two-month investigation by The Jewish Week revealed in July that Olmert crisscrossed America to raise money for the foundation. And during the height of the second intifada in the early 1990s, Olmert said the money would help Israeli terror victims.

But The Jewish Week found many financial anomalies in the operation of the New Jerusalem Foundation and its American fundraising arm. It found also that much of the money was raised in cash. And the U.S. arm of the foundation failed to disclose to the Internal Revenue Service its ties to the Jerusalem operation, as required by law, and the salary of its Jerusalem director general.

Olmert is scheduled to be questioned by Israeli authorities for a sixth time late this week as they continue to pursue their probes against him. In addition to the alleged bribery, authorities are also said to be investigating whether he billed the Israeli government and private organizations abroad for the same trips he made to the United States.

In other Israel news, the cabinet voted Sunday to free 199 Palestinian prisoners, including one who killed Israelis in a terrorist attack and another who ordered Israeli killings, in an effort to boost the stature of Palestinian President Mahmoud Abbas.

“This is a gesture and a trust-building move aimed at bolstering the moderates in the Palestinian Authority and the peace process,” according to a statement released by Olmert’s office.

A Hamas spokesman reacted angrily to the move, claiming that Israel wants to give the appearance that peace talks have been successful.

“This is convincing no one,” the official, Sami Abu Zuhri, was quoted as saying.

But Yuval Diskin, the head of Israel’s internal security service, reportedly told the cabinet Monday that the prisoner release “creates pressure on Hamas and is likely to accelerate the negotiations over Gilad Shalit,” the Israeli soldier kidnapped by Hamas and other terrorist groups in a 2006 cross-border raid.

That appears to be what happened because the next day, a Hamas spokesman threatened Shalit’s life if negotiations for his release were not speeded up. And he accused Abbas and Palestinian Prime Minister Salaam Fayad of trying to delay a deal.

“Abbas and Fayad do not want the Resistance to achieve a respectable deal as they do not believe in the way of resistance,” the spokesman, Abu Obeida, was quoted as saying. “They only believe in the way of negotiations and begging to the enemy, and succeed only in releasing prisoners who were anyway approaching their release date.”

Israeli opposition leader Benjamin Netanyahu of the Likud Party weighed in on Wednesday, telling the Knesset that the “release of murderers is a dangerous move in the war on terror.”

Despite the friction between Hamas and Abbas, who heads the Fatah Party and the Palestinian Authority, “most Arabs outside the Palestinian areas prefer to see a unified Palestinian entity,” according to Shibley Telhami, the Sadat Professor for Peace and Development at the University of Maryland.

In a conference call arranged by the Israel Project, a non-profit group dedicated to providing accurate information about Israel, Telhami said that when pressed, more Arabs “sympathize with Hamas than Fatah.” But although Hamas refuses to recognize Israel and vows to destroy it, “a majority of the Arab public has come to accept a two-state solution,” he said.

And Telhami pointed out that fully 72 percent of both Israelis and Palestinians “implicitly or explicitly would accept it.”

Steven Kull, director of the Program on International Policy Attitudes who recently completed a poll of citizens in 18 nations to learn their attitudes towards the Israeli-Palestinian conflict, said most people would like to see the United Nations play a larger role in ending the conflict.

He said he found that 67 percent favored bringing in an international peace force should a peace treaty be signed. When asked whether the UN Security Council should commit itself to protecting Israel, the residents of 11 out of 16 nations polled “would commit to protecting Israel.”

“The overarching theme is that they did not want their governments to take sides … and they want multilateral action to break the deadlock” in the peace talks, Kull said.