Israeli police seek criminal charges against Olmert

By Ari Rabinovitch

JERUSALEM (Reuters) - Israeli police said on Sunday they wanted Prime Minister Ehud Olmert to face criminal charges in a corruption scandal driving him from office during peace talks with the Palestinians.

Issuing a non-binding recommendation, police said they had evidence showing that Olmert illegally received money from a U.S. businessman and made duplicate claims for travel expenses when he served as mayor of Jerusalem and trade and industry minister.

He has denied any wrongdoing in a series of investigations.

A police document said the recommendation included charges of bribery, fraud, money laundering and breach of public trust over funds that "reached hundreds of thousands of dollars".

With Olmert committed to resigning after his Kadima party holds a leadership vote on September 17, the recommendation will have no immediate impact on his tenure and does not guarantee an indictment will be filed by Israel's attorney-general.

Olmert's lawyers called the police recommendation "meaningless" because only the attorney-general can decide whether or not to indict a prime minister.

"We will wait patiently for the attorney-general's decision, and as opposed to the police, we have no doubt in our hearts he is well aware of the responsibility he carries," the lawyers said in a statement.

LEGAL CASES

Olmert, who has vowed to pursue U.S.-backed peace talks with the Palestinians, could stay in office for weeks or months while his successor tries to form a new government coalition.

Polls show Israeli Foreign Minister Tzipi Livni as the front-runner in a Kadima leadership race pitting her against Transport Minister Shaul Mofaz, a former defense chief.

"It has not been an easy day for the state of Israel. The police recommendation is a recommendation, and the attorney-general needs to make a decision," Mofaz said in an interview on Israel's Channel One television.

Palestinian negotiator Saeb Erekat said of the police recommendation: "This is an internal Israeli matter, but we hope that the internal complexities will not lead to more settlements and incursions."

One case focuses on New York-based fundraiser Morris Talansky who testified in an Israeli court in May he had given Olmert $150,000 in cash-stuffed envelopes over a 15-year period.

The police document said: "The investigation showed that Talansky transferred to Olmert over the years, at least since 1997, significant sums of money, in different ways, some in cash and illegally."

At the same time, Olmert used his position to promote Talansky's businesses, the police said.