JERUSALEM
The Israeli government's chief watchdog yesterday recommended a criminal investigation into a deal by Ehud Olmert before he became prime minister.
This further weakens the embattled Israeli leader, whose popularity has plummeted since last summer's inconclusive war in Lebanon.
The state comptroller, Micha Lindenstrauss, issued a lengthy report charging that when he was trade minister in 2001, Olmert interfered improperly in the process of awarding grants to Israeli businesses through the ministry's Investment Centre, favouring a colleague.
Olmert has consistently denied wrongdoing in all the cases that have emerged in recent years, including real estate deals with questionable profits and alleged attempts to skew the tender for sale of a large bank to benefit backers.
Olmert's office yesterday denied all wrongdoing. "We have no doubt this affair, like all the other affairs examined by the state comptroller which ended in nothing, will disappear like foam on water," the statement said.
Ultimately the Israeli attorney general has the final say about whether a criminal investigation will be opened, but the rapidly growing pile of potential scandals is harming Olmert's standing, at a time when his popular support is approaching single figures.
That could come to a head next Monday, when the commission he appointed to investigate the Lebanon conflict presents its interim report.
Analysts say it will criticise Olmert and his defence minister, Amir Peretz, for their decision to order a large-scale operation in response to a cross-border attack by Hezbollah guerrillas, who killed three Israeli soldiers and captured two others.
In the 34-day conflict, the military failed to achieve the goals Olmert stated - returning the captured soldiers and crushing Hezbollah.
The Investment Centre case has been in the works for months. Lindenstrauss found Olmert erred through involvement in a grant for a business involving his friend and former partner, lawyer Uri Messer.
"Olmert should have removed himself from dealing with the company's request, put forward by Messer, and in not doing so placed himself in a conflict of interest," Lindenstrauss wrote.-AP
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