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Comptroller asks attorney general to probe PM's campaign financing

Ariel Sharon's primaries campaign allegedly used improperly gained NIS 5.9 million

State Comptroller Eliezer Goldberg has sent the attorney general all material regarding alleged financial improprieties in Ariel Sharon's primary election campaign in the Likud party.

The report suggests the Likud and the prime minister's son Omri Sharon may have improperly received NIS 5.9 million that was funneled to the party from a company established by Sharon's lawyer, Dov Weisglass.

Run by Omri Sharon, Annex Research was to pay for services provided to the Sharon primary campaign.

After Sharon was elected chairman of the Likud, NIS 1.2 million was paid to a team that, inter alia, conducted polling for Sharon.

The prime minister wrote to the state comptroller on August 27 after receiving a preliminary draft of the comptroller's report.

Sharon wrote "for the first time" he had learned that "a company called Annex Research Ltd. had received the sum of NIS 4.7 million that was used to pay for services to further the campaign for leadership of the Likud in the elections of September 1999, in contravention of the law. Since the comptroller's report determined that these were illegal contributions, I intend to return that money to Annex so it can be returned to the donors."

Sharon's letter included a copy of a second letter, to Annex, ordering the money to be returned to the donors. It was not known last night if the NIS 4.7 million has been returned to the donors.

Channel Two television last night reported that during comptroller Goldberg's questioning of the prime minister, Sharon was presented with a check for NIS 100,000 he had written and signed, and asked about it.

"Yes, that's my signature," the prime minister said, "but on all matters concerning the finances, you have to ask my son, Omri."

The comptroller has already fined the Likud NIS 600,000, to be deducted from its funding from the government - and at his press conference yesterday he criticized the Knesset for not taking legislative action to close the loopholes in campaign funding.

A spokesman for Sharon yesterday said "the prime minister is now studying the report and if there were any flaws, they undoubtedly were innocent and will be corrected.

Goldberg said: "My job is to examine administrative aspects of the campaign funding law, but after my investigation, suspicions arose of criminal activity and I handed the matter over to the attorney general, who is responsible for enforcing the law. I added in my letter to him that all the material in my office is available to him."

He said Omri Sharon and Gabriel Manor, ostensibly the CEO of Annex Research, but actually only a figurehead, exercised the right to remain silent in order to prevent self-incrimination.

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In Omri Sharon's case, Goldberg said, the prime minister's son refused to answer, both to prevent self-incrimination and "to avoid harming others".

Omri Sharon's lawyer, Dan Sheinman, said, "In my name and in the name of my client, we are satisfied that the comptroller accepted some of our positions and took into account our detailed responses." He said that while representing Sharon to the comptroller, he argued that the money was spent to promote Ariel Sharon's "personal image and had nothing to do with the campaign finance law."

Asked about Omri Sharon's refusal to answer questions while serving as an emissary for his father, the comptroller said, "As far as I know, Omri Sharon does not hold an official position in the civil service. As for the proper behavior, each person must tell the truth, the whole truth, and nothing but the truth and by doing so do his civic duty."

As for the prime minister, Goldberg said that he had no "unequivocal" answer to the question of whether Sharon was criminally implicated by the material. He refused to say whether he suspected Sharon of criminal activity, reiterating that the material in the affair had been passed on to the attorney general, for his consideration.

But Goldberg was firm on his position that the financing of Sharon's activities, once he became chairman of the Likud in September 1999, fell under the aegis of the campaign financing.

"The prime minister, while head of the opposition, employed a team of advisors who were paid by overseas donors to advance his position and his public image. The question is whether that activity and donations to the Likud should be considered only as Sharon's preparations for the Likud primaries. My conclusion was that one could not speak of the personal political activity of the chairman of the party without any connection to the party. His personal political activity is the activity of the party. The chairman of the party is also allowed to prepare for primaries, as long as they make the distinction clear between their activity and the activities of the party's own mechanisms. That distinction was not made in Sharon's case," said Goldberg.

He called for new legislation to prevent a situation in which a party leader can raise money without limits between primaries. "Given the information in the report regarding the transparency of money raised by politicians to build coffers in preparation for their race for the party leadership," said Goldberg, "rules should be made about that money's transparency in the candidate's books."

He said that there are no limits on donations except for the nine months before a primary election, "and this creates a danger of no clear line between capital and government. Without limits and transparency, between primaries, it's impossible to eradicate the suspicion of dependency between the donor and the recipient. And that concern grows if and when the recipient of the money reaches a position of power in government."

"I can only regret that the legislature has not taken action on this matter," said Goldberg. "It's about time that all the financial activity of the political system and each politicians be transparent to the public. The campaign finance laws prevent the heavy donors from going in through the front door, but the window remains open and the donors go through it without any limits and without any reports. The secrecy around these matters is the mother of all the sins."

Opposition leader, MK Yossi Sarid, said yesterday that already in early March he sent the police - and later the attorney general - material indicating criminal suspicions regarding the Sharon campaign's fund raising methods. But he never received a response, from either Criminal Investigations Chief Moshe Mizrahi or from Attorney General Rubinstein. He said he hoped that after Goldberg's report has been published, a police inquiry will be inevitable and nobody will be able to suspend the proceedings for fear for their jobs.

MK Ophir Pines-Paz, chair of the Knesset Constitution, Justice and Law Committee, said that he expects Rubinstein to order the police to immediately begin an investigation into the fund raising activities of the prime minister and his associates.

Yesterday afternoon, State Attorney Edna Arbel, as acting attorney general in Rubinstien's absence, convened senior members of the attorney general's office to discuss the material. Several of those in the meeting said that several aspects of the case required further investigation - including Omri Sharon's silence in the face of the comptroller's questioning - but the investigation will only take place upon Rubinstein's return from abroad.

Nonetheless, the Justice Ministry, at this stage, is unlikely to take any actions regarding the comptroller's report on the party financing, since the comptroller has already fined those parties, including Likud and Labor, who were found to have violated campaign financing laws.