Texas Jewish Post (Fort Worth, Tex.), Vol. 64, No. 16, Ed. 1 Thursday, April 22, 2010 Page: 4 of 24
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4 I April 22,2010
New corruption scandal dooms
chances of Olmert comeback
By Leslie Susser
JERUSALEM (JTA)—Whether or not he is found
guilty of taking bribes in the Jerusalem Holyland
corruption scandal, Ehud Olmert s political ca-
reer is almost certainly over.
At best, the former prime minister and ex-
mayor of Jerusalem can expect many months, if
not years, of litigation that will further tarnish
his already tainted reputation and leave him un-
electable. At worst, he faces a long prison term.
Olmert had hoped to make a dramatic return
to political life as soon as two other pending cor-
ruption cases against him were resolved: the Ris-
hon Tours affair, in which he is accused of dou-
ble-billing on fundraising trips overseas, and the
Talansky affair, in which he is alleged to have ac-
cepted cash from American Jewish businessman
Morris Talansky in exchange for granting favors.
For months Olmert had been insisting that the
charges inbothcases would disintegrate the way a
long list of allegations against him had in the past,
including improper conduct in his handling of a
privatization tender for Bank Leumi while he was
finance minister, and his buying and selling of
two luxury homes in Jerusalem .
The implication was that as soon as his name
was cleared, Olmert would make a triumphant
comeback to politics and possibly even challenge
Tzipi Livni for the leadership of the Kadima Party.
But the new scandal, in which Olmert, as
mayor of Jerusalem, is suspected of having taken
nearly $1 million in bribes for extending build-
ing permits to the Holyland construction project,
is likely to put to rest any lingering thoughts of
a comeback. Not only do the dimen sions of this
new corruption affair dwarf the others, but the
preponderance of allegations against Olmert re-
inforces a perceived pattern of criminal conduct
that Olmert would be hard-pressed to shake off in
the political arena.
The Holyland scandal also involves Olmert's
successor as Jerusalem mayor, Uri Lupolianski,
and a former top aide to Olmert, Uri Messer.
The extent of the alleged corruption raises
two central questions: Was the Holyland affair
an isolated case or, as seems more likely, part of
a system? And to what extent was the municipal
corruption in Jerusalem a reflection of a wider
phenomenon in municipalities and local coun-
cils across Israel?
The Holyland saga goes back to the mid-
1990s, when Hillel Charney, whose family owned
the original Holyland Hotel, received a permit to
build three new hotels on the 30-acre site. With
the Oslo process in full swing, Israel's 50th anni-
versary coming up and millennium celebrations
around the corner, Jerusalem was in dire need
of more hotel rooms. On paper, the initial blue-
print seemed reasonable.
To help shepherd through the project, Char-
ney brought in experienced real estate people
who apparently convinced him he could do much
better with a mega-sized housing development.
The plans were changed several times before the
current building complex was approved.
What started out as a plan to build about
300,000 square feet burgeoned to more than 3
million, translating into hundreds of millions
texas jewish post & since 1947
Photo: Kobi Gideon / FLASH90/JTA
The Holyland housing development in Jerusalem, widely dismissed as an eyesore, is at the center of a corruption
scandal allegedly involving former Prime Minister Ehud Olmert and ex-Mayor of Jerusalem Uri Lupolianski.
of dollars more in revenues for the owners and
It also resulted in a plan for 10 12-story build-
ings and two 30-story buildings. About half of
those already have been built on the Holyland
site, breaking the Jerusalem skyline with what
experts and Jerusalem residents long have de-
scribed as the city's worst architectural eyesore.
Before the first stones were laid, two questions
already were being asked: How did the developers
get such excessive building allowances, and how
was such an architectural monstrosity approved
at both the city and regional planning levels?
The anomalies were so blatant that the police
launched an investigation, but it was soon closed
for lack of evidence.
The evidence of major wrongdoing only came
to light several months ago when one of the real
estate experts, or "fixers," Charney brought in
went to the police with a notebook and other
documentation detailing a long list of bribes
Charney allegedly had made to city officials,
police and at least one member of the regional
Apparently in trouble with creditors and
claiming Charney hadn't paid him all he was
owed, the fixer offered to become a state witness
in return for immunity and the settlement of
some of his debts. Although the man with the
notebook has been named as Shmuel Dachner,
there is a gag order against naming him or any-
one else as the state witness. Police apparently
are looking for another suspect to turn state wit-
ness to bolster their case.
The case could boil down to a battle between
the two ex-mayors, both of whom maintain they
are innocent. Olmert claims he approved only the
hotels, and that the upgrade to extensive residen-
tial building rights was approved by his successor,
Lupolianski, who was mayor from 2003 to 2008.
Lupolianski claims it happened on Olmert's
watch, when Lupolianski was a deputy mayor.
Both accounts are problematic. The approval
for a residential building came in 2002, when Ol-
mert was still in charge. But the Charney family
also made huge donations to Yad Sarah, a well-
known charity for the sick and aged founded by
Lupolianski, and to a yeshiva run by Lupolian-
Police believe both mayors were deeply in-
volved. Lupolianski already has been arrested; Ol-
mert is expected to be questioned soon. The aide
Messer, who also was arrested, allegedly served as
the conduit for the cash bribes to Olmert.
The Holyland case points to a City Hall rid-
dled with corruption. Dozens of officials, from
low-level clerks to the top elected officials, in-
cluding the city engineer and two mayors, are
suspected of taki ng bribes.
Over the past fewyears, dozens of Israeli may-
ors have been prosecuted for similar offenses.
Under the Israeli system, all building projects
and rezoning of land must be approved by mu-
nicipal and district planning committees, and
are subject to a process of objections and res-
ervations from the general public. The process
is cumbersome and the laws complex, and ulti-
mately leave considerable power in the hands of
With land scarce and expensive, this appar-
ently has created strong incentives for bribery
by would-be developers who stand to make a
fortune if they can get mayoral backing for their
Prime Minister Benjamin Netanyahu is plan-
ning a major land reform that on its surface will
give the mayors even more power. Netanyahu
wants to cut the red tape by canceling the regional
committee stage, leaving decisions in the hands of
a small municipal body. He argues that this will
lead to far more building starts and reduce the
cost of housing. Critics say it could lead to even
more bribery and corruption because the regula-
tory process will be weakened.
The quandary Israel faces is how to reduce the
red tape without increasing corruption.
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Wisch, Rene. Texas Jewish Post (Fort Worth, Tex.), Vol. 64, No. 16, Ed. 1 Thursday, April 22, 2010, newspaper, April 22, 2010; Fort Worth, Texas. (texashistory.unt.edu/ark:/67531/metapth188289/m1/4/: accessed August 21, 2017), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; .