Prime Minister Ehud Olmert is suspected of accepting hundreds of thousands of dollars from an American citizen, Moshe Talansky, various media outlets reported Thursday. Channel 10 reported that Talansky was a middleman for illegal campaign contributions, and that he readily told Israeli interrogators everything he knew about the case. The details were made known after Tel Aviv’s District Court eased a a gag-order it imposed on details of the new investigation of Prime Minister Ehud Olmert which began last week. Prime Minister Ehud Olmert acknowledged on Thursday that US citizen Moshe Talansky helped him raise money in several election campaigns. In a press conference minutes after Tel Aviv’s District Court decided to ease the gag-order previously placed on the case, Olmert said there was nothing illegal about the campaign contributions he received. “I look into the eyes of each and every one of you,” he said, referring to Israeli citizens, “and say that I have never accepted bribery. I never took an agora to my pocket.” Olmert added that if he is indicted, he will resign.Source: Jerusalem PostHaaretz Analysis

ANALYSIS / The PM seems crushed in face of allegations

By Yossi Verter

“It’s all an election finance matter,” Olmert wrote to the government ministers in a lengthy series of notes he sent them at the cabinet meeting earlier this week.

“The drama is because of the gag order and the urgent questioning. The headlines will disappoint in a couple of days.”

One note after another Olmert wrote, urgently, as if his life depended on these pieces of paper. One of the ministers who knows his handwriting well, from dozens of previous notes, looked them over and was astonished. The prime minister’s stylized and rounded handwriting had changed in a single day into the sad handwriting of a battered, haunted man.

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“It wasn’t the same determined Olmert, who runs meetings with a firm hand, shouts, bangs on the table,” another minister said. “He spoke with difficulty, kept swallowing, appeared completely crushed.”

After that meeting, reminiscent of sitting shiva, Olmert met privately with Defense Minister Ehud Barak, a custom they have kept to assiduously every Sunday since Barak joined the cabinet. Olmert presented his version in full to Barak.

Barak is Olmert’s lifeline, at least in the immediate future. He might also be his undertaker. So long as Barak remains in the government, Olmert remains prime minister.

Following that conversation, Barak told his associates that Olmert has a 50-50 chance of survival, much better odds than the media gives him. On the one hand, sources in Barak’s circle say, apparently this time the matter is serious, documented, backed up by incriminating testimony from confidants. On the other hand, we’ve seen previous investigations open to great fanfare and end in nothing, or nearly nothing. And we are also familiar with Olmert’s amazing survival skills, which, in cat math, still leave him two lives – at least.

In any event, a Barak associate said this week, we in the Labor Party will not rush to stick the knife in Olmert. Barak is not in a hurry to go anywhere. As far as he’s concerned, resignation from the government is the result of an indictment. So long as there is no indictment, or even a recommendation to indict, there is no need even to think about resigning. And once there is an indictment, it will be necessary to think long and hard about what to do.

In the coming week, until President George Bush departs, nothing will happen. What will happen afterward? Hard to tell. Clearly if an indictment is filed, Olmert will pack his bags. Politics will be in an awful uproar. There may be attempts to form a substitute government in this Knesset. Barak will play a key role in any political development, as will Shas Chair Eli Yishai.

Here the assessments in Barak’s circle are split. Some think Barak would agree to continue as defense minister in a substitute government, say one headed by Tzipi Livni, should she indeed take the Kadima reins after Olmert resigns.

“Where exactly will Barak go and what’s waiting for him in elections? Netanyahu? Did he leave everything and return to politics to be Bibi’s defense minister?” one source commented, referring to opposition leader Benajamin Netanyahu. Others believe Barak would prefer elections. “We must not let Livni get comfortable in the prime minister’s seat. That would be political suicide. Better to go to elections with Labor led by Barak and Kadima led by Livni. It’s the center-left bloc’s only chance of getting enough Knesset seats to form a government in the next Knesset.”

Experience shows that when close associates express opposite opinions, that means that the man himself, Barak, has yet to make up his mind. Or he has decided and is deliberately spreading contradictory messages and obfuscation, because that’s the way he likes it.

At small internal meetings of Labor’s leadership, somebody had this suggestion: “We’ll let Livni serve as premier for a year. We all know she’ll buckle under the pressure, that she lacks skills, that she doesn’t have supportive backing of the experienced and weighty sort. In the end we’ll wind up benefiting. Who will vote for Kadima after such a term in office?” And somebody else replied: “It’s too risky a gamble. You don’t let CSKA take to the court, win in the first three quarters and hope it falls apart in the final quarter.”

Olmert, for his part, if forced to resign in the wake of an indictment against him, will do everything in his power – and he still has a few political moves left in him – to prevent Livni from taking over. If he manages somehow to survive this affair as well, he will shed Livni at the first opportunity.

Meanwhile, people who had business this week at the Prime Minister’s Bureau said they felt like they had wandered into a disaster zone: doom and gloom, bowed heads, weeping secretaries incapable of focusing on their work, a feeling that it will all be over any moment now. A bad scene, one visitor to the office said.