New Yorker Paid for Israeli PM's Drycleaning

JERUSALEM, May 27, 2008 — -- The star witness in the fraud and bribery investigation that has rocked Israeli Prime Minister Ehud Olmert told a court today that he gave Olmert envelopes stuffed with cash and was asked to pay for everything from expensive cigars to an Italian vacation.

Not all of the money was a gift, New York businessman Morris Talansky told the court.

Some of the cash "donations" handed over to Olmert were loans, which he expected to be repaid. "Famous last words," Talansky jokingly told the court when he explained that the money was never seen again.

In a pre-trial deposition, Talansky, 75, described giving envelopes stuffed with money to Olmert and his bureau chief Shula Zaken over a 15-year period.

On several occasions, according to Talansky, he met Olmert in hotels in New York and Washington to give him the bulging envelopes.

He said that on one occasion he paid $4,700 for Olmert's three-day stay at the Ritz-Carlton Hotel in Washington, a bill which included dry cleaning and video rentals.

"I had a very close relationship with him, but I wish to add at this time that the relationship of 15 years was purely of admiration. I never expected anything personally. I never had any personal benefits from this relationship whatsoever," Talansky claimed.

His evidence is bound to fuel further speculation about Olmert's survival in the prime minister's office. Olmert denies accusations of wrongdoing and has said that all donations were used for legitimate political campaigning.

But the details revealed in court Tuesday will damage a prime minister who is already deeply unpopular with the electorate.

Olmert has promised to resign if he is indicted by the police and state prosecutors.

Talansky told the court that his relationship with Olmert began in the early 1990s, when Olmert was running for mayor of Jerusalem. "I looked at him as a man who could accomplish a great deal," Talansky said.

He also appreciated Olmert's "ability to articulate and to reach out to the American people … that's why I supported him. That's why I gave it [money] to him. That's why I supported the man, that's why I frankly overlooked and, honestly, a lot of things. I overlooked them. Maybe I shouldn't have, but I overlooked them."

Talansky claimed he was then asked to make contributions in cash for election expenses and this continued when Olmert tried to take over the leadership of the right-wing Likud Party in 2003. For this campaign Talansky admitted giving Olmert $72,500. Talansky estimated that in total his cash donations to Olmert amounted to $150,000.

He said that some of the money went towards personal expenses, which included expensive cigars and other luxuries.

"I only know he loved expensive cigars. I know he loved pens and watches. I found it strange," he added.

Among the loans that were never repaid was $25,000 he gave Olmert for a family vacation in Italy as recently as 2004. Talansky claimed that none of the money had been repaid.

When a prosecution lawyer suggested that Talansky might have to appear in court again on Wednesday he broke down in tears, claiming he had to return to the United States because his wife was ill.

He will almost certainly have to return to Israel for further cross-examination, most probably in July.

Olmert has already been questioned twice by police investigating the case.

His personal popularity ratings have been hit hard by the latest allegations. Many of his political opponents have called for his resignation.

Even members of his own Kadima Party are thought to be preparing for his demise, with renewed speculation about who would take over if he goes.

Israeli State Prosecutor Moshe Ldor told reporters inside the courtroom that it was too early to say whether the investigation would result in the prime minister being indicted.