Likud accuses Rubinstein of leaking lies to hurt Sharon (UPDATE)

Jerusalem Post ^ | Jan. 8, 2003 | Gill Hoffman

[Nachum]

The Likud accused Attorney-General Elyakim Rubinstei on Tuesday of permitting illegal leaks damaging Prime Minister Ariel Sharon to emerge from his office, in an effort to impact the January 28 election.

The charges surround a Ha'aretz report on Monday about a $1.5 million money transfer a made a year ago by South African businessman Cyril Kern to Sharon's sons Gilad and Omri.

Citing a Justice Ministry document, the report said the Sharons are suspected of receiving bribes, committing breach of trust, fraud, and deceiving the police and the state comptroller.

Likud campaign manager Leor Horev said Rubinstein's office appealed to the South African Justice Ministry to help its investigation, when it could have received a good explanation for the loan by turning to Gilad Sharon.

Horev called upon Rubinstein to investigate who leaked the document.

"If the attorney-general cannot defend the rule of law, he has a serious problem," Horev said.

"Despite the attorney-general's decision to freeze political investigations [unrelated to the current election], all the leaks about the Likud have come from his office, while the Labor investigations have been silenced."

In a news conference, Sharon adviser Eyal Arad denied wrongdoing by Sharon and warned against "an organized attempt to topple the prime minister and change the regime in Israel by means of a campaign of leaks, lies and disinformation."

Likud officials said Kern has been friends with Sharon since 1948, when they fought together in the War of Independence. They said the loan was repaid last year with taxes and interest, and cannot have been a loan, because Kern has no business interests in Israel.

"Has anyone ever heard of anyone paying interest on a bribe?" Arad said.

In a telephone interview from Cape Town, Kern said he was not involved in Israeli politics and does not wis to be. Kern is likely to be investigated by South African authorities.

The case dates back to October 2001, when the state comptroller found Omri Sharon had raised money outside Israel for a previous political campaign of his father's through a company called Annex Research.

Although there was no suspicion of criminal wrongdoing, the comptroller asked Ariel Sharon to reimburse the company 4.7 million shekels it paid to his campaign advisers.

Sharon repaid NIS 500,000 shortly thereafter, and Omri and Gilad secured a bank loan for the difference, using Sharon's Negev ranch as collateral.

But the bank called off the loan after learning Sharon did not own but leased the ranch land from the state, the report said.

In January 2002, three months after the state comptroller's report, Kern transferred US $1.5 million to Gilad and Omri Sharon, and the money served as collateral for a loan the Sharon family obtained from a different Israeli bank to repay Annex.

The Ha'aretz report accused Sharon of lying to police when he told them he repaid Annex by mortgaging the ranch, when he received the money from Kern instead.

The paper alleged that such a mortgage was not possible, because the ranch is on state-owned land.

The Likud presented documents in the press conference to deny all the charges in the report.

Arad said Sharon did in fact mortgage the ranch in 1989, and mortgaged it a second time to repay Annex. Horev said the Kern loan was intended to cover Gilad's business expenses at a time when his finances were going to repaying Annex.

Justice Minister Meir Sheetrit said the leaking of the document was very grave and said the timing of the report was suspicious. Rubinstein said it is unfortunate that so many allegations keep on arising during the race for the Knesset.

Labor Party Chairman Amram Mitzna called upon Sharon to publicly answer the charges in the Ha'aretz report or resign.

"Sharon's behavior makes him illegitimate and unfit to head the country at this time of crisis," Mitzna said.

Labor Secretary-General Ophir Pines-Paz filed a formal complaint against Sharon with the police.

Ha'aretz said it stands by its report and denied the Likud's charges that it was part of a conspiracy to harm Sharon.

News agencies contributed to this report

[Phil V.]

TIME LINE

Sycamore Ranch . . . FAMILY OWNED OR LEASED FROM THE GOVERNMENT? I've seen both versions. If it is leased property then Sharon is either dumber than a rock or Toni Soprano's mentor.