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Last Updated: Tuesday, 9 October 2007, 18:24 GMT 19:24 UK
Fraud police question Israeli PM
Israeli Prime Minister Ehud Olmert
Ehud Olmert insists he has done nothing wrong
Israel's Prime Minister, Ehud Olmert, has been questioned by police over his role in a bank privatisation deal.

He is suspected of trying to influence the sale of the state's controlling interest in Bank Leumi in favour of a friend whilst finance minister in 2005.

Mr Olmert has denied any wrongdoing. He has faced other corruption inquiries, but no formal charges have been filed.

Last month, the attorney-general opened a criminal investigation into his purchase of a property in Jerusalem.

The move came after a government watchdog concluded Mr Olmert paid $325,000 (162,500) below market value for the house to a developer.

Other politicians have also been blighted by serious allegations. Earlier this year, Israel's former President, Moshe Katsav, struck a plea bargain with the attorney-general to avoid rape charges.

Fraud unit

He was questioned for five hours at his official residence in Jerusalem by three National Fraud Unit investigators, police say.

OLMERT TIMELINE
1945: Born in Binyamina
1973: Elected to the Knesset
1993-2003: Jerusalem mayor
2003-2006: Ministerial posts
April 2006: Prime minister

Mr Olmert will be questioned again on Thursday, they added.

No details of the interview have been released.

The investigators were expected to ask the prime minister about possible conflict of interest, how his friend, Australian businessman Frank Lowy, was convinced to enter the bidding for Bank Leumi, and whether any of the changes Mr Olmert introduced in the tender were at Mr Lowy's behest.

The prime minister has said he persuaded officials to make several changes to the tender to encourage strategic investors to bid for the bank.

At the end of the investigation, the police will present their recommendation to the State Prosecutor's Office.

Observers say it may be difficult to prove any wrongdoing because Mr Lowy ultimately withdrew his bid and there seems to be no evidence of Mr Olmert having received anything in return.

However, the prime minister could face charges of breach of trust if it is proven he took an active role in the sale despite an apparent conflict of interest.

Mr Olmert is the last person to be questioned in the case. Israeli police questioned Mr Lowy in Australia in May.



SEE ALSO
Ehud Olmert: Corruption allegations
12 Oct 07 |  Middle East
Israel faces corruption 'epidemic'
24 Sep 07 |  Middle East
Israeli PM faces corruption probe
24 Sep 07 |  Middle East
Profile: Ehud Olmert
24 Sep 07 |  Middle East
Israel president sex case delayed
01 Jul 07 |  Middle East
Olmert faces bribery allegations
25 Oct 06 |  Middle East
Israeli bank investigation widens
07 Mar 05 |  Business

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