Loan casts another shadow over Sharon

jerusalem | With the closing of the Greek Island bribery scandal and Israeli Attorney General Menachem Mazuz’s decision not to indict Ariel Sharon, the prime minister still has one more hurdle to clear.

Sharon is currently being investigated by police for allegedly receiving another bribe from businessmen with interests in Israel, in what is called the Cyril Kern loan affair.

Following his victory in the 1999 Likud Party leadership primaries, Sharon went into debt to repay more than a million dollars in illegal campaign contributions.

The prime minister’s son, Gilad, received a $1.5 million loan, originating in Austria, from South African businessman Cyril Kern in order to repay a loan the family had taken out in order to repay the donations.

Recently, police have revealed the possibility that Kern served as a front man for Martin Schlaff, a known friend of Sharon’s and an Austrian-Jewish businessman heavily invested in Israel, and that he was the man who stood behind the “loan” in order to receive favors from the prime minister in the form of reopening the casino he owns in Jericho.

Police investigators charge that Schlaff was closely connected to straw companies established by Gilad and that there are serious suspicions that the Sharons received perks from the Austrian businessman.

“According to what we have seen, Martin Schlaff is linked directly or indirectly to the control or ownership of Gilad Sharon’s companies,” one Fraud Squad officer said.

A hearing on whether Gilad has fulfilled a court order to provide police with documents related to the affair is currently under way in the Tel Aviv Magistrates Court. A decision whether he is in contempt of court is expected to be handed down soon.

Officials in the prosecution have already made it clear that the decision not to indict Sharon in the Greek Island affair does not indicate that the loan affair case will similarly be closed. “They are two independent cases and are in no way connected,” one official said, adding that the prosecution expects the police to finish their investigation in the next few months.

On Monday, June 14, Israeli Cabinet member Dov Weisglass returned from Austria after attending Schlaff’s granddaughter’s bat mitzvah celebration. While in Austria, Weisglass met with Palestinian moneyman Mohammed Rashid, also one of the founders of the Jericho casino. No one denies the relationship between Weisglass and Schlaff.

Sharon’s closest advisor was also the Austrian businessman’s lawyer in Israel.

But the timing of Weisglass’ visit to Austria and the allegations raised by police regarding Schlaff’s role in the Kern affair do cast a suspicious light on the trip, as does the fact that the closest man to the prime minister rubs shoulders with a man suspected of bribing his boss.