Israeli police arrest another senior tax official in corruption investigation

Israeli police have arrested the U.S. representative of the Israel Tax Authority as part of a bribery and influence-peddling probe that has so far questioned the authority's top officials and an aide to Prime Minister Ehud Olmert, police said Tuesday.

Photo: Israeli police arrest another senior tax official in corruption investigation

The representative, Yigal Saar, was arrested Monday evening when he flew into Israel from the United States. said police spokesman Micky Rosenfeld.

Police investigating allegations of endemic graft in the tax authority have so far questioned at least 15 people, among them the director of the authority, Jacky Matza, and Olmert's longtime personal assistant, Shula Zaken.

They say Olmert, who has been dogged by corruption allegations throughout his career, is not connected to the case.

Authorities are investigating whether senior officials in the Tax Authority granted tax breaks to businessmen in exchange for bribes. Zaken is suspected of arranging job placements in the authority in return for tax breaks for her brother. Zaken and Matza are currently under house arrest.

Israel Radio reported that Saar had been appointed to the U.S. position several months ago by Matza. Police suspect the appointment was made under pressure from businessmen, including Zaken's brother, the report said.

The affair is the latest in a series of scandals to rock the highest levels of the Israeli establishment.

On Monday, police said they would investigate Finance Minister Avraham Hirchson, a close Olmert ally, over his suspected involvement in a multimillion dollar embezzlement scam in 2003 when he headed a workers' union.

Olmert has been accused of corruption throughout his long political career, but has never been convicted. Most recently, the state comptroller, a government watchdog, recommended a criminal investigation into official appointments made by Olmert when he was trade and industry minister. The comptroller's office also has been looking into several real estate deals he made in Jerusalem and Tel Aviv. Olmert has denied any wrongdoing.

Lawmaker Tzachi Hanegbi, another Olmert ally, has been charged with fraud, bribery and perjury in connection with appointments he made as a Cabinet minister, reports AP.

Another Olmert ally, Haim Ramon, was forced to step down as justice minister and is now standing trial after a soldier accused him of forcibly kissing her.

President Moshe Katsav has been accused by former female employees of rape and other improprieties. No decision has yet been made on whether Katsav will stand trial.