ISRAEL: Rocked already last month by a vote-buying scandal, the ruling centre-right Likud party has again been hit by corruption allegations, this time regarding the alleged involvement of Prime Minister Ariel Sharon and his two sons in a loan affair that could have far-reaching political ramifications, with less than three weeks to go to the January 28 general election in Israel.
An opinion poll, to be published this morning in the liberal Haaretz daily, which exposed the allegations against Mr Sharon two days ago, shows the Likud plummeting to 27 seats (in the 120-seat parliament), from 41 seats in the polls less than a month ago. The opposition centre-left Labor Party gets 24 seats in the poll.
The investigative article in the Haaretz newspaper on Tuesday revealed that the State Attorney's office in Israel had asked the South African Justice Ministry for assistance in ascertaining how Mr Sharon had received close to $1.5 million from a British-born businessman now resident in South Africa, Mr Cyril Kern, who made his money in the fashion trade.
According to the Israeli justice authorities' written request, the money was to serve as collateral for a loan that Mr Sharon's sons, Omri and Gilad, had taken out to pay back a company from which the prime minister received illegal campaign contributions during his ultimately successful bid for the leadership of the Likud in 1999.
The letter to the South African authorities implies that Mr Sharon and his son Gilad deceived the police and the State Comptroller when they were quizzed on how the prime minister planned to repay the money, as he had been ordered to do so by the Comptroller, and raises suspicions of bribery, fraud and breach of trust. According to the letter, the money was transferred from Mr Kern's account in an Austrian bank, to JP Morgan Bank in New York, then to a bank in Tel Aviv and finally onto the Sharon sons' account in a bank in southern Israel.
Mr Sharon's aides insisted the loan was lawful and was repaid with interest, and have attacked the media over the revelations. "It is not by chance that there are leaks, lies and disinformation designed to bring down the prime minister and his government," charged Mr Eyal Arad, a political adviser to the prime minister.
Mr Sharon related to the affair for the first time yesterday, dismissing it as a "despicable political plot" which he said he would "disprove with documents and facts." But he has yet to do so, and there is growing pressure on him to give a full public accounting.
Mr Kern, who described himself as a close personal friend of Mr Sharon, with whom he had fought in the 1948 war which accompanied Israel's emergence as a state, confirmed he had loaned the money to the Sharons, but insisted that it was "on a strictly business basis." Mr Sharon and his sons will not be questioned on the affair until after the elections, due to a decision by Attorney General, Mr Elyakim Rubinstein, to put all investigations relating to political figures on hold until after the vote.
The latest affair comes on the back of another scandal in the Likud, which stems from allegations of vote-buying and underworld involvement in the primaries to elect the party's list for parliament, and which had already cost the party some 20 per cent support in opinion surveys. Trailing in the polls for weeks, rejuvenated Labor leaders seized on the latest scandal, demanding that Mr Sharon either give a full public accounting of the circumstances of the loan, or resign. Party leader, Mr Amram Mitzna, referred to the prime minister in a campaign commercial as "the Godfather."