Olmert Tied to New York Developer in Scandal

A Long Island philanthropist and fundraiser for Israel is at the center of an enveloping scandal around Israel's prime minister, Ehud Olmert, that has riveted and agitated Israel despite a veil of secrecy over the ongoing investigation.

The man, Morris Talansky, 75, was apparently approached by the Israeli authorities when he arrived at the Tel Aviv airport expecting to spend Passover with his daughter and son, who live in Jerusalem. It is unclear if Mr. Talansky is only a witness or also a suspect in the case.

Israeli prosecutors asked a Jerusalem court on Tuesday for permission to take testimony from a foreign man, widely understood to be Mr. Talansky, even though prosecutors have yet to file any charges in the case. That probe appears to involve suspicion of bribery or campaign finance irregularities involving Mr. Olmert that took place in 1999. At that time, Mr. Olmert served as mayor of Jerusalem and was running against former Prime Minister Ariel Sharon for the leadership of the Likud party.

Police have imposed a strict gag order that forbids publication of information about the case in Israel. Mr. Talansky's name and nationality have not been made public, but details of the investigation have circuclated among politicians and journalists there in recent days. The New York Post published his name on Tuesday, leading Israeli radio announcers to tell listeners to go to the newspaper's web site without saying why.

Mr. Olmert has told his cabinet and associates that rumors that he took bribes and may be facing a legal morass that could topple him will prove baseless once the investigation is completed. But the speculation about his future has weakened him politically even as he undertakes delicate negotiations with Israel's neighbors under pressure from the Bush administration. Opposition politicians say he should not negotiate with the Palestinians or send messages to the Syrians under such circumstances.

Secretary of State Condoleezza Rice just returned from Jerusalem and President Bush is due there next week as part of a concerted American push to close an Israeli-Palestinian peace framework by the end of Mr. Bush's tenure.

The fundraising in 1999 that prompted the investigation into Mr. Olmert also led to campaign finance charges against people close to Mr. Sharon. His son, Omri Sharon, is serving a prison term as a result of that case.

Mr. Talansky, an Orthodox Jew who briefly led a congregation in Portland, Ore. in the 1950's as a young rabbinical graduate of Yeshiva University, turned to business and philanthropy in his later career, when he lived mainly in the New York suburbs.

His first marriage to Miriam Kriger ended after forty years, and two of their three children moved to Israel. He and his current wife Helene live in the Woodsburgh section of Woodmere, in a nine-room, red-brick Colonial that he paid $1.175 million for in 2004. He also lists that as his business address, and lists himself as the chief executive, of Global Resources, an investment firm.

A man answering the Mr. Talansky's phone on Monday said, ''They're not going to return your call,'' and hung up the phone. No one responded to a knock on his front door on Tuesday.

Within Jewish circles, Mr. Talansky is best known for the years he spent as a fundraiser for the American Committee for Shaare Zedek Hospital in Jerusalem. A popular cause with American Jewry, the hospital's American fundraising arm took in $20 million in gifts in 2002, its best year, according to tax returns. Paul Glasser, the national director for the American organization, said Mr. Talansky had not worked for the charity since 1997. But the organization reported on its 2004 tax return that Mr. Talansky earned $90,000 that year as a consultant, a year that the organization pulled in $16 million from outside sources.

Tax records also show Mr. Talansky also served as the main contact and treasurer for the American branch of the New Jerusalem Foundation, a charity closely associated with Mr. Olmert that raises money for the city of Jerusalem. The American branch got its tax exemption in the United States in 1999, when Mr. Olmert was mayor of Jerusalem.

According to the charity's recent tax returns, it raised as much as $376,000 in contributions, gifts and grants in 2000, falling to $76,000 in 2005.

Describing its mission as providing ''social, educational and recreational activities in Israel,'' the charity said has given thousands of dollars to buy school supplies and run camps for needy children in Israel as well as arranged recreational trips for residents of northern Israel who had been closeted in bomb shelters during recent hostilities. The 2003 tax return also lists a $51,200 gift that went toward ''anti-terrorist campaigns.''

A woman named Helene Moshel, the maiden name of Mr. Talansky's wife, is listed as the charity's secretary on the 2006 return.

A registered Democrat, Mr. Talansky has been an active donor to many American candidates over the years on both sides of the aisle. He gave President Bush $1,000 in 2003, and had been a generous donor to Rudolph Giuliani in 2000, both Republicans. Among his Democratic beneficiaries have been President Bill Clinton in 1995, Thomas Foley in 1994 and Ted Kennedy in 1992.

Several relatives of Mr. Talansky in the United States who were reached on Monday and Tuesday by phone said they knew nothing about his predicament and were first hearing about it in the press. ''He's a very smart man, and a very generous man,'' said Dr. Alan Talansky, a nephew in Great Neck.

Relatives said he used his means and connections to support many charitable organizations in the Jewish world. ''He's not poor man, that I know,'' said Rabbi Abraham Talansky, a cousin in Brooklyn. ''He's a man who could give $10,000, like nothing.''

The rabbi said he would be surprised to learn that his cousin was in any way a right-wing extremist eager to topple the centrist Israeli prime minister, one theory circulating in Israel. ''He's no extremist in any way,'' said Rabbi Talansky.

One example of Mr. Talansky's involvement in political and business affairs in Israel is a lawsuit he and other investors filed last year in federal court in New York against an Israeli satellite company that they had helped back. The suit asks for relief on the grounds that an Israeli-run defense manufacturer involved in the joint venture was putting diplomatic considerations ahead of business interests in its overseas marketing efforts.

Mr. Talansky and the other plaintiffs, a group that includes one member of the prominent Reichmann family of Canada, claimed that the satellite company was being barred from offering access to its satellite images to countries like Venezuela that might be viewed as hostile to Israeli national interests.

In an affidavit Mr. Talansky filed in court this January, he complained that he had personally sunk at least $500,000 into the joint venture back in 1998 and had helped raise ''$5 million to $6 million more'' from other individuals, not counting a $250,000 bridge loan he also made that year. Without the court's help, he noted he would have ''no viable remedy for defendants' intentional unwinding and destruction of the company into which I was induced to indirectly invest.''